Today, Credit Union Times reported that Jim Blaine, president/CEO of the $25 billion State Employees’ Credit Union (SECU), said he doesn’t know why the NCUA questions his Raleigh, N.C., credit union’s safety and soundness.
The NCUA Office of Inspector General said in a report released Tuesday that NCUA Region III Director Herb Yolles wrote in a July 14, 2010 letter to Jerrie Jay, administrator of the North Carolina Credit Union Division, “SECU is not considered safe and sound at this time.”
All references to safety and soundness were redacted in the OIG’s report, but the information was revealed when the Credit Union Times copied and pasted text from the released PDF document to a Word file.
Yolles’ statement led to a heated discussion during a Sept. 19 meeting with NCUA administrators and the full SECU board in which Yolles said Jay had announced that the NCUA had begun the process of terminating NCUSIF insurance for the nation’s second-largest credit union.
The OIG’s investigation centered around whether or not Yolles lied about what Jay said during the meeting, a complaint Blaine had made against the agency. However, the revelation that the NCUA questions SECU’s safety and soundness may be the bigger issue to credit unions that support the NCUA’s share insurance fund.
According to the Credit Union Times story, “Blaine said the issue is an example of why exam reform is needed, and NCUA examiners should cite support for exam mandates. SECU manages its capital around 7%, and has done so through the financial crisis, he said.”
To read the full Credit Union Times story check out Friday’s Weekly Exchange.