RALEIGH, N.C.-State-chartered credit unions here no longer face the specter of two separate exams now that the North Carolina regulator and NCUA have agreed to work together again.
NCUA had cut off the state regulator from its joint examination process, saying it would no longer work with the North Carolina Credit Union Division (NCCUD) after then-Division Director Jerrie Jay authorized State Employees Credit Union to publish its CAMEL code. After Jay's retirement, eight-year NCCUD veteran Assistant Administrator Rose Heston Connor became acting administrator on Jan. 2. At a summit between NCCUD's Connor and NCUA Chairman Debbie Matz, Connor agreed the division would not authorize the release of any CAMEL codes going forward, thereby ending the stalemate.
"We are authorized to allow it," Connor told Credit Union Journal. "It's my discretion, and where it is my discretion, the division will not authorize the release of any CAMEL codes."
NCUA strongly objected to release of the information, noting it is prohibited from doing so by order of Congress.
CAMEL Still Purview Of State
Though Connor was careful to point out that the release of a state charter's CAMEL code is under NCCUD's purview, she said the driving force behind her decision not to authorize such moves in the future was to remove the massive compliance burden that had been placed on state charters as a result of the dispute. "This was going to subject our credit unions to two exams per year. That is a huge burden on our credit unions," she said. "What I wanted to do was to move forward."
NCUA Chairman Debbie Matz confirmed the outcome of the meeting. "Administrator Conner has given me her word that NCCUD's affirmative policy moving forward will not authorize any public release of confidential examination information, especially CAMEL ratings," she said in a statement. "With this new commitment and policy from the state regulator, we look forward to resuming joint examinations, training, and open communications with NCCUD."
Ill-Fated Pilot Program
The release of $25.4-billion SECU's CAMEL code was part of a pilot program, Connor explained. "The previous administrator consulted with the state attorney general to determine whether the division had the authority to allow the release of a CAMEL code," she said. The request to release the data stemmed from an inquiry from SECU, the nation's second-largest credit union and the only one to release its CAMEL code. It was the attorney general's legal opinion that the division was authorized to do so, at which point the division gave SECU its blessing to publish its CAMEL code in its annual report.
That touched off a firestorm of debate, both between the state and federal regulators, as well as among credit unions in North Carolina and across the country as to whether publishing the CAMEL code simply gave members information they, as owners, had a right to know, or whether it set a dangerous precedent that could eventually lead to a run on a credit union that either refused to publish its CAMEL rating or had a low CAMEL rating.
Following the Feb. 8 meeting between NCCUD and NCUA, Connor sent an e-mail to all North Carolina charters informing them that the two regulators had resumed working relations and would again conduct joint exams, rather than subject state charters to two separate exams.
