The NCUA examiner accused of retaliating against the $32 million Commodore Perry FCU displayed either extremely gross negligence or retaliation, said the Ohio credit union's president and chief development officer.

The credit union is awaiting a ruling, due Oct. 9, from the NCUA's Supervisory Review Committee regarding its exam appeal. The appeal is only the fifth heard by the committee in the past decade; none of the previous four were ruled in favor of the credit union

{ The story line:

Thomas Renz provided Credit Union Times with a list of the exam's exceptions, including charges CPFCU failed to complete a cost-benefit analysis of existing products, services and facilities; failed to reconcile bank accounts, particularly before a planned system conversion; and will pay more, not less, for outside professional services as a result of the conversion.

Documentation also provided by the credit union, including a third-party product and location market analysis report and general ledger reports, indicate that CPFCU did complete the due diligence in question.

CPFCU elevated its exam appeal to the SRC after it was denied by Regional Director Herb Yolles in August, although Yolles did promise to send a different examiner to the credit union for its 2013 exam.

Commodore Perry CEO Michael Barr said he was frustrated by the ruling, because nobody from the Region III office contacted the credit union to request supporting documentation.

Barr said despite the frustrating appeals process, the credit union will continue to make its case.

“We remain hopeful that the NCUA Supervisory Review Committee will review our appeal make a just ruling,” he said.

Regardless of the appeal's final ruling, Renz said CPFCU will continue to advocate in favor of S. 2160, the Financial Institutions Examination Fairness and Reform Act, which would allow credit unions to appeal exams to an administrative law judge, who would submit his or her findings to the ombudsman of the Federal Financial Institutions Examination Council.

The Ohio Credit Union League's John Florian, vice president of government affairs, said what he called the NCUA's weak appeals process and high percentage of appeals ruled in the NCUA's favor has created a lack of confidence among Ohio credit unions, Florian said.

Combine that with “real-world experiences” like those being reported out of CPFCU, he said, and collectively, it's enough to prompt the league to put the Exam Fairness Act front and center. The bill was the league's key talking point during its Hike the Hill event in Washington in June, he said.

OCUL Director of Media and Public Relations Patrick Harris said while the trade association has not quantified how many credit unions in the Buckeye State have experienced exam issues, some have expressed concerns.

“I think a lot of that comes from the landscape of Ohio,” Harris said. “Sixty-six percent of our credit unions are $35 million and under in assets, so some of these smaller credit unions are really having difficulty with NCUA transparency and exam consistency.”

The NCUA said previously it would not comment on an ongoing appeal.

Complete your profile to continue reading and get FREE access to CUTimes.com, part of your ALM digital membership.

Your access to unlimited CUTimes.com content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Breaking credit union news and analysis, on-site and via our newsletters and custom alerts
  • Weekly Shared Accounts podcast featuring exclusive interviews with industry leaders
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the commercial real estate and financial advisory markets on our other ALM sites, GlobeSt.com and ThinkAdvisor.com
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

Credit Union Management
Regulatory & Compliance