First regulators have graduated from assessing premiums on credit unions to curbing credit union executives' compensation packages. The NCUA and other financial services regulators are required under the Dodd-Frank legislation to curb executive compensation packages that could create a conflict of interest with regard to the long-term safety and soundness of a financial institution.

The goal of the regulation absolutely makes sense. But this is the job of the boards of directors and not the federal regulators, particularly as it pertains to credit unions. The unpaid board's entire purpose is to ensure long-term viability of the credit union so it can continue serving its members. Legislating this is bad public policy and represents further infringement of the government into free-market enterprise.

The regulation also attacks a symptom that took place by some bad actors rather than the root of the problem. Many things went wrong causing the current economic crisis, including lack of oversight of unregulated entities like mortgage brokers and the conflict of interest at the ratings agencies. And, some were outright breaking the laws and regulations already in place. Police officers don't install breathalizers in all vehicles just because some drivers choose to drink and drive. Conversely, look how well Prohibition went in the late 19th and early 20th Centuries!