WASHINGTON -A student-run credit union's publication of its CAMEL 1 rating has raised the ire of NCUA. The Georgetown University Alumni and Student Federal Credit Union published its CAMEL rating on its Web site (www.guasfcu.com), trumpeting the mark represents "the first time an entirely student-run credit union has been awarded a CAMEL 1 rating by the NCUA." Student-run credit unions face a challenge most credit unions don't – very high turnover, albeit scheduled turnover. The NCUA adopted the CAMEL Rating System in October 1987, to provide an accurate and consistent assessment of a credit union's financial condition and operations in the areas of Capital Adequacy, Asset Quality, Management, Earnings, and Liquidity. The agency stresses that the number is meant to be only an "internal marker" and not a grade to publicize said Molly Schar, spokeswoman for the agency. "It's a matter of regulation that credit unions not disclose their CAMEL ratings," Schar said. Disclosing them could be risky because a shift downward could lead to a lack of public confidence in the credit union, she explained. "Suppose a credit got a 1 in one year and then the next year got a 2 or a 3," Schar said. "That could cause a run on the credit union." But Georgetown University's Alumni and Student Federal Credit Union CEO Chris Petrilli, a senior at Georgetown, maintained that while the credit union's NCUA examiner had discouraged the credit union from publicizing its CAMEL 1 rating after it was awarded in March or April of last year, the examiner had not mentioned that posting it on the credit union's Web site would be against the agency's regulations, he said. The credit union's Web site noted that it was the first student-run credit union to have ever received the marker. (Despite the clash with NCUA, the CAMEL 1 posting was still on the Web site as of press time. See image.) The determination of what a credit union's CAMEL rating is is a decision left up to the discretion of a credit union's examiner, according to Schar. As part of the examination process it is subject to review by a supervisory examiner and, rarely, by the examiner's regional office, she said. The CU publicizing its CAMEL rating came to light after the Georgetown Hoya, a student newspaper, ran an article alleging management difficulties at the $8 million institution. The article alleged, among other things, that the credit union failed to sufficiently train its 120 volunteer staff and that the credit union had recently decided to eliminate its supervisory committee. But Petrilli countered that the credit union did have a training program in place for its tellers and that not all the 120 staff members work in the same capacity. He pointed out that students who worked for the credit union on, for example, a marketing effort based on the World Wide Web would do most of the work from their own homes and on their own computers. He also pointed out that the credit union had a staff of 120 because it had very few staff that worked full-time, but instead students worked at the institution as often they could – working around their class schedules and other responsibilities. He also clarified that the credit union had not eliminated its supervisory committee, but had instead taken its examiner's advice and improved it. "In contrast to the article's impression, we still have an examining committee," Petrilli said. "Our examiner suggested that we might want to hire an outside auditing firm which would report to the supervisory committee, and that is what we have done," Petrilli said. "We determined that an outside auditing firm would be able to do a better job of evaluating and monitoring our different accounts and activities than a group of three students could," he added. The hiring of the auditing firm pointed to one of the key differences between student-run credit unions and other credit unions: student-run institutions have a degree of turnover in both their executives and their boards that is highly unusual in the credit union world. In GUASFCU's case, every two years the credit union turns over its executive and board positions. They don't move on to auxiliary or other advisory roles for the credit union. According to Petrilli, even though the name of the institution is Georgetown University Alumni And Student Federal Credit Union, none of Georgetown's alumni have leadership positions with the credit union and he estimated that alumni hold only 1,500 of the credit unions more than 7,000 accounts. But Bradford Caldwell, former executive director of the Campus Credit Union Council, said that extensive planning on the part of the credit union prevented the turnover from being a significant risk. Caldwell served as executive director of the CCUC from 1999 until May of 2002, when he left the position to pursue graduate studies in Phoenix, Arizona. Previously, during his undergraduate tenure at Georgetown, Caldwell served as an officer with the credit union, but never on its board. "The turnover is not a problem because everyone knows it's going to happen," Caldwell explained, contrasting the situation with other circumstances whereby a credit union might lose a portion of its leadership unexpectedly. "Everyone knows that in two years the credit union positions are going to be open and so everyone is always planning for that to happen, training the people who are going to be the next generation of leadership." Caldwell couldn't remember the specifics, but estimated that at most one or two of the nation's 11 student-run credit unions had ever been asked to bring in a paid manager to handle some problem that had arisen in their institution. "It has happened," Caldwell said, "but has been very rare." Caldwell also noted that when paid outside managers have been brought in, they have been brought in for only a short time and not on a permanent basis. Caldwell said that he was not surprised that his former credit union employer had received a CAMEL 1 rating. "We had CAMEL 2 ratings when I was there," Caldwell said, adding that in the late 1990′s the examiners acknowledged that only a small number of faults kept the institution from being recognized as a CAMEL 1 operation. Gillian Coulter, the current executive director of the CCUC also pointed out that the trend in recent years has been for student-run credit unions to become little more than self-governing branches of larger, more established, institutions. "It makes it hard to keep track of which institutions are truly still student-run," she said. [email protected]