Compliance Blog

Posted by Anthony Demangone

NCUA has released its Material Loss Review on WesCorp.   Here's a NAFCU Today article with our reaction. If you don't have a lot of time, just skim the executive summary. The report points to weak risk-management, as well as  problems in NCUA's supervision of the corporate. 

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Here are some other items of note.

• Treasury has announced two key hires for the CFPB.

Peggy Twohig.  Peggy Twohig currently serves as Treasury's Director of the Office of Consumer Protection and Policy Lead for the CFPB implementation team.  Prior to joining Treasury, Twohig worked at the Federal Trade Commission on enforcement and policy issues related to consumer financial services, including directing the activities of the Division of Financial Practices.  Before her work at the FTC, Twohig practiced law with the firm of Arnold & Porter in Washington D.C., handling civil litigation matters.  In her new role, Twohig will spearhead efforts to conduct research and policy analysis around the creation of the first federal non-depository supervision program.  

Steve Antonakes.  Steve Antonakes served as the Commissioner of Banks for the Commonwealth of Massachusetts for the past seven years and oversaw nearly 240 state-chartered banks and credit unions and more than 4,500 non-bank financial entities. Antonakes also served as a voting member of the Federal Financial Institutions Examination Council (FFIEC) and as the Vice Chairman of the Conference of State Bank Supervisors (CSBS). He began his career as an entry level Community Reinvestment Act Bank Examiner in June 1990 and worked his way through the management ranks to become the Commissioner of Banks – only the second career bank examiner to serve in that position.  In his new role, Antonakes will build the consumer supervision program for the nation's largest depository institutions.  

• The Acting Director of the OTS recently spoke in Japan on various issues regarding the U.S. financial system, including Dodd-Frank.  His remarks were less than "warm and fuzzy." Here are a few interesting excerpts.

Of course, the OTS was not the only federal banking regulator to supervise financial institutions that failed during the crisis. Since the IndyMac failure, about 300 U.S. financial institutions have failed, including state-chartered banks and national banks. And institutions much larger than Washington Mutual — for example, Citigroup and Bank of America — collapsed. However, the federal government deemed these larger institutions too big to fail and provided open bank assistance to prevent their failures. As I have said in the past, the OTS did not regulate the largest banks that failed; the OTS regulated the largest banks that were allowed to fail...

I think it is instructive to view those words in light of the new U.S. financial services framework mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act, which President Obama signed into law on July 21 of this year. Have we succeeded in designing a regulatory structure for the 21st Century, or have we ended up with a system that is politically feasible, rather than truly optimal? My conclusion is that, like any result of compromise, the new structure is not necessarily the ideal structure, it is merely the structure that was able to muster enough votes to pass through the legislative process.

• NCUA has released its most recent issue of The NCUA Report. This report focuses on corporate credit unions, recent NCUA actions, and concentration risk.