Greetings from Beautiful Southern California!

My family has settled in to our new home in Murrieta, which combined with its sister city, Temecula, forms the Southwest corner of the Inland Empire. The IE is so large, it's classified as its own metropolitan statistical area. With a population of more than four million, it's the nation's 13th most populous MSA and the third-most populated MSA in California, just barely edged out by San Francisco-Oakland.

The economy appears to be in decent shape. Yes, there are still hundreds of foreclosed homes on the market, and admittedly, I haven't been to the fancy new mall yet. I can't say if those shops are bustling.

I did, however, have to wait in line at Lowe's to buy appliances, and sales have been so brisk they still haven't delivered our washer and dryer. That sounds like a significant economic indicator, doesn't it?

It's almost easy to forget the Great Recession hit here hard. Roughly the size of the greater Phoenix area and twice the size of Las Vegas, the IE's real estate losses rippled through Wall Street and around the world as the underlying assets on billions of dollars in mortgage backed securities failed.

WesCorp owned a lot of those securities, so the region's losses indirectly rippled through the credit union industry, too. There has been a lot of fist shaking directed at the NCUA since WesCorp failed. How could the regulator have allowed WesCorp's investment authority to grow so far out of whack with its organic, member-owned size?

When you review the chart shown at left, keep that question in mind. It was was also published in our Dec. 10 print issue, accompanying the page one lead story, “Former NCUA Board Members: Revive Hearings.” (Click on the chart to expand.)

You'll notice that during the budget hearing era, there were only small increases. Some years saw a reduction. Improvements in technology allowed the NCUA to improve efficiency and a reduction of its ranks through attrition seemed like a good idea at the time.

Then the bottom fell out.

Remember when the NCUA hired Pimco to determine the value of corporate assets? The agency did that because it didn't have anyone on staff who could. The NCUA wasn't the only regulator caught behind the Wall Street curve, but surely, fewer examiners and no new hires didn't help matters any.

When the NCUA admitted it needed to hire 100 new examiners in November of 2008, it must have been terribly embarrassing for Chairman Michael Fryzel, the other board members and executive staff. But aside from saving face, it was also legally risky, considering the billions of dollars lost as, at least partly the result of, at best, inadequate corporate supervision.

Nobody should have been surprised when Chairman Debbie Matz discontinued the budget review in 2009. Credit Union Times quoted her in a November 2008 story about the NCUA's public 2009 budget proposal, in which she called the review process bad policy.

At the time, Matz was significant as a former NCUA board member, but the comment also carried a bit of foreshadowing, as Barack Obama had just won the 2008 election, and would nominate Matz to return to the board seven months later.

“Those being regulated will always advocate having the smallest budget possible. When I told regulators at other agencies about that process, they were horrified,” Matz said in the story.

Matz also had a history of wanting to hire more examiners during her first term on the NCUA board.

As a journalist, of course I favor a transparent budget process. However, there's also merit to the idea that credit union trade associations badgered the NCUA into reducing its ranks to the point where it couldn't handle a severe market downturn.

Our industry lobbyists are decent human beings, but if you were never on the opposite end of a daily phone call from former NAFCU President/CEO Fred Becker, during which he loudly expressed his dissatisfaction with your performance, you haven't walked a mile in the NCUA's shoes. (Becker was also liberal with his feedback to the press.)

While it's unreasonable to expect the NCUA to operate with no budget increase, the agency probably should defend annual budget increases of 6% or even this year's 4.2%, when credit unions are already struggling to pay their own rising operating expenses and maintain compliance.

After all, those same credit unions endure a grilling from their boards when they submit their budgets each year. A little accountability wouldn't hurt the NCUA, either.