Magazine article American Banker

NCUA Board Member Assails Its New Ratings, Southwest Probe

Magazine article American Banker

NCUA Board Member Assails Its New Ratings, Southwest Probe

Article excerpt

It's becoming customary for credit union officials to gripe about their regulator when they gather, but it's still unusual for a regulator to complain about his own agency.

That's what Robert Swan, a director of the National Credit Union Administration, did this month when the Texas Credit Union League held its annual convention here.

Among Mr. Swan's targets were the NCUA's new rating system and its investigation of Southwest Corporate Federal Credit Union.

Mr. Swan, himself a former credit union manager, criticized the agency's new Camel rating system for including a section for service to members. "The new Camel section gives examiners too much leeway in decision making," Mr. Swan said. He then told the 1,500 credit union officials attending the meeting to complain to the agency if they felt the new system wasn't working.

Mr. Swan also took shots at the agency's extensive investigation into Dallas-based Southwest Corporate. The probe was triggered by the corporate's acquisition of the Texas league's check processing facility. Some charged that the deal wasn't an arm's-length transaction because both institutions share management.

"I don't feel like there's a hell of a lot to it and I don't think you should be concerned," he said.

The agency has used the example of Southwest Corporate to justify the rule it approved last year to split shared management between corporates and trade groups, a rule Mr. Swan opposed.

The Credit Union National Association has sued the agency over the rule, something that has caused a handful of credit unions to cancel their membership. …

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