Duh of the Week: I-R-O-N-Y

by Ron Daly 

Irony. It's the soul of a good joke or a turn of phrase. It's hard to define, but the kind of irony we're talking about today is the kind that comes from expecting one thing and getting another...or maybe the same thing in a different way. 

See, the NCUA posted a fraud alert Tuesday of last week about a letter that had reached a credit union bearing the NCUA logo and bearing the signature of Michael Fryzel (read that fraud alert here). The alert told CUs to be on the lookout for similar letters bundled with a set of compact discs, and told them to disregard said letter and not to put the disks into any of the computers. 

Then, on Friday of last week, this came through (read the fraud alert update here). 

From the release:

As part of an an internal "system penetration" test, a credit union created a facsimile of an NCUA Fraud Alert. This was an unauthorized and improper use of the NCUA logo, and also included a falsified signature of then-Chairman Michael Fryzel. The bogus alert was forwarded to NCUA, prompting the issuance of the August 25 Fraud Alert. The false Fraud Alert appears to be confined to that credit union, and is not wide-spread.

D'oh! 

Turns out, the CU that got "frauded" was "frauding" itself. The false alert set off a real alert. Can you spell "irony"? 

I'm sure that in the future, whichever CU it was will be using some fake agency name and not the NCUA. Good to know, of course, that the NCUA is willing to post alerts and follow up on them (they even have an RSS feed of news, which is handy). Here's hoping our "Duh of the Week" award will be a reminder to all CUs to keep an eye on their fraud drills - and avoid irony. 

Duh of the Week: The Best Idea...EVER.

by Ron Daly 

Giveaways. Back in the day, giveaways were the thing to have. Free toaster with a $30 deposit? Remember that? The finance industry knew its market, people that were saving for niceties could get them for free by becoming an investor or a member. I've seen some creative ones recently that are a little less needs-based, like emergency car kits, radios, t-shirts, gift certificates...the list goes on.

But recently, we've been falling down. We need to step it up a little, enter the 21st century. Who wants a crummy toaster? Who wants toast, come to think of it? It's just bread that hurts your mouth. 

Let's talk this through. What do you give away in a state with a very high average rainfall, little sunshine, and a 9.2% unemployment rate...like Washington State, for example, that would make people happy and help them forget all their troubles?

Well, if you're anything like this Harley dealer, a gun. 

Yep, Eastside Harley-Davidson is giving away a gun with the purchase of a new Harley (click here for the news story). 

I'm not the President. I don't know what this country "needs". But I DO know one thing - we need to learn from these folks and get on that same boat. "Every member that joins gets a hand grenade and a ski mask", maybe? I'll tell you right now, that's a member enrollment campaign that's gonna win some awards. 

In all seriousness, no, I can't see where giving away a handgun and a Harley is wise. Maybe Eastside felt the same way? They had a fun video to go along with their promotion, but they've taken it off of YouTube. They posited that people who took advantage of the offer would still be subject to background checks, the same procedures they'd go through if they were buying a handgun from a gun store. Still, there's no lawyer in the world who's going to say that "free gun with purchase" is a good idea. Maybe they talked themselves out of it. 

Enjoy the DotW, Eastside. Check the mail for your complimentary copy of Have Gun, Will Travel (Sorry, had to work that joke in there somewhere.)

Duh of the Week: A Fox to Guard Your Chickens

by Ron Daly

We've given this award to a few crooks before. Nothing like this, though. 

Let's talk about Max Ray Vision, the computer hacking expert hired by - get this - the Departments of Defense and Energy, the US Air Force and NASA to test their system security. The man who was sent to prison in 2001 for leaving vulnerabilities in these systems was re-hired as a government informant upon his parole. In the time he worked for the feds, he stole thousands of account numbers and PINs and distributed them on an info-trading website. 

Let's go back over that. 

1) He works for the government and hacks their websites
2) He goes to jail for compromising government information
3) When he gets out of jail, the GOVERNMENT HIRES HIM AGAIN
4) HE STEALS MORE INFORMATION AND GOES BACK TO JAIL

Who on earth got the bright idea of putting this guy back to work on the government dime? Who couldn't see that putting the chickens under the watch of the fox wouldn't work? 

You might think, faithful reader, that we're about to award Mr. Vision the "Duh of the Week" for his two arrests and his Dick Tracy-esque name. No. The "Duh of the Week" - and a high pole position for the "Duh of the Year" - goes to the Government for hiring this guy twice. And being caught with their fly down...TWICE. 

Enjoy the award, recruiting personnel for the Departments of Defense, Energy and NASA, respectively. Hopefully nobody steals it - especially the person you hire to protect it.

Now, if you'll excuse me, I'm off to rent a DVD copy of "Catch Me If You Can". 

Duh of the Week: A PennyMac for your thoughts

by Ron Daly 

Once upon a time, there was a giant lending house called Countrywide. When the financial crisis struck down a number of lenders in 2008, Countrywide was one of the first to go. Having gone through two years of controversies, lawsuits and accusations by the SEC, Countrywide had to be absorbed by Bank of America. BofA has decided to dissolve the Countrywide brand altogether, as thousands lost their homes and their mortgages due to over-inflated appraisals and bad lending and payment policies. 

But the story doesn't end there. The former Number Two at Countrywide, Stanford Kurland, decided to open a new vulture firm - nicknamed "PennyMac"  [click here for the CU Journal story].

The business model, as it's explained in this Business Insider article, works as such: PennyMac buys bad loans from busted banks or the FDIC for next to nothing, follows up with the homeowner and asks if that homeowner wants to keep paying for the loan at a reduced rate, then makes double the price they paid for the loan in profit. 

Stop laughing, I'm not joking. 

Duh of the Week: Asleep at the Wheel

by Ron Daly

I could give this award to a number of people, but for some reason this was what ticked me off worse than anything.

President Obama took yesterday to meet with credit card industry leaders at the White House to start working on a credit card consumer bill of rights. A serious topic near and dear to credit unions and members alike which we talked about earlier this week. All was going pretty well, the discussion was said to be lively...and then this happened.

Click here to see "Larry Summers Falls Asleep...AGAIN" [YouTube]. 

Click here to read about it on ThinkProgress.org