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News Now

CU System
N.C. league seeks dialogue with regulators on dual exams and other issues
RALEIGH, N.C. (2/7/12)--The North Carolina Credit Union League held a special meeting with its members Wednesday last week to discuss how the National Credit Union Administration (NCUA) and the North Carolina State Credit Union Regulator can resolve their differences regarding disclosure of a credit union's CAMEL rating and the use of 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 (News Now Jan. 31).

The NCUA has disputed the disclosure of the credit union's CAMEL rating, for several reasons, including the fact that the state provides the rating to the NCUA which treats it as confidential information. The NCUA has discontinued its coordinated examinations with the state regulator, opting instead to begin separate exams for state-chartered federally insured credit unions in the state, over the next four weeks. In other states, the NCUA routinely conducts joint safety and soundness examinations with the state regulator.

"More than 70 people attended the meeting Wednesday to share their concerns and to ask questions of the state regulator, who was present at the meeting," John Radebaugh, league president/CEO, told News Now. "This meeting was a healthy exchange of ideas and part of the continuing process of gathering information."

The league also has talked extensively with NCUA officials.

"The solution to this situation clearly rests with both the North Carolina Credit Union Division and the NCUA," Radebaugh said. "The league will continue to work with state-chartered credit unions in the meantime to assist them through an unacceptable situation that they did nothing to cause."

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.

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.

Because the regulatory burden on credit unions is at an all-time high, North Carolina credit unions need state and federal regulators working together to protect credit unions and their members, Radebaugh told News Now last week. Conducting dual examinations "on safe, sound, and healthy credit unions does nothing more than add to the regulatory burden and ultimately distract credit unions from focusing on serving and meeting the needs of their members," he added.


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