State Employees' Credit Union has asked the NCUA's Office ofInspector General to investigate “untrue'' statements made by a keyNCUA official about the credit union's release of its CAMEL rating.

State Employees' CU President/CEO Jim Blaine contends that theNCUA based its decision to stop joint examinations of NorthCarolina's state-chartered federally insured credit unions –and conduct its own – on two statements made by NCUA Region IIIDirector Herbert Yolles.

Blaine said Yolles erroneously accused his credit union ofimproperly obtaining a draft of a document of resolution that wasbeing developed by the NCUA from the North Carolina Credit UnionDivision.

“We received the draft as a normal part of the exit interview,''Blaine said in an interview.

In addition, Blaine disputes Yolles' contention that NorthCarolina Credit Union Division Administrator Jerrie Jay said in ameeting that NCUA had initiated the process of terminating NCUSIFprotection of the credit union's share accounts.

Blaine said that Jay had merely asked if the agency wasconsidering that action.

That discussion occurred because during the NCUA's insuranceexamination it raised concerns about the quality of the creditunion's mortgage lending, asset liability management andgovernance.

SECU didn't release the letter it received on this matter fromthe NCUA but in its response letter to the agency, the board notedthat the credit union was in compliance with GAAP and is wellcapitalized.

The statements that Blaine is challenging were made by Yolles ata Dec. 6 meeting with Jay, NCUA Executive Director David Marquisand NCUA General Counsel Michael McKenna. Jay has also refuted theaccuracy of Yolles' statements in a letter to the agency and saysshe has a taped copy of the meeting.

Blaine wrote NCUA Inspector General William DeSarno asking himto review the statements made by Yolles.

“The statements are untrue and we would welcome your visit withSECU to confirm that statement and to discuss suggested remedies,'Blaine said in his letter.'

DeSarno replied and asked Blaine for more documentation.

The NCUA has accused the state agency of violating regulatory trust and erring in authorizing the $24billion State Employees' CU of Raleigh to publish its CAMEL 2rating.

The NCUA responded by conducting its own examinations of thestate-chartered CUs, saying it was necessary to protect theNCUSIF.