I was very happy to see both Chip Filson and Jim Blainesupport the release of CAMEL ratings (CU Times, Jan. 25, page 1).

I have long supported the release of examination ratings and thefindings behind those ratings for all credit unions. The creditunion system relies on member ownership. The members elect theboard of directors to protect their ownership interest in thecredit union. Member owners must have actionable data to hold theboard accountable. Members need to know the health of their creditunion. The many recent corporate and natural person failures pointto the need for more member oversight. Annual meetings and auditfinancials are not enough. Members should see the ratings and thefindings behind those ratings.

NCUA’s Region III Director Herbert S. Yolles has informed NorthCarolina credit unions that their state regulator, North CarolinaCredit Union Division, violated NCUA rules by authorizing therelease of the state-issued credit union rating. Yolles states thatthe release of the state-issued ratings is contrary to theinterests of credit unions and contrary to the interests of theinsurance fund.

I disagree completely. The release of examination ratings andthe findings that support those examinations are criticalinformation that member owners should have. Does Yolles believethat owners of the credit union are not entitled to know whetherthe board and management are running a safe and sound credit union?The NCUA has so far been content to wait until the credit union hasfailed to inform members that the credit union had inadequatecapital, impaired assets, weak management, weak earnings orinsufficient liquidity.

Every credit union in the country knows what that is like. Mycredit union only found out that our corporate was in trouble afterit failed, and we lost our capital. That was the extent of NCUA’sprompt and corrective action. I maintain we would have been farbetter off had the NCUA released examination ratings and findingsfor all of the corporates after they presented them to thecorporate boards.

Yolles may be concerned that releasing examination ratings andCAMEL ratings might say as much about the NCUA’s performance, orlack thereof, as that of the credit union. In fact, that is whatthe NCUA Inspector General’s reports imply and what the GAO reportimplies and what the KPMG audit of the stabilization fund implies.

I call for all credit unions to support the release of CAMELratings and exam findings, at least in a form similar to themanagement letter a CPA would give to the board. No business ownershould be in the dark about how well their business is managed.Transparency will make credit unions better, and it will make theNCUA a better regulator. Our members should not have to wait untilthe credit union fails to find out something is wrong.

Henry Wirz
President/CEO
SAFECredit Union
North Highlands, Calif.