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Written with a healthy dose of humor that made me SMH, Executive Editor Heather Anderson’s column titled “SMH at FinCEN and the NCUA” appropriately criticized the U.S. Treasury’s Financial Crimes Enforcement Network’s embarrassing leak about at-risk credit unions published in the Wall Street Journal. Her column also exposed an important political dynamic that should be of great concern to officials within the credit union industry. The U.S. Treasury has a long-held agenda that includes reforming, and restructuring, the NCUSIF.

Equally disturbing was that, whether intentional or not, the U.S. Treasury apparently leaked the so-called confidential report to the WSJ, while neglecting to include the NCUA in the loop.  Financial Stability Oversight Council member and NCUA Chairman Debbie Matz would be justified in chiding FSOC Chairman and U.S. Secretary of the Treasury Jack Lew concerning the matter. After all, among its duties, the FSOC is charged with identifying and managing systemic risks, and protecting the financial system from terrorists and drug lords is a national priority. As Ms. Anderson alluded, the FinCEN’s faux pas could very well have been deliberate.

Anderson also suggested that “the NCUA continues to focus so much on protecting the share insurance fund while focusing too little on the industry’s reputation risk that arises from fraud.”  Accurate again, yet it was probably an understatement. The NCUA’s Fiscal Year 2015 Overhead Transfer Rate was 69.2%, suggesting that the NCUA is really a federal deposit insurance fund that runs a side business doing a few other things. Take away the deposit insurance function, and little remains but unnecessary costs.

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