Data received by Hill as the result of a Freedom of Information Act request showed that during the study's 2002-2012 period 140 regional office appeals were filed by individual credit unions. Of that number, 65 contacts were made for CAMEL composite or component ratings, 47 pertained to Documents of Resolution, 20 related to examiner or examination findings, and the rest dealt with other issues.

The study indicated that in spite of the low rate of credit union success at the regional office contact level, there were very few appeals filed with the NCUA's Supervisory Review Committee. In fact, the committee issued only six decisions during the period covered by the study. In each of those cases, the committee upheld the examiner decisions.

NCUA Public Affairs Specialist John Fairbanks blamed the low numbers on the NCUA's process, which allows credit unions to appeal examination findings through formal and informal channels. 

"The process encourages resolution of problems between credit unions and examiners, believing that direct communication can often resolve issues or at least clarify points of disagreement. The process, if necessary, continues through the supervisory examiner, the regional director, the Supervisory Review Committee and ultimately to the NCUA Board," he wrote in an emailed statement.

Read more: Study critical of the NCUA's informal resolution process …

Hill was critical of the NCUA's appeals process compared to other regulators; in particular, the regulator's push to solve disputes informally and less consultation with outside experts compared to other regulators.

"Perhaps the most novel part of NCUA's appeals process is the scope of appealable determinations," Hill wrote in assessing the agency's range compared to other regulators measured. "On the one hand, the NCUA's scope of appealable matters is narrow. On the other hand, in some respects, the scope of appealable matters is quite broad."

On the narrow side, credit unions can only appeal composite CAMEL ratings of 3, 4 and 5 and not individual category ratings at those levels. On the broad side, the Supervisory Review Committee can review loan classifications if the appealing credit unions consider those classifications significant, the study noted.

Moreover, the credit unions' right to appeal didn't end by imposition of either an informal or formal enforcement action, but the credit union must comply with the action while an appeal is pending. Further, a reversal of the MSD would not necessarily terminate the enforcement action, the study said.

Hill had two specific recommendations for NCUA, the foremost of which dealt with the one-year terms and revolving-door policy of the agency's Supervisory Review Committee.

"First, (the) NCUA should put people on the committee as a long-term assignment," Hill said. "Changing committee members every year will not result in consistent decision-making."

"Second, the agency needs to releases their opinions to the public," she added. "If credit unions knew there were only six appeals versus bunches of appeals for other regulators, they would demand change in the process."

Fairbanks said the NCUA is unable to comply with that suggestion.

"(The) NCUA works to provide a process that is efficient, effective and transparent; however, it should be stressed the appeal process includes confidential information relating to the credit union and to supervision, which precludes its public release," he wrote in an emailed statement. "As a matter of discretion, NCUA releases types of information where the public has a strong interest in the explanation of agency policy and deliberative process, if the interests served by disclosure outweigh other relevant interests. (The) NCUA has made such releases on occasion (under the Freedom of Information Act)."

Read more about the study and response from two credit unions that navigated an NCUA appeal in the Oct. 8 issue of Credit Union Times.