OAK HARBOR, Ohio-NCUA has rejected Commodore Perry FCU's appeal to the agency's Supervisory Review Committee.

CPFCU appealed its latest examination results, specifically its CAMEL rating, to NCUA claiming the rating is "retaliatory" (Credit Union Journal, Oct. 29).

Yesterday Commodore Perry received the news via an 11-page document sent from NCUA via overnight mail.

"Unfortunately it comes as no surprise that the SRC has toed the company line and rejected our appeal," said Commodore Perry President Thomas Renz. "While we have not yet had time to completely analyze the results of our appeal, we can see that a number of the findings are simply factually incorrect. This result has further demonstrated how broken the examination and appeals process is and how important it is for our industry to push for change."

Previously, Renz pointed out that the CU provided 1,000 pages of documentation to support its appeal and had presented its case as "clearly and objectively" as it could. "We will have significantly more to say about this going forward. But we must finish analyzing the document first," said Renz.

After learning the SRC's ruling via a note from Renz, Paul Mercer, president of the Ohio CU League, commented on NCUA's appeal process, saying, the effectiveness of the process is a "matter of perspective. It functions well if intended to affirm the infallibility of NCUA's work. For credit unions seeking balance and fairness, the process falls short. Undoubtedly, there are greater concerns among credit unions about NCUA-a budget process lacking restraint, prescriptive supervision, and undermining of the state system. However, the absence of a meaningful appeal process is a serious vulnerability for all. NCUA's promotion of the virtues of the current process will not cause change. Understanding this, the Ohio League will focus on gaining support for the Financial Institutions Examination Fairness Act (S. 2160/HR. 3431)."

Commodore Perry first appealed to the regional office in Atlanta this summer, and received back a "boilerplate" letter stating the appeal had been rejected, it said. It then appealed to the SRC and also sent another letter to the regional office seeking an explanation for why the regional director rejected the original appeal.

But what Renz had said really troubled him is that the $33-million CU had to prove the regional director's determinations were erroneous, a much more difficult task. Yesterday, Commodore Perry reported, the SRC unanimously affirmed the regional director's original determination, that the examiner's findings were correct.

In a previous report (Credit Union Journal, Oct. 8), Renz shared concern over the track record of CUs utilizing NCUA's appeals process. NCUA said from January 2002 to June 2012, 48 CUs filed appeals with their regional offices, with 13 obtaining favorable rulings. Four of the appeals-now five, including Commodore Perry-reached NCUA's Supervisory Review Committee, and none obtained a favorable ruling.

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