Wendell V. Fountain - Author, Speaker, Business Consultant, Credit Union Strategist & Educator

The 2010 Financial Reform Bill--Really?

Posted: 07/12/2010

Sometimes I think I'm on the set of the classic film Casa Blanca--"I'm shocked, I'm shocked that there's gambling going on in this place!" Whatever happened to the silver bullet which was supposed to cure all governance and financial woes of the past and present, that is, where is Sarbanes-Oxley when you need it? That famous act of 2002 was supposed to put an end to corporate and financial misbehaviors, but it was only 65 pages in length. No wonder it was inadequate. If it had been say . . . 2,300 pages then we would have had a good comprehensive bill that would have cured Wall Street and all other financial problems in general for all time. Despite the number of pages, unlike the 2,700 page health care bill, some elected officials might even have read this one before voting on it. All I know is that the credit union movement-industry spent millions on compliance to Sarbanes-Oxley. What a waste of the members' money. Now, credit union managements and boards of directors can spend untold millions in compliance to a bill which totally ignored two of the biggest culprits of the recent financial meltdown--Fannie Mae and Freddie Mac! The bottom line is this bill is inadequate and primarily about little more than political posturing. Hopefully, members of boards of directors will not let my sarcasm deter them from the seriousness of what's happening in the economic and financial worlds, because there are specific actions which need to occur. (1) Do not wait for NCUA to interpret what's really in the bill. Members of boards of directors should read the bill themselves and by doing so can be proactive with the provisions therein. Since there will be in excess of 2,000 pages of this bill with which to deal, there is a practical way to approach this process. Equally divide the number of pages of the bill among the number of directors on the board. Have each board member make notes and highlight areas of concern for which they are responsible, allow about two weeks for directors to digest and comprehend the information, and then convene a special meeting of the board to discuss the findings of each director. As the old saying goes about how to eat an elephant--take a bite at a time. Understandably, many directors will not like this suggestion, but directors have a solemn fiduciary responsibility to fulfill, and this is a pragmatic approach to gaining knowledge and comprehension about legislation which cannot be ignored or avoided. (2) Credit union investment strategies should be developed judiciously, cautiously, and with a high degree of due diligence. Directors should encourage managements to reduce risk, within reason, as much as is possible. Exotic investment opportunities abound which increases risk and should be avoided by credit unions. If one must err, it should be on the conservative side of the financial equation.

DOME OF DESTRUCTION: A Return of the Federal Government to We the People

Posted: 05/09/2010

What goes on and has been going on under the dome of the U.S. capitol is antithetical to what the Founding Fathers of this land of providence ever intended. These people never planned that those who followed them would embrace and create actual political careers. For them it was about service to the nation--not a career. This deviation from the original intent can be corrected. It is called term limits! There is no reason a member of Congress should serve more than four terms and a Senator more than two. Extended stays in the rarified atmosphere of Washington D.C. is intoxicating and dangerous to We the People. I suggest that beginning in 2012 that long-term politicians must leave office and make room for others who wish to serve their country. It is time to end retirements and free health care for life for these "career" politicians. There is a way to accomplish this goal by simply buying off all those who currently are entrenched. Give them the same perks as their predecessors for their departure from office. Even if we have to pay them a tax-free million dollars for their previous service, let's get them out of the House and Senate. We the People would save billions or even trillions in the short and long runs. More importantly, we could regain the government originally envisioned by the Founders and Framers of the Constitution.

Premiere of Grazia (the movie) a Resounding Success @ Epic Theatres, St. Augustine, FL

Posted: 02/22/2010

The true suspenseful love story Grazia, A Fountain Production, adapted from the book Grace experienced a successful debut despite threatening tornadoes and downpours of rain (Florida sunshine). Hundreds came out for the limited engagement on January 21, 2010.  Many of the cast members and extras attended and had opportunity to visit with and sign autographs for moviegoers.  For more information about the film, visit the Web site @ www.graziathemovie.com.  Also, see articles written by Marcia Lane of the St. Augustine Record about the movie.

