Why So Long?

According to the Material Loss Review (MLR) on Telesis Community Credit Union, the credit union was first identified as a problem institution in September 2007. At that time, its CAMEL composite rating was downgraded to "4". A credit union with a CAMEL 4 rating is designated as a problem institution.

In December 2006, Telesis Community Credit Union had a CAMEL composite rating of "2".

According to a colleague who was a former bank regulator, you usually don't see a two notch downgrade. So, the CAMEL "2" rating was probably a dirty two or alternatively there was a material decline in the credit union's performance.

However, it was not until June 2010 that Telesis Community was subject to a Letter of Understanding and Agreement.

This period of more than 2 1/2 years between first receiving a CAMEL 4 rating and the formal enforcement action seems like a long time.

So, why did it take so long to issue a Letter of Understanding and Agreement to Telesis Community Credit Union?

That is the question that credit union officials, policymakers and the media should be asking credit union regulators.