DENVER-What started as a standard conference speech by NCUA Chairman Debbie Matz turned into a sharp verbal exchange with State Employees CU CEO Jim Blaine last week over still-unresolved issues regarding oversight of state-chartered CUs in North Carolina.
Matz was speaking at the NASCUS Summit here and during the Q&A, Blaine, who heads the second largest credit union in the U.S., asserted NCUA has "preempted" North Carolina state regulator Jerrie Jay "for reasons that are false." Blaine told Matz credit unions in North Carolina want an apology.
"NCUA has impugned our state regulator unjustly, as confirmed by the NCUA's own OIG," Blaine declared. "We can either have a fight to the death, or NCUA can apologize and we can move on."
Matz said she would not respond to "threats," adding, "I have said all I am going to say about the matter."
"Thank you for your transparency, Ms. Matz," Blaine said.
The flare-up stems from a Sept. 26, 2011 decision by the North Carolina Credit Union Division to allow SECU to publicly disclose its state CAMEL rating. Blaine told Credit Union Journal it was a beta test to determine if such a disclosure would assure the public of SECU's safety and soundness.
"We wanted transparency," Blaine said. "State charters get two CAMEL ratings, state and federal. We released our state CAMEL rating, which is allowed."
The move led to NCUA announcing that effective Jan. 1, 2012, it would conduct independent annual insurance reviews of all state-chartered CUs in North Carolina, would no longer provide the NCCUD with computers or training, and would directly process all Call Reports from state charters.
In a letter NCUA said it was doing so because: 1. The release of the state CAMEL rating violated NCUA Rules and Regulations; 2. At a joint conference with the SECU Board Jay announced NCUA had initiated the process of termination of NCUSIF insurance of SECU share accounts; and, 3. Jay "leaked" to Blaine "confidential examination documents."
Blaine's response: "We are allowed to release our state CAMEL rating, and the NCUA's own OIG confirmed Nos. 2 and 3 did not happen. There was no 'leak,' which is an inflammatory word. It is standard protocol for the NCUA to send a draft report to credit unions-we got it from NCUA."
According to Blaine, credit unions in North Carolina remain very upset with NCUA regarding its actions toward Jay and the NCCUD. He shared a copy of a July 23, 2012, letter written by the North Carolina CU League to Matz requesting a meeting Aug. 14, 15, 21, 22 or 23, which Blaine said was ignored.