North Carolina State Employees’ Credit Union (SECU) is choosing to go “where no credit union has gone before” --- requesting a one-year trial disclosure of its CAMEL code. The CAMEL rating system is used by the North Carolina Credit Union Division – and by most other federal and state financial regulators – as a method of evaluating the overall health of a state-chartered credit union. SECU sought this one-year trial disclosure in an effort to test a new standard for full transparency. As a large financial institution with more than $10 billion in assets, SECU falls into a size category among financial institutions of which greater disclosure and compliance is and should be expected. This trial disclosure of CAMEL rating transparency is yet another way for the $23 billion dollar credit union to demonstrate its “Do the Right Thing” philosophy to its 1.7 million member-owners.
The CAMEL rating system is based upon five critical elements of a credit union’s operations --- Capital adequacy, Asset quality, Management, Earnings, and Liquidity/asset liability management. Examiners rate credit unions using a numeric scale of 1 to 5 for each of these components, along with an overall composite rating for the credit union with 1 as the highest rating and 5 as the lowest. CAMEL ratings are confidential figures and not generally published by regulatory agencies. SECU obtained authorization from the Administrator of the North Carolina Credit Union Division to include its composite CAMEL rating of 2 for the period ending September 30, 2010 in a footnote within the Credit Union’s June 30, 2011 Audit Report. The unqualified audit opinion rendered by the CPA firm of Clifton Gunderson is available on SECU’s website (www.ncsecu.org). The CAMEL 2 composite rating has been typical for SECU over the last ten years.
Mike Lord, SECU Senior Vice President of Finance, comments “State Employees’ Credit Union is identified by its member-owners as a trusted provider of financial services. At a time when so many other large financial institutions in the marketplace are not viewed as trustworthy, SECU wants to uphold its positive reputation through full transparency. While there are no existing regulatory requirements for safety/soundness rating disclosure, SECU believes that, as a member-owned cooperative, it is always best to keep Credit Union members apprised of the overall level of financial performance of their Credit Union. We welcome the opportunity to test the value of disclosure of this rating with our members. SECU has traditionally published its ‘capital rating’ each year, and we feel the CAMEL rating may provide additional useful information. SECU remains ‘well-capitalized’ – the highest category – under federal law.”