ALEXANDRIA, Va. – An internal review conducted by NCUA’s Office of the Inspector General on events surrounding last year’s NCUA dispute over North Carolina State Employees’ CU’s disclosure of its CAMEL code concluded that the North Carolina regulator violated a bilateral agreement with NCUA by giving the credit union giant a draft document of resolution that is supposed to be reserved for regulatory use.
But the IG’s report, scheduled for release later this afternoon, failed to determine whether the $25 billion credit union’s September 2011 disclosure of its CAMEL code violated NCUA rules and regulations. “They never asked us to look into that,” William DeSarno, NCUA’s IG, told the Credit Union Journal, of the review requested by the credit union.
The IG was also unable to determine whether Jerrie Jay, administrator for the North Carolina CU Division, told SECU directors at a December meeting with NCUA executives that NCUA was threatening to pull the credit union’s share insurance over the dispute, as one senior NCUA executive alleged. According to audio tapes of the Board meeting, Jay appeared to be goading NCUA executives into threatening to suspend SECU’s share insurance, but there was no smoking gun, the report concluded.
The allegations were among those tossed back and forth between the nation’s biggest state chartered credit union and NCUA, which chose to penalize the state regulator for her acquiescence in the CAMEL code disclosure. Consequently, NCUA decided to require that all 48 state chartered credit unions that normally undergo just state examinations, also undergo NCUA examinations as well, at additional expense.
The dispute raised several issues, including states’ rights in determining issues such as the public disclosure of CAMEL codes, which rate a credit unions’ financial health.
According to NCUA’s DeSarno, while the CAMEL code disclosed by SECU was the state’s own rating, and not NCUA’s CAMEL code, it is considered part of NCUA’s regulatory system, which is protected under a bilateral agreement NCUA has with each state credit union supervisor.
Jim Blaine, president of the SECU, said he is unsatisfied with the IG’s report. He said he continues to be convinced that public disclosure of CAMEL codes is good for members and for the public. “This is not about CAMEL, it’s never been about CAMEL,” said Blaine. “It’s about regulatory reform and the need for more transparency.”