Dont' Drink the Kool Aid

Posted: 04/24/2009

This is not Jones' Town, and Jim Jones is no longer among us. He drank the kool aid. Credit unions, if you buy into the Obama Administation's plans, you also will become imbibers of the tainted liquid. Please, do not let the NCUA regulators pummel you into accepting "bailout" money. The Obama Plan is quite simple: destroy the heart of capitalism, and socialism will bring us all together so that we may learn of truth, light, hope, and prosperity. Any CEO or Board who buys into this nefarious concept should be summarily dismissed. If anyone believes what I'm saying is wrong, just ask Ken Lewis CEO of Bank of America. He wanted to give back "bailout" money, but the $45 billion he was FORCED to take is no longer returnable. The government is in and that, my friends, is the end of story.

Boards of Directors Have Been Marginalized

Posted: 04/06/2009

The Secretary of the Treasury, Timothy Geithner, has gone well beyond his role in the Obama Administration. It is a sad day in America when the government, in this case Geithner, forces the CEO of General Motors to resign. Where are we headed--to a Facist State? Geithner has given indication that if he doesn't like how bank CEOs are handling their jobs, he will force their resignations as well. Since when is it that a government official can dictate to the private sector? If this nonsense continues, then we've lost a cornerstone of capitalism. If he can dictate to the banks, credit unions are not far behind; thereby, ursurping power over the boards of directors of banks and credit unions. One can only assume he must be getting his marching orders from, his boss, Barack Obama. Is this some of the "change" Obama promised when he was running for the White House?

Pathway to Poverty--Individual and Government Spending

Posted: 02/11/2009

It's not difficult to end up broke as an individual or as a nation.  At the rate we're moving, as individuals and as a nation, we are headed for economic disaster!  It is human to immediately assign blame for this pathetic situation in which we find ourselves, and believe me, there is plenty of blame to go around.  It begins with the lack of self-decipline, financially, on an individual basis, which  lending institutions have have exploited beyond reason by doing everything they can to cause individuals to submerge themselves into an ocean of debt.  Never forget, debt is deadly! The next incredible problem with which, as a nation, we are faced, is the out of control spending accomplished by the previous and current bunch of politicos who are all wealthy and could care less about the individuals who make up this nation.  For example, if you think that Barack Hussein Obama and the members of Congress and the Senate are concerned about the individual or collective financial condition of this citizenry, you need long-term psychological treatment and evaluation, which brings us to were we are going now.  Just yesterday the Obama Administration got its approval to drive us further into the ocean of debt which these nitwits have helped to create.  It really does boggle the mind.  Does anyone realize that this nation is broke?  Is anyone aware of the $65.5 trillion of debt this nation owes in which this nation has submerged itself?  Doesn't anyone with a modicum of intellect get it?

The Nation's Financial Meltdown

Posted: 10/07/2008

Those of us who have been closely associated with the financial services industry were fairly certain the Community Reinvestment Act (CRA) forced upon banks by the Congress would ultimately blow up in their faces.  Having said that, most of us didn't realize that all of us as taxpayers would end up paying the tab.  Thankfully, credit unions were never forced to give loans to those whom had No Income, No Job, and No Assets (NINJA).  Barney Frank (D), who was responsible for oversight, over a year ago assured the American public that Fannie Mae and Freddie Mac were in good shape.  The public didn't know of his cozy relationship with certain management personnel, and it appears that a lot of other members of Congress didn't know either, or if they did, they kept their mouths shut.  Senators Hagel and McCain, Republicans both, were the only voices in the wilderness two years ago raising this concern as an issue.  If Barney Frank had any sense of decency, he would resign from his Committee and ultimately the Congress for his malfeasence in office.   But, since  he doesn't, he'll continue to be reelected by irresponsible voters of his District.  They had no reaction  to the gay homosexual ring which was run out of his Washington apartment  a number of years ago, so one can only assume he can do no wrong, and according to him, he has no responsibility for the financial mess in which we find ourselves.  He blames President Bush for the entire problem.  There is plenty of blame to go around on both sides of the isle, and some key executives of Fannie and Freddie should be tried in a court of law and incarcerated as was the leadership of Enron and other organizations which have committed such agregious acts from the private sector.  Rather than serving prison time, they are spending time counting the tens of millions of dollars they have received, while serving on Senator Barack Hussein Obama's Campaign as his advisors.  How disgusting!  Now, what all of this has led to is an unprecedented governmental incursion into the private sector by passing a $700 billion bailout package laden with pork.  This is a monumental mistake of epic proportions.  It is amazing how these irresponsible elected officials inserted their pet projects into the economic disaster without regard for the nation as a whole.  Every elected member of the House of Representatives who put one penny of pork into this particular package should be summarily turned out of office.  That goes for the one-third of the Senate who are up for reelection.  If anyone in the other two-thirds of the Senate, who are not up for reelection, put pork into the bill, they should be recalled.  Finally, if either or both of the Presidential contenders succumbed to the temptation to add pork, they should withdraw from the election and resign from the Senate.  That goes for Senator Joe Biden as well.  In the case of Governor Sarah Palin she had no opportunity to put a pet project into the bill.  The time has long past that these pathetic excuses for elected officials be held accountabile.

