Challenging Some Time-Worn Assumptions

Some notes for readers with ADD, who don't need any particular semblance of order:

Data released recently and featured in this issue of Credit Union Journal uncovered a couple of things one would not have imagined all that long ago. The first is that the highest deposit rates in the country can be found in Louisiana. The second is what now officially constitutes "high:" 0.51%. Fifty-one whole basis points. Let's all move to Louisiana and start planning a retirement on interest income.

The research from Market Rates Insight found the national average on deposits to be 0.35%. Not really much of a reason to go out and do some deposit rate shopping, is it? The only good news is that if you're in Ohio, which MRI said during 2012 offered the lowest average deposit rates at 0.24%, being in last place is hardly even noticeable.

Joining Louisiana in paying above-market rates during 2012 were Texas, Iowa, Nebraska and Virginia. Joining the Buckeyes at the bottom were neighbors West Virginia, Indiana and Michigan, along with New Hampshire. Overall, rates declined the most during 2012 in Kentucky.

Yet any argument over those rock-bottom basis points is a lot like people who argue over the weather when its -10 degrees in one place and -12 in another. Seriously, does it really matter?


ONES Can Be The Lonliest Number

I shared in a recent column some remarks made by NCUA Chairman Debbie Matz at the Volunteer Leadership Institute meeting on the Big Island that had to do with Matz's view of why the CU tax exemption is so important. But it wasn't the only issue Matz addressed. The chairman also shared that when the agency created a new office with a focus solely on credit unions of more than $10 billion in assets known as the Office of National Examination and Supervision (ONES), its examiners did not exactly embrace the plan to reduce examiner time in smaller, less-sophisticated credit unions, in favor of more time in larger, more complex CUs. The program, she said, got "a lot of pushback."

"The NCUA examiners who examine small credit unions really support credit unions," said Matz. "One examiner said 'I'm not going to be able to do my job. I just left a CU where I spent 80 hours.'" And how big was that credit union? Five-hundred-thousand dollars in assets. That, of course, merited a follow-up question, which Matz said she promptly offered up. "I asked, 'What did you do there for 80 hours?'"

Matz said the examiner answered with a list of "nice things" such as clerical tasks, but "not the kinds of things an examiner should be doing."

"We have really had to wean our examiners off of this type of examination, and have started doing this last year," said Matz. "I do want to emphasize we are not kissing off the small credit unions. We have made a commitment at NCUA to the survival and thriving of small CUs. We feel they are important to the communities they serve and to the credit union industry."

Meanwhile, speaking to the issue of threats to credit unions, Matz said other risks that concern her are: