PayThink

Housing advocate Bruce Marks is no stranger to aggressive protests. He knows the perils of releasing rats in hotels, and he´s sent volunteers for his organization, the Neighborhood Assistance Corporation of America, to the schoolyards of bank executives´ children to confront them. This weekend, he and about 500 NACA volunteers are gearing up to get personal again with something called the Predators´ Tour.

The Treasury Department´s new pay cap for banks using Tarp has gotten plenty of attention on the news, despite its fundamental lack of teeth. Even if it doesn´t work, big-name executives on camera have looked worried over the prospect of lower pay. But Columbia University business professor Amar Bhide isn´t impressed. Chatting with BankThink this today, Prof. Bhide says previous caps didn´t work, and this one appears no better. A real plan, he says, would actually address the perverse relationship between government and Wall Street, where executives can no longer expect the taxpayer to make up for their failings.

What is consumers' No. 1 source of information about where to bank? It's not marketing, advertising or brochures: it's word of mouth.

Here's a simple solution: NCUA should set aside the "defined reserve standard" of PCA in recognizing the economy we are all working within. NCUA should also recognize that any capital held by a credit union is critical in dealing with mounting loan, investment, NCUSIF and potential corporate paid in capital losses. The federal government is digging deep into the pockets and futures of taxpayers while trying to uphold capital standards that have become instantly archaic given the current economic environment.

Regarding GTE FCU CEO Bucky Sebastian's proposals for expanded powers for credit unions, which he called a "credit union on steroids" (cujournal.com, Jan. 27): this is a mutual savings bank. The law already permits such a move. Why not acknowledge it and support the directors of a credit union proposing a conversion, and move to the FDIC, rather than interfere in the decision-making as he, the NCUA, and some of the credit union trade associations have in the past?

This "bailout" of the corporate system seems unconscionable and appears to weaken the entire credit union system at a time when the industry cannot absorb the hit. The corporates may survive, but how will credit unions fare? With the GAC just weeks away, could we not have alternatively lobbied 'til we dropped to secure a small slice of the Fed's next bailout distribution rather than feed amongst ourselves?

I enjoyed reading Frank Diekmann's column in the Jan. 12 issue; the prose is almost poetic.

While the NCUA is definitely a "government agency," I believe it would be in the best interest of the credit union movement that Credit Union Journal refrain from using the words "government rescue" and "bailout" in the same sentence. In fact, I believe an article explaining that this bailout is not coming from taxpayer dollars would be in order.

I just got Credit Union Journal's tribute issue to the 100th anniversary of credit unions (Jan. 12), and I loved Frank Diekmann's views and opinion column - not not quite as stirring as Obama's speech - but hey it came close!

The reality is that fraud happens. On average, credit card issuers experience approximately six basis points of loss every year ($600 per $1 million in charge volume), which is low compared to the 18 basis-point peak in the early 1990s. The annual cost to U.S. issuers is estimated to be $1 billion.