Blaine filed a complaint with OIG, and after reviewing recordings of the meeting, the OIG determined Yolles did not lie. It was also determined that Jay did not make the announcement; misinterpretations of statements during an argument were to blame, the report concluded.

"We don't have a hidden agenda here of trying to find a way to terminate insurance. You're the one," Yolles is quoted in the transcript as saying at one point. Jay countered that Yolles' declaration of SECU not being safe and sound is the first step toward such a move.

"An objective consideration of Jay's voice inflection throughout the exchange with Yolles could also lead a reasonable listener to conclude Jay was strategically attempting to extract from Yolles an admission that NCUA's intention–albeit unstated–was to withdraw share insurance from SECU, if it had not already begun to do so," the OIG report said.

"Jay appears to be questioning Yolles about NCUA's actual or prospective intentions, much in the manner of a cross examination and not necessarily making an unequivocal pronouncement that NCUA had in fact initiated the termination process," the report said.

SECU President/CEO Jim Blaine said he doesn't know why the NCUA questions his Raleigh-based credit union's safety and soundness.

"You need to ask him, we can't get a straight answer," he said, referring to Yolles.

The NCUA doesn't like SECU's practice of making nonconforming mortgage loans, Blaine said, but added, "our portfolio is performing."

"We have a good track record, and if we're wrong, we say show us your model, and we can then tell you why we think you're right or wrong," he said. "But they don't have a model. Their answer to our board is 'we would just sleep better at night.'"

According to March 2012 Call Reports posted on the NCUA's website, SECU charged off nearly $11 million during the first quarter, $8.1 million of which came from mortgage loans, including $5 million worth of modified first mortgages. While that might sound like a large number, due to SECU's size, its net charge offs to average loans was only 0.30%. Delinquencies in March were reported to be 1.69% of total loans.

When asked about the safety and soundness charge, NCUA spokesman John Zimmerman said the agency does not comment on supervisory matters.

According to data provided by the credit union and NCUA financial performance reports available online, the credit union's net worth has remained consistently between 7% and 8% since December 2000.

Blaine said although managing net worth just above well-capitalized standards makes him an outlier, SECU prefers to return value to members instead of stockpiling capital. SECU keeps $9 billion invested in Treasury bills, and Blaine said he could sell them and return deposits to members if he needed to quickly boost his Tier 1 net worth.

"We should not ask our members to cough up more capital because they are very well protected," he said.

According to data provided by SECU, if the credit union were subject to FDIC's BASEL capital requirements, which count both Tier 1 capital and risk-based capital, it would be well above the banking regulator's 10% total risk-based capital requirement, at 19.72% as of March 31, 2012.

Blaine also said he is dissatisfied with the OIG's conclusion that Jay leaked confidential NCUA documents to SECU.

The report outlines the agency's belief that Blaine, in a July 2010 meeting with regulators, was reading from a draft document of resolution that came from an exam the previous month.

The OIG's investigation revealed that on June 16, 2010, NCUA Principal Examiner Matthew Nixon emailed copies of the document to Kellie Daniel, NCCUD senior examiner. Daniel forwarded the email to Jay, who on June 18 forwarded it to Mike Lord, SECU senior vice president of finance.

Blaine does not dispute the OIG's email trail or the fact that he had a copy of the report. However, he said Nixon emailed the report to SECU's audit staff June 16. The OIG's report confirms Nixon said he also sent the document to SECU.

The report also addressed whether or not the document Blaine had was the copy provided by Nixon, or the copy emailed from Jay, which contained identical information but had different formatting.

On March 20, Yolles told the investigator he was "50/50 certain that Blaine was reading from the DOR" forwarded by Jay. The investigator told Yolles that an identical document was given to SECU by Nixon, and he then asked Yolles if it was possible Blaine was reading from that document, rather than the one routed through Jay.

"Yolles stated he was still pretty certain Blaine was reading from the draft DOR," the report stated. "Yolles explained further that based on an inquiry his office conducted, he concluded that no one at NCUA provided the draft DOR to SECU; rather, the only way SECU could have obtained it would have been from someone at the NCCUD."

Later, on April 10, the investigator re-interviewed Yolles at his request. In that interview, Yolles said after rethinking his earlier statements, "he was now 100% positive that Blaine had the draft DOR in his possession" at the July meeting.

When asked why he changed his statement, the report said Yolles said his originally answers were intended to "err on the side of caution." However, after reconsidering, he had no doubt Blaine possessed the draft DOR that was routed through Jay.

Blaine dismissed the charge of leaking the information, saying "it's typical, in every exam" for the NCUA to provide draft DORs to credit unions. He accused NCUA of trying to "trash Ms. Jay and go after state-chartered credit unions," making a reference to NCUA's decision to subsequently conduct separate examinations for all state-chartered credit unions in North Carolina.

Zimmerman said NCUA's dual examination period in North Carolina has ended, and because the exams were funded out of the general budget, the event did not result in increased costs for the regulator.

The OIG report also contained new information about the subsequent release of the CAMEL score by SECU, which Blaine said was done for the sake of transparency.

The NCUA crackdown included not only separate examinations, but the agency said it "would no longer provide computers or training to the NCCUD and would begin directly processing quarterly Call Reports from N.C. state-chartered credit unions."

Blaine said before releasing his state CAMEL rating, which was done as a pilot program with the state regulator, he first met with North Carolina's state attorney general and made calls to the North Carolina congressional delegation.

He called NCUA's decision to impose dual exams on all state chartered credit unions "a very aggressive attack on the state chartered system of North Carolina." 

Despite the conflict caused by the CAMEL rating fracas, Blaine said he thinks his goal of more transparency is gaining ground.

"Maybe all this fussing and yelling is making progress for us all, including the regulator," he said. "You see NCUA coming out with a new exam manual, they're having these listening sessions and that training in Florida, and they have acknowledged a need for more consistency."

He called corporate credit union failures and conservatorships of banks and credit unions "a disastrous situation in the financial community that calls for change," and added, "we need to get it right because, let's face it, the next round of failures would kill us all."

Jay did not respond to requests for comment.