RALEIGH, N.C. (1/31/12)--The North Carolina Credit Union League said it will conduct a special meeting Wednesday to discuss how to protect its credit unions following the National Credit Union Administration's (NCUA) decision to require dual exams. The move came after the Raleigh, N.C.-based State Employees' CU got authorization from its state regulator and disclosed its state-issued CAMEL score.
NCUA said the dual exams are needed to protect the National Credit Union Share Insurance Fund and the credit union system.
The CAMEL rating system is NCUA's method of evaluating the health of credit unions. The rating, adopted by the NCUA in 1987, is based upon five critical elements of a credit union's operations: (C) Capital, (A) Asset quality, (M) Management, (E) Earnings and (L) asset Liability management.
"The league feels it is important to give our credit unions the opportunity to ask questions and share their frustrations," John Radebaugh, league president/CEO, told News Now about the reason for the meeting. "The state regulator of credit unions in North Carolina, as well as the chair of the North Carolina Credit Union Commission, will be on hand to offer information and answer questions. Both federal and state-chartered credit unions have been invited to participate in this meeting, as we feel that this in an issue that impacts all credit unions in North Carolina.
"This is the first time that our credit unions will have a chance to meet together since they found out that NCUA would be conducting separate examinations," Radebaugh continued. "For credit unions, it will be a chance to hear from their state regulator in person, ask questions and share their perspective. This is a very frustrating time for our credit unions, and we feel that it is important to promote an open and transparent environment that allows our credit unions to see all sides of this issue and participate in the dialogue.
He noted that the league is "in the process of setting up a similar meeting with NCUA and all of our state and federally chartered credit unions."
North Carolina credit unions are well capitalized and among the healthiest credit unions in the country, said the league. As NCUA stated, the action is not the result of any safety and soundness concern about state-chartered credit unions in North Carolina, the league added.
"We have 53 state-chartered credit unions in North Carolina that will now be facing two exams per year--one from the state and one from NCUA," Radebaugh explained. "For approximately 45 of these North Carolina state-chartered credit unions, this is the first time they have ever had NCUA examiners in their credit union. The regulatory burden is real and significant for these credit unions.
"The bottom line in this is the regulatory burden on credit unions is at an all-time high, [and] we need state and federal regulators working together to protect credit unions and their members," Radebaugh said. "Dual examinations on safe, sound, and healthy credit unions do nothing more than add to the regulatory burden and ultimately distract credit unions from focusing on serving and meeting the needs of their members."