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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.

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.

The NCUA, the NCUSIF and the Temporary Corporate Credit Union Stabilization Fund are separate eggs held in the same inseparable deposit insurance basket. Although many within the credit union industry would prefer to purge it from their memories, the U.S. Treasury stepped in to assist the NCUA with tens of billions of dollars to manage the corporate credit union fiasco that could have been an industry-killer.

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