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Ohio league highlights exam issues to lawmakers
WASHINGTON (9/26/12)--The Ohio Credit Union League (OCUL) told lawmakers in a recent letter that it "has several issues" with a recent report by the National Credit Union Administration (NCUA)  Inspector General (IG) that critiqued both the agency's examination procedures as well as its process for hearing credit union complaints about examination issues.

The league criticized both the IG's study process, which it called "flawed,' as well as its findings.

In a study released earlier this month, the NCUA's Office of the Inspector General (OIG) found inconsistencies in how small credit union examination policies and procedures are implemented. However, according to the OIG report, the NCUA's recently released National Supervision Policy Manual addresses these and other examination concerns.

The OCUL letter, which was sent to Sens. Rob Portman (R-Ohio) and Sherrod Brown (D-Ohio), noted that the OIG study's methodology, and its conclusions, were both flawed. OCUL President Paul Mercer said the OIG should have consulted with credit unions as it prepared the study, and also took issue with conclusions regarding the NCUA's examinations, ombudsman and appeals process.

While the OIG report stated that the level of communication between NCUA examiners and credit unions was adequate, the OCUL said that credit unions have told the league they are still having issues.

"There must be strong and consistent communication between examiners and credit unions during the examination process," the letter said.

Credit unions also lack confidence in the NCUA's examination determination appeals process, the letter added. The OCUL suggested the NCUA could improve its appeals process by adopting an appeals process that includes a full review of the facts of each appeal case, and a final decision by an independent administrative law judge. The NCUA's ombudsman could also address examination appeal issues presented by credit unions, rather than focusing almost exclusively on complaints made by credit union members.

"A truly empowered ombudsman, focused particularly on the issue of retaliation, would go a long way toward strengthening the confidence of credit unions in the appeals process," the letter said.

Mercer added that the OIG report has strengthened OCUL support for the Examination Fairness and Reform Act (S. 2160), which would improve the exam process for financial institutions. S. 2160 and a similar House bill, H.R. 3461, would make information gathered by financial regulatory examiners available to financial institutions, codify certain examination policy guidance, and establish an exam appeals process that would allow financial institutions to air grievances before an independent administrative law judge. Both bills have been referred to their respective financial institution committees.

For the full letter, use the resource link.


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