Thomas Renz, president and chief development officer for the $32million Commodore Perry FCU, didn't decide to become an activistwhen he appealed the credit union's  2011 exam. Instead,the Credit Union Times 2013 Political Action TrailblazerAward winner contended that  he's always been one.

“One of my board members was a high school teacher of mine, andshe will attest to fact that I've been speaking my mind since oldenough to do so, for better or worse,” he said. “I've learnedthrough hard knocks that sometimes I need to have prudence. But tothe core, that's who I am.  For me, it stems from what'sright and wrong, and if it's right, it's worth fighting for.”

Challenging the NCUA certainly qualifies for a lesson in hardknocks, which is what Renz and Commodore Perry did when it appealedits exam results. Before Commodore Perry's appeal in 2012, only four appeals in the last 10 years had been elevated to theNCUA's Supervisory Review Committee, and in all four cases, the SRCruled in favor of the regulator.

Commodore Perry's appeal met the same fate when the NCUA toldthe Oak Harbor, Ohio-based credit union Dec. 19 that the SRC alsodenied its appeal. 

Or so it seemed. Renz told Credit Union Times Jan. 22that NCUA Chairman Debbie Matz granted Commodore Perry a 60-dayextension on its appeal. The new deadline is March 18.

Renz said the extension aims to provide the credit union andRegional Director Herb Yolles an opportunity to iron outdifferences between the two that led to Yolles denying the originalappeal. Commodore Perry claimed that its examiner, Roger A. Clark,made inappropriate comments to management and staff during hison-site examination. Renz said he and CEO Mike Barr called theirsupervisory examiner and asked to have Clark replaced. Although thecredit union didn't want to file an official complaint, the natureof the allegations triggered an automatic investigation. Clark wasmade aware of the complaint and investigation before theexamination was complete. Renz alleged that Clark then retaliatedin the form of a downgraded CAMEL score.

The NCUA's Office of Inspector General investigated the matter and concluded it could not substantiatethe allegations. 

Renz admitted the 5,000-member credit union's project list in2011 was a long one that included building a new headquartersbuilding, upgrading the core processor and switching credit cardproviders. 

“Our existing building was literally falling down, it was anembarrassment,” he said. “With our core system, we couldn't pullthe right data and we were limited in offering the services ourmembers needed. And with the credit card vendor, we weren't gettinga very good deal.”

Renz acknowledged that the hefty to-do list did increase thecredit union's risk, but he also insists Commodore Perry properlymanaged those risks.

“That's why I had a 1,000-page appeal because that's what ittook to show how much work we put into managing these things,” hesaid.  “My view is given all we did in one year, theyshould have raised our management score, not lowered it, because wedemonstrated that we could manage a tough year like that. The proofis in the pudding because we finished the year very strong.”

According to Commodore Perry's financial performance reportposted on the NCUA's website, the credit union finished 2011 with a$189,745 loss fueled by a $191,761 nonoperating expense. Net worthdropped to 8.52% as a result.  However, 12-month loangrowth was above peer at 4.87%, as was Commodore Perry's 71.78%loan-to-share ratio. 

Last year was more profitable. Commodore Perry reported a$39,348 net profit as of Dec. 31, 2012. Net worth dropped furtherto 8.34%, due to rising delinquencies, but loans grew another 7.21%resulting in a 74% loan-to-share ratio.

Renz said the 2013 budget and strategic plan predicts, despite“very conservative” numbers, that Commodore Perry will have a verysuccessful year.

“We took some very hard steps in 2011 to build a credit unionthat was successful both in risk management and management ingeneral,” he said.

Last year's examination, conducted by a different examiner,resulted in an improved CAMEL score, Renz said. So why is thecredit union continuing to pursue the appeal?

“While we believe the NCUA's appeals process is there togenuinely protect credit unions and is generally a very functionalprocess, we felt this was a case that demonstrated a major flaw inthe system,” he said. “It's difficult to ensure the credit union'sprotection. Ultimately, we've been willing to stick our necks outto illustrate that flaw and ensure that in the event it happens toanother credit union, they won't face the same overwhelming oddsthat we have.”

The NCUA has already made changes to the appeals process,releasing a letter to credit unions Jan. 31 that said the regulator willinclude more information regarding formal and informal appealsoptions on its exam report letter and will provide contactinformation for examiners and supervisory examiners on the pre-examplanning letter.

Renz is new to the credit union industry. His position atCommodore Perry, which began in 2011, is his first. He had recentlygraduated from law school at Case Western Reserve University inCleveland, and while there was mentored by famed attorney HenryKing, best known for his role as aU.S. Prosecutor at the NurembergTrials in 1946. Renz also interned as a legal clerk forformer Rep. Dennis Kucinich (D-Ohio), who was known for hisactivism.

Because Kucinich had already lost his primary race, Renz said hedidn't reach out to the congressman for help with the exam appeal.However, he said he has been in contact with both Sen. SherrodBrown (D-Ohio) and Rob Portman (R-Ohio) regarding the issue, andboth offices have provided support and advice to the creditunion.

“We haven't asked them for a lot, but it's been very usefulduring this process to say we're having ongoing conversations withour senator's offices and updating them on situation,” he said.

Balancing all the interests involved in the appeal–CommodorePerry, trade associations, politicians and news coverage–has been achallenge, Renz said. 

Well known in the small resort town of just 41,000 permanentresidents, Renz was recruited to work for Commodore Perry by BoardMember Charlene Filmore.

“She knew me growing up,” he said. “She introduced me to thecredit union, and the rest is history.”