Commodore Perry FCU President Thomas Renz told Credit Union Times Wednesday he's not sure how to prepare for the $32 million credit union's upcoming appeal with the NCUA's Supervisory Review Committee.
Rather than disprove to the three-person SRC that its exam findings were inaccurate, the Oak Harbor, Ohio, credit union has been told it must instead prove Regional Director Herb Yolles' reasoning was erroneous when he denied the original appeal.
That's a problem, Renz said, because Yolles did not consider CPFCU's documented evidence that disproves the 2011 exam findings when he denied the appeal.
{ The story line:
- Oct. 26, 2012 Commodore Perry Appeal Set for Nov. 7
- Oct. 25, 2012 CPFCU Prez, Attorney Say Appeals Process Dodges Real Issue
- Oct. 25, 2012 Appeals Panel Can Toss Commodore Perry Exam Findings
- Oct. 24, 2012 Ohio CU Left Wondering How to Prep for Appeal
- Oct. 11, 2012 NCUA Stands by Examiner in Harassment Appeal
- Oct. 9, 2012 NCUA Buys Time in Commodore Perry Appeal
- Oct. 4, 2012 Commodore Perry FCU Says Documentation Proves Claims
- Oct. 3, 2012 Ohio CU Says NCUA Examiner Harassed, Retaliated }
“I understand that the burden should be on us, but given the weaknesses in the appeals process, they're not even looking at the original issues at this point,” Renz said. “Ultimately, what we have here is a situation where the regional director can say whatever he wants and we have to prove him wrong.”
The central complaint of CPFCU's appeal was an accusation that its examiner retaliated against the credit union in the form of a riskier CAMEL score after Renz and CEO Michael Barr complained that the examiner sexually harassed and bullied CPFCU employees.
The supervisory examiner who took the complaint passed it along to the NCUA's Office of Inspector General, who immediately investigated the complaint and interviewed the examiner before CPFCU's exam was complete, Renz said. The OIG backed up the examiner, saying it did not find evidence of retaliation.
In a Sept. 25 letter clarifying the denied appeal, Renz said Yolles wrote “the Examination Overview is not intended to be a justification of the risk ratings or the CAMEL codes.”
Renz said that statement has left him wondering just how, exactly, the NCUA justifies the scores.
“It is my understanding that the Administrative Procedures Act requires a reasonable explanation for these types of ratings and codes to prevent arbitrary and capricious findings, and if a Regional Office of the NCUA is stating that the only part of the examination report that discusses these codes is not the explanation, then what is?” he said.
According to the NCUA's Supervisory Review Committee policy statement, appeals must include “the determination or denial being appealed and the reasons for the appeal. Appellants are encouraged to submit all information and supporting documentation relevant to the matter in dispute.”
The NCUA also said in in its June 2011 newsletter than when considering an exam appeal, the regional director “will weigh the facts and reach a decision.”
Yolles did provide some justification for the codes in the Sept. 25 letter, Renz said, but he called it “weak, irrelevant and outdated”; specifically, references to examination findings in 2010 and 2009. Furthermore, Renz said Yolles' explanation, which he declined to make public, differ from the exceptions listed on the 2011 exam overview and resulting Document of Resolution.
“I don't know if this was done on purpose or just a product of the appeals process being broken, but what's happening here is the original wrong is not being addressed,” Renz said. “Basically, what NCUA is saying is I have no regress. They're saying tough, live with it.”
Renz said the exact date and time of the appeal will be finalized between the two parties.
NCUA Public Affairs Specialist John Fairbanks said he was not immediately able to comment regarding the appeals process or the credit union's claims.
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
Already have an account? Sign In Now
© 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.
