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We Need Continuing Education for Politicians, Bureaucrats, and Government Regulators

It is amazing how many rules and regulations are put forth by government bureaucrats and regulators demanding various professionals who hold licenses to go to ongoing education classes. Most of these classes are mundane, and more about demanding that the professionals submit to authority to maintain their licenses, than anything that will help the consuming public with important safeguards. In many regards as a business owner this totally irks me because we have bureaucrats in Washington DC, and at the state level making more and more rules and regulations each and every year.

It seems that they just can’t help themselves, and they assume that anyone that violates one of their rules or regulations is unethical, an evil doer, or trying to dodge their responsibility in protecting the public. That’s just not the case, often their rules and regulations don’t fit the circumstances, and the entrepreneur or business person is just trying to service their customers despite all the bureaucratic nonsense in the way.

I’ve come to the conclusion over the years, and I’ve even brought this up at our think tank, that politicians, bureaucrats, and government regulators need to have ongoing education for themselves. This is because many of them have never run a business, or participated in the free market system, therefore they don’t understand it.

Rather than the business community getting angry at all the nonsense, why not just make it mandatory that these people working in the government learn the ropes of the real world. What should we be teaching them? Well, here are three items below that might be a good start;

1. Free Markets
2. Constitutional Refreshers
3. The Inefficiencies of Government Bureaucracies

First of all, maybe they need some on-the-job training, and actually work in a business, and mirror as a temporary tagalong with an actual small business person to see how difficult it is to run their operation with all the nonsensical regulations that are put forth. Then I believe they need to read Milton Friedman’s “The Right to Choose” and DeLorenzo’s “How Capitalism Saved America,” and of course Ayn Rand’s classics.

Finally, I believe these bureaucrats and politicians need to take constitutional refresher courses so they don’t promote laws which impede our rights as citizens, business owners, or our right to free contract. You see, these folks need to understand that bureaucracies are by their very nature inefficient, and therefore every time the government does more, they create inefficiencies not efficiencies in free markets. Yes, we need ongoing education classes for politicians, for bureaucrats, and for government regulators. That’s only fair.

Increased Financial Aid For All Mothers With Obama’s Scholarship For Moms Program

The scholarship that President Obama made for mothers gives hope to moms in America. While some mothers are struggling to make ends meet, others have decided to take action and take advantage of this opportunity. Today, it is reported a rise in women, including mothers that are taking college courses. This should be encouraging to other mothers who want to go back to school but are hesitant because of personal reasons. Well there is a glimmer of hope for mothers looking to better the lives of them and their family but their finances are holding them back. This scholarship program offers financial aid for mothers who want to go back to school but do not have the funds to do so.

By applying for these federal and state grants and scholarships, mothers increase their chances of obtaining a higher paying job and their chances of advancement are better. They will gain more respect in the workplace and when it is time for a raise, an education looks good to an employer.

If you want a college degree, if you already have a degree but you want to further your education or want to go into another field altogether, the Scholarship for Moms Program can help. Most mothers applying for these grants and scholarships have other obligations such as working full-time and taking care of their family. However, if schedules are hectic and it is hard to find time to actually attend class at a college campus, college course can be taken online. Many state and community colleges offer degrees online.

Whatever the choice is, going to class online or on campus, Obama’s Scholarship for Moms Program provides financial aid for either choice. The first step is to fill out the application and that is the beginning of your future! So for all those moms out there who say, “I wish I would have gone to college,” here is your chance. You can receive financial aid, which will lessen the financial burden, and you can focus on obtaining that degree you wished you had gotten a long time ago.

Finance Education for Bank and Credit Union Directors: Lending Is a Risky Business

When it comes to director finance education, the differences between banks and credit unions fade away. The message is clear for all directors. Understand the finances of your financial institution well enough to do your job as director.

How would you answer these questions?

  • How do I know what I should know about financial institution finances?
  • How do I know if I know it well enough?
  • How would I demonstrate that I have met my responsibilities in this area?

Duty of Care

All directors of every type of board have a ‘duty of care’ which requires “such care, including reasonable inquiry, as an ordinarily prudent person in a like position would use under similar circumstances.”

The idea of a reasonably prudent person does not provide for a clear-cut definition. At the very least, the director should seek information from reliable sources outside of their financial institution’s management. Bank and Credit Union conferences are a good source for this outside perspective. I recommend each director keep your own records of your continuing education.

Test yourself: The Seven Risks

The regulators do give some guidance. Here is a quick quiz. Before you continue to read this article:

  • List the seven types of risks found in depository institutions that the regulators indicate are essential for a director to understand
  • Define each of the seven in a sentence or two
  • Rate your financial institution on each (poor, fair, good, excellent) and explain why you chose that rating

I’ll tell you the seven risks at the end of this article. Before you check, consider how difficult or easy that quick exercise was. If you are a director, do you need to better understand the risks or how to evaluate your financial institution in the seven areas?

Test yourself: Your Board Packet

When you receive your next board packet, consider the ‘dashboard’ metrics provided. Is there information about capital ratio? Loan growth? Deposit growth? Loan to deposits? I am not suggesting these are the best or the only metrics for your board to monitor, but I am wondering what you are provided.

Then consider:

  • Do you understand how that metric is calculated?
  • Is increasing or decreasing favorable for that metric?
  • If it is changing, is that movement or that direction expected or unexpected?
  • Do you know what the target is? Is there a target?
  • How and why is it important to your financial institution?
  • How and why is it important that the board consider that metric?

Whose ‘Duty of Care’ is it, anyway?

The ‘Duty of Care’ is an individual duty of each director. It is one of the things you cannot delegate to management or to other directors. Three steps toward meeting the duty of care include taking independent action to understand your financial institution’s finances, learning about the risks you are responsible to monitor, and asking questions about the financial information you receive at board meetings.

The Seven Risks

The risks the regulators identify are right here. How did you do?

  1. Credit
  2. Liquidity
  3. Interest rate
  4. Compliance
  5. Strategic
  6. Transaction
  7. Reputation