Wednesday, June 5, 2013

Enforcement Orders in 2012

The National Credit Union Administration (NCUA) failed to disclose any information about enforcement orders in its Annual Report for 2012. This is the second year in a row, where the agency did not disclose this information.

Through a Freedom of Information Act request, I discovered that in 2012 NCUA issued:
  • 75 preliminary warning letters;
  • 205 unpublished letters of understanding and agreement;
  • 1 published letter of understanding and agreement; and
  • 5 cease and desist orders.
The following table compares the number of enforcement orders issued by NCUA for the years 2010 through 2012. What jumps out is the total lack of transparency with regard to enforcement orders. Between 2010 and 2012 NCUA issued 1,004 letters of understanding and agreement and only published 6 of those letters.

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8 comments:

  1. AnonymousJune 5, 2013 at 12:40 PM

    The NCUA is run by a committee of 2 - both political appointments. Do you really expect to see transparency? The NCUA determines what is good for the flock. When the NCUA is wrong the flock get to pay the assessments. Both trade associations NAFCU and CUNA take no stand and have no position on anything relevant. The tail is wagging the dog.

    ReplyDelete
  2. AnonymousJune 6, 2013 at 6:52 AM

    Do you think the NCUA puts itself at significant risk of being sued by a credit union that receives one the rare "published" enforcement actions? Also, remind me what rule or law the agency is using to decide that the member owners don't need to know abouut these actions again please.

    ReplyDelete
  3. Keith LeggettJune 6, 2013 at 9:36 AM

    Go to 1786(s)(1)(A) of the Federal Credit Union Act.

    (s) Public disclosure of agency action.—
    (1) In general.—The Board shall publish and make available to the public on a monthly basis—
    (A) any written agreement or other written statement for which a violation may be enforced by the Board, unless the Board, in its discretion, determines that publication would be contrary to the public interest.

    In my opinion, the Board has a very low threshold regarding what is "contrary to the public interest."

    ReplyDelete
    Replies
    1. AnonymousJune 6, 2013 at 8:55 PM

      Thanks. Seems to me it's not really in the best interest of the public not to disclose (but it may well be in the best interest of certain individuals at NCUA). Just like credit union boards, there's no accountability for the NCUA board either.

      Delete
  4. AnonymousJune 7, 2013 at 10:47 AM

    The topic may be wrong here. Cus are privately owned. Is the Private, not Public, disclosure the more important and accountable topic. The private disclosure from a CU's Board to its owners would mostly preserve credibility. Tell the member/owners in proper context, before a local competitor does in a self-serving one. Sadly, most of that would probably come from an overlapping cu that is also visited by this cus members (yes the other cu would know and tell its staff).

    This private owner context may be more real for the complex discussion of pro/cons of ethical disclosure by Boards to the owners. The owners mostly do not understand what ownership means, until one activist stirs up the press.

    ReplyDelete
  5. AnonymousJune 7, 2013 at 3:47 PM

    Yes. Good point.
    Credit union members are no more owners than "members" of American Express are owners. And, they don't see themselves as owners. They're customers.
    Period.

    ReplyDelete
  6. AnonymousJune 7, 2013 at 4:23 PM

    Members are not owners? I beg to differ...

    http://creditunionwatch.blogspot.com/2013/03/harborone-members-vote-to-become-mutual.html
    http://creditunionwatch.blogspot.com/2012/09/technology-cu-to-remain-credit-union.html
    http://creditunionwatch.blogspot.com/2011/10/har-co-members-vote-to-become-mutual.html

    Just because most members choose not to exercise their ownership rights, doesn't mean they don't have them.

    ReplyDelete
  7. AnonymousJune 7, 2013 at 7:13 PM

    Yes and when not interfered with they vote to leave the charter.
    Why stay?

    Tax exemption. Only reason.
    Tick tock.

    ReplyDelete

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