I think one person just may be on to something.
Last week, Credit Union Journal made a reporting error in an item on cujournal.com, initially stating that Missouri Corporate was merging with Treasure State Corporate CU. In fact, it was Kansas Corporate CU that announced plans to pursue a merger with Treasure State.
We were already in the process of moving to correct the item when I received an e-mail from Dennis DeGroodt, president of Missouri Corporate. In a gracious note, DeGroodt sought to alert us to the error. He also threw in a little addition, noting that, "Just because Missouri has a better football team than Kansas, it shouldn't sway your reporting."
And that got me to thinking: What if NCUA had used college football rankings to decide which corporates survived and which didn't. Would the CU community have been better off?
As has been well-documented, NCUA had examiners on site at several of the biggest corporate failures, so apparently that system wasn't exactly foolproof. What if it had saved the money and just used the college football polls to drive its decision-making?
U.S. Central in Overland Park, Kan., likely would have been shuttered early on. The Kansas Jayhawks were 2-1 at press time with a pair of wins over the early-season cupcakes that collect checks in the opening part of most Division I programs' seasons, but then got pounded 66-24 by Georgia Tech. The team went 3-9 in 2010 and 5-7 in 2009, the same year NCUA placed U.S. Central in conservatorship.
So it appears the agency could have simply saved what it had budgeted for the examiners, looked at the Jayhawks' record, and decided that was all the criteria it needed to pull the plug on the corporates' corporate.
Similarly, in California, the USC Trojans went 9-4 in 2009 and 8-5 in 2010, while rival UCLA Bruins went 7-6 and 4-8 over the same two seasons. But USC's picture is even darker, as it was placed into conservatorship, if you will, by the eerily similar acronymed NCAA for a scandal that took place under a previous coach who promptly skipped town for a larger paycheck in the NFL.
Again, NCUA could have just saved all the money and time of placing examiners in Wescorp's San Dimas, Calif., headquarters by following the NCAA's lead and taking over the corporate at the same time. Coincidentally, Wescorp's former CEO also walked with a multi-million-dollar exit package, leaving the mess for the coach, um . . . CEO who had to follow.
What about some of the other corporate failures? Members United FCU calls Illinois home. The Fighting Illini went 3-9 in 2009, improving to 7-6 in 2010. The former should have been reason enough for NCUA to make its move, the latter an early indication that Members United is likely to re-emerge recapitalized and with a new name, Alloya. No word on whether the University of Illinois is considering calling themselves the Fighting Alloyas in 2012.
And in Texas, where NCUA took over the once-proud, national brand Southwest Corporate in 2010, the once (and again) proud and national brand Longhorns suffered through a 5-7 record that same year. Coincidence?
Still, after that, "Frank's Official Theory of Division I Football Record As Indicators Of Conservatorship" gets a bit murkier-kind of like how college football chooses its national champion. Constitution Corporate is among those under NCUA's stewardship, but the UConn Huskies were 8-5 in both 2009 and 2010, and merited a major bowl game last year (where they got crushed, so maybe the theory holds up).
After all, the past two national champions (Auburn and Alabama) both hail from the same state as Corporate America, one of the strongest corporates to emerge from the recent mess. That mess, NCUA's own internal inspector general has said, is the result in part of missed red flags and other actions that should have been penalized.
So perhaps what the agency really needs is instant replay and review by officials.
Frank J. Diekmann can be reached at email@example.com.