Why Iron Mike Is a Bad Idea for the NCUSIF

Sailors are well-acquainted with “Iron Mike.” The term is used to define the mechanical setting of a fixed course and speed for a vessel. It goes without saying that whatever happens once a ship is on Iron Mike, the vessel stays on the same course and speed absent human intervention.

One might say that the term Iron Mike could also be used to describe the NCUA’s setting of the normal operating level for the NCUSIF. The fund’s normal operating level has been at 1.3% of insured shares for as long as anyone can remember. Whether in good times or in bad, 1.3% has been the rule of the day. (The law permits the NCUA to set the operating level between 1.2% and 1.5%.)