A subjective examination process needs an objective appealsprocess, said Thomas Renz, president and chief development officerof the $32 million Commodore Perry FCU in Oak Harbor, Ohio.

That's why the credit union has elevated its exam appeal to theNCUA's Supervisory Review Committeeafter it was denied by RegionalDirector Herb Yolles in August.

Renz and CEO Mike Barr said Commodore Perry was the victim ofretaliation at the hands of their examiner during the creditunion's regularly scheduled exam earlier this ye

{ The story line:

• Oct. 26, 2012 Commodore Perry Appeal Set for Nov.7
• Oct. 25, 2012 CPFCU Prez, Attorney Say Appeals Process Dodges RealIssue
• Oct. 25, 2012 Appeals Panel Can Toss Commodore Perry ExamFindings
• Oct. 24, 2012 Ohio CU Left Wondering How to Prep forAppeal
• Oct. 11, 2012 NCUA Stands by Examiner in HarassmentAppeal
• Oct. 9, 2012 NCUA Buys Time in Commodore PerryAppeal
• Oct. 4, 2012 Commodore Perry FCU Says Documentation ProvesClaims
• Oct. 3, 2012 Ohio CU Says NCUA Examiner Harassed,Retaliated }

The exam report contained “inaccuracies and falsehoods” in areasthat specifically contributed to the credit union's lowest CAMELscore ever, Barr said.

Why did the examiner retaliate? Both men said the male NCUAemployee harassed and bullied employees, particularly female employees,to the point where the credit union leaders said they felt theirorganization was legally liable.

Barr said he contacted the NCUA's supervisory examiner andreported the conduct to her. He said he told the supervisoryexaminer he didn't want to file a formal complaint, but did requestthat the regulator send another examiner to complete the exam.

Instead, the supervisory examiner, who neither Barr nor Renzwould reveal by name, passed the information along to the NCUA'sOffice of Inspector General, which opened an investigation.However, the investigation began before Commodore Perry's exam wascomplete, and the examiner was made aware of the credit union'scomplaints.

“Not surprisingly, when he finalized the exam and issued thereport, we found a lot of things were inaccurate, including scoresthat were downgraded, which we could see weren't justified,” Barrsaid, explaining why the credit union accused the examiner ofretaliation.

Barr and Renz then submitted an appeal to Yolles in June,stating that they had the documentation to prove the examiner'sfindings were inaccurate. They received back a letter thatdenied the appeal, although Yolles did promise to send a differentexaminer to the credit union for its 2013 exam.

“I was very frustrated, because we were never contacted by theregional office to discuss the facts,” Barr said. “That's shocking,because the entire basis of the appeal is that we can prove thereport is untrue. All they did, apparently, was review theexaminer's report and come to the same conclusion he did.”

So, on Sept. 9, Barr and Renz submitted an exhaustive, 365-pageappeal to the SRC that includes documentation they say proves theexam findings are inaccurate. The two said they also requested toappear in person before the SRC, as is their right, but have notyet received a response from the NCUA.

“This is not a case of a credit union being angry about a badexamination score; this is an extremely clear case of retaliationthat clearly demonstrates the problem with the NCUA appellateprocess,” Renz said.

The credit union leaders have volunteered to serve as the posterchildren for S. 2160, the Financial Institutions ExaminationFairness and Reform Act, which would allow credit unions to appealexams to an administrative law judge, who would submit his or herfindings to the ombudsman of the Federal Financial InstitutionsExamination Council. NCUA Chairman Debbie Matz is the FFIEC'schairman. 

Renz said the credit union has told Sen. Sherrod Brown (D-Ohio)and Rob Portman (R-Ohio) about their exam appeal efforts and thatboth have offered their support. In fact, Portman signed on asponsor of the Exam Fairness Act, Renz said.

As for the NCUA's side of the story, Public Affairs SpecialistJohn Fairbanks said, “We cannot comment on any aspect of anypending appeal.”