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'A Confederacy Of Dunces' Share The Blame In Mortgage Meltdown

Editor's Note: this letter is in response to "JP Morgan Says It Didn't Dupe Corporate CUs Into Buying Risky MBS," CU Journal Daily Briefing, Oct. 31.

Wow! NCUA getting scolded by the likes of JP Morgan in the tone of an adult to a child-and then, by their own "no comment" policy, not being able to respond. Now that's got to burn.

It's interesting, all the dirty details JPM exposed, not only about NCUA and the corporates, but management of natural person CUs. Greed, poor decision-making, lax documentation, and shamelessly looking the other way as mortgage processors (CUSOs?) offered up subprime like tenderloin dressed in ARMs du jour. It's no wonder our industry-presumably NCUA, but now we must wonder who else-determined early on to take the high road and cover our own losses.

But, if JPM's scolding assessment is correct, it seems a more public approach would have aired dirty CU laundry best left in the hamper, to be washed later by the Little Guy's Laundry Service.

What's really interesting here is some of the more reactionary behavior of NCUA in all of this. Almost like a moth drawn to flames, it seems to have been, from the start, an unwilling flyer of this high road and cover-up. Veering off and getting burned in fires of its own making, it has acted out one of my favorite comedies, "A Confederacy of Dunces." "When a true genius appears in the world, you may know him by this sign, that the dunces are in confederacy against him." -Jonathan Swift

The question, of course: Is the act "true genius"? And if it is, then indeed, the dunces were duped.

Michael Dillon
South Division CU, Evergreen Park, Ill.

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