The Watchdog Continues to Rob the Henhouse


If your credit union is federally insured, have you been paying attention to recent statements coming from NCUA Chairman Harper?

The February board meeting included a report on the 2023 year-end financials for the NCUSIF and a very healthy report it was. Total assets now exceed $21 B. The really good news was that there were only three credit union failures that resulted in losses to the fund of $1.4 M. That’s right, only $1.4 m in losses, even though we have been listening to the Chairman continuously warn of pending doom since he first came to the board 2019.

His predictions have been about as accurate as the losses the “experts” projected would result from the legacy assets held by the Corporate Central system 15 years ago. Through the 2008 recession and the economic turbulence of COVID, the fund has proven to be financially resilient and built on financial assumptions that provide a proven deposit insurance model over many years.

But not according to the Chairman. He has continuously predicted some imagined future doom that requires the additional infusion of our members’ capital and now he wants to eliminate the financial caps that constrain his wish to build a regulatory empire on the backs of credit union members.

Have you been paying attention? In his testimony to Congress, last November, Harper told Congress that he wanted to remove the 1.5% ceiling for the NCUSIF equity ratio while also eliminating the current restriction on charging a premium if the SIF equity ratio is greater than 1.3%.

Why, you ask? This is nothing more than an obvious money grab by the agency to support the continuous growth of the agency budget. There is not a single bit of evidence that any of his requests are supported by a need to increase the safety and soundness of the fund to benefit credit union owners. His only justification is that these changes would allow our fund to “fall in line with FDIC authority.”

Since when has that ever been an objective of our historically successful and unique model for deposit insurance?

When is enough, enough? What is a fair and equitable cost our members must bear for deposit insurance? This current desire to gain more access to credit union capital continues the chairman’s effort to gain regulatory control over state-chartered credit unions through the manipulation of its insurer authority and its indefensible execution of the totally opaque Overhead Transfer Rate.

What do we do? Will the new reincarnation of our national trade association take up this battle on your credit union members? Not unless you make sure your concerns are heard. If you are a state-chartered credit union in one of the ten states that allow a private deposit insurance option, make that evaluation to dump NCUSIF part of your strategic planning process.

Ask yourself if you think letting Washington bureaucrats manage $21 B of your members’ capital and then expanding their power and budgets by using the earnings off of that capital is fulfilling your fiduciary duties to your member/owners and all of those from generations before.

After all, who is watching the watchdog?


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