HOUSING MARKET: The Backbone of America

Posted: 08/14/2008

It was once said, "As goes General Motors, so does the rest of the country," if that were ever really true is questionable, but that is certainly no longer the situation in 2008.  It is possible that GM will soon be sliding into competitive oblivion, if they  continue to ignore and not produce electric automobiles.  Auto manufacturers from the East are in a race to beat GM to the marketplace, and they usually do, so GM's future is dubious. Despite the worldwide oil/energy crunch, which is hitting the U.S. economy hard and driving the need for an energy alternative, the nation is suffering greatest because its backbone has been compromised.  Falling housing prices (and value), fewer new housing starts, slumping sales, burgeoning inventories of existing homes, and an acelerated mortgage foreclosure frenzy have severly injured the financial industry.  Owning that special vehicle has taken a backseat to having a place to go called home.

MORTGAGE MARKET TROUBLES--Credit Unions Don't Panic!

Posted: 08/12/2008

The Wall Street Journal article "Mortgage-Market Trouble Reaches Big Credit Unions" by Mark Maremont, August 11, 2008, page A1 has certainly gotten the attention of credit union executives across the nation.  Though the article appears well-balanced, credit union leaderships should not respond in a knee-jerk fashion.  Simply stated, don't panic!  The mortgage and housing markets have had serious negative effects both deep and wide within the financial industry, and credit unions are not immune to some of this fallout.  The operative phrase used in the article was unrealized losses, and at this point that is exactly what they are.  A financial institution can only worsen the situation by selling short.  The best advice is to hold securities which find themselves in a negative position as long as possible before changing an unrealized loss into a realized loss.   Until this happens, it is still only a paper loss, not a real loss.  So, credit unions do not overreact to this economic crisis.  Mistakes were made by the financial industry which have had a negative affect on the credit union world, but it has not devastated the not-for-profit status of the cooperative system.  Weather the storm and learn from the errors committed by the for-profit sector, and lean ever more on the cooperative nature of credit unions by relying on honesty, integrity, and fiduciary responsibility in a financial millieu where lapses of ethical behavior, greed, and poor business practices have become commonplace.

Two Wonderful Educational Sources

Posted: 06/14/2008

I have been remiss in lauding two of the finest educational sources and resources, if you will, for too long.  First, let me mention the Credit Union Times and why it is such a valuable source of information.  To begin with, it provides current information about the credit union world, because it is a weekly, full-color publication which every credit union leader should review as soon as it crosses the desk.  Those who write for the Times do thorough investigative work, so you can rely on the reliablity and validity of each article.  In addition, it is reasonably priced.  The other source which is rather new on the credit union scene is Credit Union BUSINESS.  This publication is a monthly journal of in-depth articles especially for credit union professionals.  It is on a par with Fortune and other business publications which deal with current business and management issues.  Those who write for the publication are accomplished writers who are experts on the topic, and this publication, too, is reasonably priced.  I look forward to receiving my weekly copy of Credit Union Times and my monthly copy of Credit Union BUSINESS.