ALEXANDRIA, Va. — The NCUA approved a controversial final rule during its Jan. 10 board meeting that would allow the federal regulator to declare a state-regulated, federally insured credit union to be in "troubled condition".  

Previously, that authority was only granted to state regulators. However, Staff Attorney Steve Widerman said while presenting the final rule to the board that the NCUA discovered a trend in discrepancies between state and federal CAMEL ratings and felt that to protect the share insurance fund it needed the new power. The troubled condition designation allows regulators greater supervisory powers, including the ability to approve changes in volunteers or executive managers, and is triggered when a credit union's CAMEL rating slips from 3 to 4.

The proposed rule, when introduced in July, generated criticism from trade organizations concerned it meant the dual chartering system would take a hit. In particular, NASCUS, which represents state regulators, was most concerned about what the move meant for state regulatory authority.