The North Carolina dispute over the publication of CAMEL ratings escalated Friday with fresh complaints by the state’s top regulator that the NCUA is acting arbitrarily and causing undue financial expense to state-chartered, federally insured credit unions by its new separate exam policy.
Feb. 10, 2012 - NCUA Says Dual Exams Over, For Now
At the same time, Jerrie Jay, administrator of the state’s Credit Union Division, accused the NCUA of creating confusion and dragging its feet concerning resolution of the exam scrap triggered by last October’s disclosure of CAMEL ratings by State Employees’ Credit Union of Raleigh.
The NCUA recently announced it would no longer do joint examinations with state regulators in North Carolina and that state-chartered, federal insured credit unions there would have to undergo two separate exams because of the disclosure.
“North Carolina credit unions are utterly baffled by the NCUA’s action and we’ve asked Yolles to come to Raleigh to meet with our general counsel but we have yet to get a response,” said Jay, who on Wednesday joined a lively “town hall” style meeting of the North Carolina Credit Union League to air the CAMEL controversy.
In her comments, Jay was referring to NCUA Region III Director Herbert Yolles, who in January accused Jay of acting illegally in authorizing publication. At the same time Yolles also wrote the 52 North Carolina state charters that SECU’s action to publicize the ratings “was an unacceptable release of exempt records.”
Jay told Credit Union Times the agency has yet to make clear “exactly what law we are violating, which is one reason I’ve asked them to meet with us.” In the meantime, state CUs have already started undergoing the new dual exam schedule “with NCUA examiners coming in from all over the country” to conduct the new exams, Jay said.
While not commenting directly on Jay’s latest request, an NCUA spokesman said the agency “understands the concerns” and that on Thursday Yolles and NCUA general counsel Michael McKenna briefed the league board as part of a dialogue on the topic.
Meanwhile, in vigorously defending disclosing its CAMEL rating, the $23 billion SECU said it has acted under broad policy issues impacting CUs everywhere related to financial transparency and the obligation to members to be “completely out front” on the CU’s condition.
That policy stems in part from the tightened regulation SECU faces under the Consumer Financial Protection Bureau, which has direct oversight on all financial institutions of above $10 billion in assets.
SECU President/CEO Jim Blaine spoke at the Wednesday league meeting in Raleigh. He said he fully understands CU complaints about the added expense “and the give and take that has occurred,” but that at the same time there are major policy and regulatory issues at stake which must be faced the industry as a whole.
Yolles has said the release of the CAMEL scores could threaten the NCUSIF and credit union depositors.