First, Bauer Financial already risk rates credit unions for free. Any member can check it out.

Second, slippery slope. Once people start releasing this information, those that don't will be suspect of hiding something. 

Many credit unions have hit a rough patch. After decades of a [No. 2] rating, to have a [No. 4] may bring an unwanted and unnecessary run on the credit union. Give them some time to work it out without everyone looking over their shoulder at each move. Besides, 99% of members are 100% insured by the NCUSIF. Those that have excessive funds should do so only at their own risk. They can ask for the financials and audit reports.

Sad to say, but the rating given by NCUA is capricious and very subjective, as admitted by NCUA themselves.

Even sadder, do those ratings really reflect the status of the credit union going forward? Many credit unions had nice ratings, and less than a year later, they were toast. Ratings, by their very nature, are backwards looking, not predictive. We need the investment warning: Past performance is not an indication of future success.

Saddest of all, now that the GAO has spanked NCUA for being asleep at the switch, their ratings and findings are all about risk elimination, not risk management.

Credit unions and members deserve better from a regulator. Telling or not telling the regulators [the] CAMEL score is a diversion at best and valueless in the extreme.

The decision to allow release of the CAMEL rating was with good intention, just not well thought out.  

Gregg Stockdale
CEO
1st Valley Credit Union
San Bernardino, Calif.
Assets
$34 million

The NCUA has been very clear on this matter. CAMEL ratings are to remain confidential. Because most credit unions are federally insured, the NCUA should have the right to determine actions that can and cannot be allowed when there is a potential impact on the strength of this insurance fund.

If the NCUA allowed public disclosure of CAMEL ratings, credit unions choosing to publish their No. 1 rating would have a distinct marketing advantage, while those without published ratings would be conspicuously absent. This could lead the public to assume that a higher degree of risk would be present at any credit union that did not publish a CAMEL rating. This impression could prompt account closures, which would ensure weakened performance of otherwise strong credit unions thereby weakening the strength of the NCUA insurance fund.

It is unlikely that the public would fully grasp the importance of the various aspects of the CAMEL rating system,  and there are consumer-friendly financial performance ratings systems available if credit unions choose to use them for marketing purposes. Credit unions are typically audited by a public accounting firm and receive an opinion on the credit union's financials. This opinion is available to members upon request. And, for inquisitive members who want to dig deeper on the performance of any particular credit union, Form 5300 data is available free to the public through the NCUA website.  

Donna Bland
President/CEO
The Golden 1 
Sacramento, Calif.
Assets
$7.5 billion

I really have a very mixed view of the issue. On one hand, I understand and appreciate the importance of transparency regarding a credit union's financial condition. But on the other hand, release of that kind of information creates public confusion of those credit unions that are truly ailing and those that are not.

Just because one credit union received a lower CAMEL rating does not mean that it is going down the tubes. And yet, the public might interpret that condition, leading to unforeseen circumstances. But any time such a rating is put out, it rings all kinds of bells and creates all kinds confusion on dispersal of dividends. And there are questions on how they are extended for one credit union and not another.

As for our situation in North Carolina, I am troubled by the attitude of the state regulator who seems to be proficient at stirring the pot. She [Jerrie Jay] did the same thing years ago over the courtesy pay controversy in which she took a strong a position and it turned out badly for her. As a result, some state-chartered credit unions eventually converted to federal. And now she seems to be in the same spot.