Mellin offers improvements to NCUA appeals process

6inNCUA B EUROMASTRIn a recent comment letter to NCUA, New York Credit Union Association President/CEO William J. Mellin suggested additional improvements the agency should make to its appeals process.

In his letter, Mellin said that a pair of proposals put forth by NCUA would greatly enhance the agency’s appellate process for credit unions. However, Mellin urged the agency to go further.

“These proposals are a step in the right direction,” he wrote. “The requirements outlined in this letter would maximize the benefits of a more robust appeals process for both NCUA and credit unions.”

Notably, Mellin raised concerns with a proposed regulation that would allow NCUA to request input from state regulators on appeals involving state-chartered credit unions.

“The final regulation should mandate not only that NCUA seek the input of state regulators, but also that state regulators be given the opportunity to submit written comments on the record of appeal,” he said. “…In addition, the newly reconstituted Supervisory Review Committee should include at least one representative of state credit union supervisors.”

He went on to write that the agency should open prompt corrective actions up to the appellate process, explaining that PCA determinations are highly fact-sensitive and can have a dramatic impact on a credit union.

Under the proposal, credit unions would not be allowed to appeal composite scores of one or two, or a component score, unless it results in a “significant adverse effect on the nature and level of supervisory oversight of a federally insured credit union.” Mellin called that approach “misguided,” noting that the FDIC has no such restriction.

He also offered up a number of technical changes before concluding: “A well-functioning appellate process will not only give individual credit unions the ability to seek independent redress, but it will also provide a body of written decisions that can be used to foster uniform and consistent application of NCUA’s regulations.”

To view the comment letter, visit the Association’s website.

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