ALEXANDRIA, Va. – State-chartered credit unions across North Carolina today will receive a letter from NCUA stating it has finished its separate share insurance examinations of those CUs and will resume conducting joint exams with the North Carolina Credit Union Division as soon as it meets two conditions: it withdraws authorization for any federally insured CU to publish its CAMEL rating, and the NCCUD withdraws its approval for the pilot program being run by State Employees CU in which it is making its CAMEL rating public.
In the letter, Executive Director Dave Marquis says a healthy federal-state relationship is built on “mutual trust, cooperation and agreement on proper enforcement of regulations,” but because the NCCUD permitted SECU to disclose its rating the decision has led to a “loss of trust.”
“The fact that the North Carolina regulator took this unprecedented action without any prior discussion with NCUA made it even more disturbing,” Marquis wrote. “Given that we were unable to reach agreement on this matter with the North Carolina regulator, the only alternative for NCUA was to completely separate our programs and to conduct separate examinations of North Carolina credit unions.”
Marquis said NCUA formally requested the state regulator take the two steps related to publishing CAMEL ratings in a Dec. 5 meeting, and includes in the letter five bullet points to support NCUA’s contention that publishing CAMEL ratings can “jeopardize public confidence in credit unions.”
“NCUA’s intent is to minimize any burden to you, which is why we conducted our North Carolina exams quickly and protected your confidentiality,” the letter states. “We stand ready to resume our working relationship with the North Carolina Credit Union Division once the state regulator takes the two actions noted above.”
The NCCUD had earlier told Credit Union Journal it permitted the publication of SECU’s CAMEL rating only after consultation with the state’s attorney general. The North Carolina league has expressed concerns that ongoing dual examinations will cause tremendous strain on smaller credit unions.
