Commodore Perry FCU President Thomas Renz says the reason the$32 million credit union filed an exam appeal – an accusation thatan NCUA examiner retaliated against the credit union in the form ofa riskier CAMEL score – has been lost in the appeals process.

And according to an experienced credit union attorney, he'sright.

Rather than prove the exam was inaccurate or that the examinerretaliated, Renz said he has been instead been told the smallcredit union in Oak Harbor, Ohio, must prove Regional Director HerbYolles' reasoning was erroneous when he denied the originalappeal.

Renz said when Yolles denied the appeal, he did not considerCPFCU's documentation that disproves the 2011 exam findings.

{ The story line:

• Oct. 26, 2012 Commodore Perry Appeal Set for Nov.7
• Oct. 25, 2012 CPFCU Prez, Attorney Say Appeals Process Dodges RealIssue
• Oct. 25, 2012 Appeals Panel Can Toss Commodore Perry ExamFindings
• Oct. 24, 2012 Ohio CU Left Wondering How to Prep forAppeal
• Oct. 11, 2012 NCUA Stands by Examiner in HarassmentAppeal
• Oct. 9, 2012 NCUA Buys Time in Commodore PerryAppeal
• Oct. 4, 2012 Commodore Perry FCU Says Documentation ProvesClaims
• Oct. 3, 2012 Ohio CU Says NCUA Examiner Harassed,Retaliated }

Bruce Jolly of the Oakton, Va., law firm of Reed & JollyPLLC, said as he understands the appeals process, the NCUAcorrectly stated CPFCU's burden of proof. He said according to theAdministrative Procedures Act, the credit union must convince theSupervisory Review Committee that Yolles abused his discretion whenhe denied the appeal.

“The whole controversy around the examiner's approach andattitude, it literally isn't on the table,” Jolly said. “But,that's exactly the way the exam appeal process is set up.”

Jolly said the question facing the SRC isn't whether or notYolles reviewed the credit union's evidence, or if he would havechanged his mind had he reviewed it. Instead, the committee willdecide whether or not Yolles had enough evidence to arrive at hisdecision, and whether or not he abused the appeals process when hedenied CPFCU's appeal.

“They certainly have the right to argue that (Yolles) couldn'thave made the right decision because they have all this evidence hedidn't review,” he said.

CPFCU claims its examiner retaliated by reporting inaccurateexam findings that unfairly lowered the credit union's CAMEL scorebecause management complained to the NCUA that the examinersexually harassed and bullied CPFCU employees.

The complaint was immediately forwarded per NCUA rules to theregulator's Office of Inspector General, and the OIG's officeimmediately investigated the complaint, interviewing the examinerbefore CPFCU's exam was complete.

The OIG backed up the examiner, saying Oct. 4 it did not findevidence of retaliation.

Jolly said he's never heard of an examiner engaging in the typeof harassing behavior the credit union claims, but added that hehas no reason to believe it couldn't have happened.

“Whether it's a bank, thrift or credit union, examiners have theupper hand in those meetings, and it's an important time forcompetent legal representation because it changes the dynamic,” hesaid.

Regardless of the outcome, Jolly said by taking its appeal tothe SRC, “the credit union has helped shine a light on an entireset of processes that a credit union encounters when it confrontswhat it considers to be a bad exam.”

The SRC's three committee members include Chairman Joy Lee,former director of supervision and currently the senior FFIECadvisor to Chairman Debbie Matz, trial attorney Gerard Poliquin anda program officer Judy Graham. They are scheduled to hear CPFCU'sappeal the week of Nov. 5, pending agreement by both parties on anexact date and time.