The CAMEL rating controversy in North Carolina got ratcheted up a notch with a new appeal by the North Carolina Credit Union League to the NCUA and the state’s Credit Union Division to resolve quickly their exam dispute now causing significant operational harm.
In a letter to NCUA’s Region III Director Herb Yolles and Jerrie Jay, division administrator, the league said the squabble over last October’s CAMEL rating disclosure by State Employees’ Credit Union and the start of dual exams has now created a confusing, unacceptable regulatory climate for the state’s 48 state-chartered, federally insured credit unions and needs to be solved.
The sudden and what CEOs describe as “lengthy two-week exams” performed in the past few weeks “have been universally viewed by North Carolina credit unions as harsh and unnecessary at best,” said the league letter signed by John Radebaugh, president/CEO.
“Many have voiced their opinion that NCUA was trying to send a message to the NCCUD by bullying state-chartered credit unions that had nothing to do with the issue of disclosure of a state CAMEL code,” said the letter sent Monday.
As the insurance reviews have been carried out, said the league, “our state-chartered credit unions are receiving conflicting guidance or no guidance at all on issues ranging from how to amend a Call Report to the sharing of state federal exam findings”
This confusing environment, said the league, “is a natural consequence of having two regulators that are not working together.”
Radebaugh said it is vital that the two agencies start working together to protect the dual chartering system.
“Again we ask each of you commit to a meeting in the coming weeks—not months--that will provide the NCUA and the NCCUD the opportunity to open up a dialogue,” wrote Radebaugh, State-chartered CUs “need clarity as to how the agencies intend to address this issue.”
In his letter, Radebaugh noted that the conflict is complicated and many sided “with competing interests.” For its part, the $23 billion SECU said it acted in seeking disclosure authority as part of broader public policy concern on transparency in light of its falling under purview of the Consumer Financial Protection Bureau as a $10 billion institution.
Responding to the Radebaugh letter, Jay, the North Carolina regulator, repeated her contention that she has previously tried to meet with NCUA lawyers to resolve the fracas.
“We continue to look forward to the NCUA returning to North Carolina for a meeting with their general counsel and the division’s counsel,” said Jay. “I requested such a meeting last year and have not had a response to that request,” a point disputed by NCUA officials, claiming it has never turned aside a dialogue.
A response from the NCUA was not immediately available.