I’ve Seen The Enemy And It Is Us

September 27, 2013 at 8:47 am Leave a comment

Yesterday, a vote by the Senate to temporarily fund the government beyond October 1 was delayed by Republican Senator Mike Lee (Utah), a leading opponent of the health care law.  This maneuver followed closely on the heels of a 21 hour filibuster by Senator Ted Cruz (Texas), again motivated by a last ditch effort to defund Obamacare.

But if you really want to know just how dysfunctional Washington has become, all you need to know is that Republican Senator Bob Corker (Tennessee) responded to Lee’s objections by saying “the reason that we’re putting this off is because they would like for people around the country that they have notified to be able to watch.”  In other words, a Republican Senator is accusing another Republican of putting his interest in grandstanding to potential national supporters above the interest of his constituents, the Senate and the country.

I personally think the Senator from Tennessee has a point and I would love to see more Republicans stand up to these so-called Conservatives before they can do even more damage to the country’s economy, but increasingly that doesn’t appear to be the case, which means that the Sunday talk shows are required watching for anyone responsible for plotting your credit union’s path given the potential trajectory of the economy over the next six months to a year.

First, it appears unlikely that the House Republicans and President Obama will be able to avoid a government shut down.  When this happened in the late 1990s, the economy had already picked up steam.  But take a look at NCUA’s most recent video recap of current economic conditions and how they are impacting credit unions and you will realize that this is no time to be playing games.  Employment rates continue to be sluggish and credit unions are already being impacted by uncertainty over interest rates.  Plus, for those of you with large numbers of federal government employees in your SEG groups, make sure you’re ready to provide whatever short-term help you can to these individuals who will find themselves with no paychecks in the coming days.

This scenario is bad enough, but right around the corner, probably some time in late October, but no one knows for sure, the Government will run out of its spending authority to satisfy creditors financing the national debt.  A fringe group of so-called Conservatives has somehow deluded itself into thinking that the fiscally responsible thing is to threaten to let this country default on its payment obligations if the President does not agree to a host of their most cherished reforms.

Whether you agree or disagree that government spending is out of control, ask yourself how you would respond to a member who informs you that he is no longer going to pay off his credit card bills or mortgage in the name of fiscal responsibility.  That is exactly what some members of Congress are threatening to do.  If the worse case scenario plays out, our members will pay the price for this stupidity.

I would like to say that the issues having the most direct impact on credit unions today has nothing to do with D.C. politics, but I’d be wrong.

New York Posts Proposed Force Placed Mortgage Insurance

As I mentioned in a blog earlier this week, New York State is proposing new force placed insurance regulations intended to clamp down on affiliate relationships between servicers and insurance providers.  The regulations were officially posted September 26, which means you now have 45 days to respond to this proposal.  My guess is that it will only impact a very narrow group of credit unions, but I think it’s worth taking a look, just to be sure.

On that note, have a great weekend and let’s hope that you and your friends and family get along better than the U.S. Congress.

Entry filed under: Economy, General, Political. Tags: , , .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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