Greyhounds for everyone or bust!

A recent training session on lending gave me the opportunity to reflect on some of the more off the wall loan experiences I have had over the past 13+ years of working in finance.  It is absolutely amazing what you get to see as a lender.  Applying for a loan and borrowing money puts a person in such a vulnerable position that you get the unique opportunity to see people operate in a way they don't often act in other circles.  It also lets you see just how crazy some of us are.  Here is one of my favorite examples of the latter.


While working for a consumer finance company, fresh out of college, I had the chance to get to know a gentleman with an almost obsessive love for dogs.  Greyhounds to be more specific.  The wire-thin near starvation look of these gentle creatures just melted this otherwise gruff auto worker's heart.  He always came in to see me with a greyhound shirt, greyhound hat...once I am almost certain that he was wearing a necklace with a gold greyhound on it.  A little over the top yes, but nothing compared to some horse people I have met, but that's another story altogether.  Anyway, the wardrobe is not what makes this guy stand out in my memory, the fact that he took his love for these mild mannered speed demons to a level few would have the nerve to, makes him memorable.

This man, we will call him Joe, decided that after 30 years or so working for a Toledo based auto manufacturer, he was ready to retire and pursue his passion.  (Let this be a cautionary tale to those who have dreams of a post-retirement career that turns their hobby into a job) Joe had saved up a considerable amount of money over the 30 years of putting cars together and he knew precisely what he would spend it on, greyhounds.  More precisely, racing greyhounds.  Even more specifically, retired racing greyhounds.

Here was his business plan, more or less:

1. Purchase a decommissioned Greyhound bus.
2. Convert bus into mobile kennel to house greyhounds.
3. Drive mobile kennel to dog tracks, wherever they may be.
4. Convince owners at the race track to allow him to "rescue" their older dogs.
5. Fill the bus with these dogs.
6. Socialize and care for said dogs until they are ready to be adopted.
7. Drive the mobile kennel to pet shops and fairs to set up a greyhound adoption center.
8. Adopt out the greyhounds, clean the cages, repeat.

Joe had a dream.  Joe had some money.  Joe had no idea what was in store for him.  He found the bus.  I made him a loan to purchase and renovate the bus because based on his credit and money down, it was a decision well in line with the criteria for approval.  I underestimated just how badly Joe had underestimated just how badly things could go.  

Joe spent upwards of $20,000 on the bus.  Joe never checked on what licensing requirements are involved in running a mobile kennel adoption center for retired racing dogs.  Joe never consulted with a veterinarian to see what costs may be involved in getting these often neglected creatures healthy enough to be adopted into loving families.  Joe never considered another very important fact.  Not everyone considers greyhounds to be the cuddly, loveable creatures he does.

  Things went terribly wrong for poor Joe.  His first rescue mission resulted in him being forced to negotiate terms with the track and dog owners for the retired dogs, paying more for each of them than he could ever hope to adopt them out for.  Then there was the issue of shear volume.  Joe anticipated a few dogs rescued from each track along his trail of canine freedom.  First track, over 30 dogs.  Then came the reality that many of the dogs were not healthy, were not at all socialized and were certainly not housebroken.  Vet bills nearly broke him within the first month.  Feeding and housing the herd of scrawny savages did finally break him a few months later.  Things didn't end well for Joe or his dogs, as most had to be adopted out through the local humane society and other rescue groups.  In the end Joe was left with nothing but the memories and a very foul smelling bus, which was in turn repossessed and sold for pennies on the dollar.


I'm not sure there is a moral to this story, but if there was it might sound like this:

If you have a passion, that's great.  If you are willing to sell all of your worldly possessions and jeopardize your family's future to pursue that passion, be sure you have a well thought out business plan; and it helps to not have that passion involve dogs.

One man's treasure...

I've heard the old adage a hundred times, one man's junk is another man's treasure.  Good stuff.  Very wise.  I get it.  

In my neighborhood Thursday morning is trash pickup.  That means that Wednesday night is the night when the garbage pickers make my junk into their treasure.  Call me crazy but this concept fascinates me.  I am awestruck by the bold disregard for social norms and the willingness to voluntarily pin on the stigma that goes along with diving headfirst into a dumpster or sorting through the recycling bin beside my trash for a "special" bottle.  From what I have noticed they seem to like the "good stuff"...wine bottles mainly.  I did notice that they took the empty Black Seal Rum bottle that was left in the bin the week after vacation.  The Dark & Stormies I made were great, but I don't think the empty bottle will really do anyone a bit of good.  If I were a paranoid type I might assume that they are collecting evidence of my vices and "evil ways", storing them up for the possibility that I might someday make a run for church elder or something.  I can see them popping up from a middle pew, bottles in hand shouting out the names my sins..."and on August 19th, 2010 I picked up an empty bottle of Shiraz and 4 empty bottle of Guinness....shame on YOU!"

