RALEIGH, N.C. — As credit unions seek to grab a bigger share of deposits, State Employees’ CU has become the first credit union to publicly disclose its confidential financial condition as determined by regulators–its CAMEL code.
SECU, one of the fastest growing big credit unions, said its CAMEL code–with 1 the highest and five the lowest, for the third quarter of 2010 was a 2. During that period the credit union had a healthy return-on-average assets of 1.2% and net capital of 7.1%, a healthy --"well-capitalized" under NCUA's minimum capital rules--but not a very-high level, which may have prevented it from being rated CAMEL 1. SECU has typically maintained lower net capital as a way of returning more of its earnings to its members.
The $23 billion credit union, the second largest in the country, said it sought permission from regulators, who generally bar public disclosure of the rating, “in an effort to test a new standard for full transparency.”
SECU said it obtained special permission from the North Carolina CU Division to divulge its CAMEL code, which NCUA bars for all federally chartered credit unions.
The CAMEL rating system is a composite of five important moving criteria used by regulators to gauge the financial condition of credit unions and banks and stands for Capital adequacy, Asset quality, Management, Earnings, and Liquidity/asset liability management.
“State Employees’ Credit Union is identified by its member-owners as a trusted provider of financial services. At a time when so many other large financial institutions in the marketplace are not viewed as trustworthy, SECU wants to uphold its positive reputation through full transparency,” said Mike Lord, chief financial officer for the credit union giant. “We welcome the opportunity to test the value of disclosure of this rating with our members.”