Unfortunately, it has become increasingly difficult for the credit union industry to discuss the NCUA board's regulatory rulemaking without a profusion of expletives. The NCUA's regulatory pendulum has swung from the overly permissive cheerleading that led to the corporate credit union crisis to the opposite extreme of paralyzing restrictions and business plan- impaling prohibitions. This unending flood of rigid and restrictive rules leaves little doubt that the NCUA board intends to zealously micromanage federally insured credit unions in a compelling demonstration of interventionist government run amok.

In just a few short months of rulemaking, the NCUA has scolded federal credit unions about their financially illiterate boards of directors, reduced legal protections for volunteer board members, made mergers and conversions more complicated and costly, decreed that the NCUA board and senior staff rather than credit union officials know what's best for every credit union's members, and asserted that credit unions are not smart enough to decide how many corporate credit unions to which to belong, if any. The NCUA board has also promulgated new rules concerning executive compensation and the use of ratings agencies and established implementation plans for other mandates in the ill-conceived Dodd-Frank Act, such as requiring credit unions to have gender and ethnic diversity policies–with many more burdens to come. And that is just the short list of the credit union industry's regulatory grievances.

As an example of the agency's micromanaging at its worst, the comment period recently closed for the NCUA's proposed new follow-up rules affecting corporate credit unions. It appeared from the 150 comment letters that the two least popular provisions were the one limiting retail credit unions to membership in only one corporate credit union and the one that would require "voluntary" payments for the corporate crisis stabilization from CUSOs, trade associations, cooperatives, and nonfederally insured credit unions–and their expulsion from membership if they didn't pay up. The NCUA-mandated expulsion looks eerily like a public pillorying characteristic of puritanical colonial times–more suitable for drunkards and witches than for responsibly governed financial institutions.