It actually makes me take a second look at the recycling as I drag it to the curb.  I look it over to see how I have done the prior week.  Some weeks I have to actually grab a few "good" bottles and put them on top to be sure the pickers don't think I've switched to the cheap stuff.  I wouldn't want to tarnish their image of me.

I hear the familiar sound of the old Dodge now...I better go prepare my offering.

Get Your Hands Out of My Member's Savings Accounts!

After taking the crazy month of July off of blogging, I have decided to get back on the writing wagon.

 Let me start by saying that I am a big fan of the NCUA, for the job it has done in the past, keeping credit unions operating safely and  member's deposits secure and insured.  I even appreciate them stepping in over the past few years and making the corporate credit unions step up and be accountable to their member credit unions for the assets they manage.

Alas, the love affair is over.  Now...I'm mad.

Last year, as a part of the plan to "stabilize and recapitalize" corporate credit unions the NCUA snatched over $175,000 from MY members. (we are just under $40 million in assets...just imagine what the tab was for the $1 Billion shops!)  Most of these members have never heard of corporate credit unions.  Non of them have ever deposited a penny in a corporate credit union, and non of them were given a say in the decision to "give" this money to the NCUA to use as they saw fit.  The corporate credit union that we deal with (there are over 20 nationwide)is well capitalized and run conservatively, as it should be.  

Now I understand the need to strengthen the corporate credit union system.  The corporate credit unions act for credit unions as the Federal Reserve Banks do for the banking industry and yes, as a natural person credit union we do rely on them for processing and clearing.  They are a necessary and vital part of the credit union machine.  We dealt with it, we made budget changes to manage around the giant hole it left in our earnings.  We did not cry over spilled milk, even though the puddle was huge.

We planned for more NCUA antics this year...but I underestimated their greed.

This June the NCUA took another $42,000+ from my members.  Again with no real explanation and without the courtesy of a thank you.  We had budgeted for this.  This September the rumor has it we will see an even bigger request.  This one I didn't see coming.  Another giant handout to secure the NCUA's insurance fund, used for covering credit unions who have fallen below what the NCUA considers to be soundly capitalized, therefore "failing" in their eyes.  Very few credit unions actually "fail".  Most are forced to merge with a stronger credit union who then absorbs the members of the failed institution and adopts them as their own.  Think Brady bunch, with less polyester.  Often this is actually a positive from a member's perspective because it can open the door for more products and services then their previous credit union could offer.  This isn't always the case, but I try to look at the bright sides of the cooperative movement when possible.

What the NCUA is doing now, and will likely continue to do for the foreseeable future is wrong, it is self defeating, and it is at face value downright scandalous.  They are in essence taking the very capital away from the natural person credit unions they they are insuring, making us all weaker and less stable because, they say, we are weaker and less stable.  They say they need this additional capital because the capital ratios of credit unions are falling, but they are falling in large part because of the money that the NCUA is siphoning off.  It's easy to make up the rules of the game as you go when you don't give the players a voice or a vote.  The credit union industry is based at its core on cooperation and democratic control.  We give our members the right to vote and to actively participate in the governance and direction of the credit union.  I think that in the true spirit of the institution they are charged to protect, that the NCUA should give each credit union under its jurisdiction a vote.  They can give us the facts, explain why they need the money and put all of their cards face up on the table.  Give us time to look at our hands and then let us cast a vote.  Then WE are the ones who are on the hook to explain to OUR members where their money went, if we see that it really is needed in Washington.  The NCUA is in place to protect the deposits of credit union members.  Period.   It is an entity that is in business FOR credit unions and therefore, our members.  The least they can do is ask the members of the credit union movement to give their input, insight, and vote as to what they want to happen with THEIR hard earned money.

I will continue to run my credit union for the benefit of my members and NOT as a vehicle for funneling assets to Washington.  The NCUA, I fear, has become just another cog in the bureaucratic machine, losing the desire to listen to the people they protect.  They have caused us to tighten our belts to the point of wage freezes and cuts to programs, stifled growth and stopped momentum for a much needed expansion even though there would be no need for any cuts without the assessments.  Come Hell or high water though they WILL NOT keep us from serving our members who after all, own every penny of the assets we are stewards of, and that the NCUA can't seem to keep their hands off of.