I am still bothered by the fact that neither NCUA nor the California Department of Financial Institutions pursued a formal enforcement action against Telesis Community CU of Chatsworth, California.
I went back to Telesis Community's Material Loss Review and found that the credit unions had a composite CAMEL rating of 4 as early as September 2007. Credit unions with CAMEL ratings of 4 or 5 are designated as problem credit unions.
How is it that a credit union with a CAMEL 4 rating never entered into a formal enforcement order with its regulator?
Even when Telesis Community became a CAMEL 5 in June 2011, no formal agreement was issued. And this is not the only case.
If you look at other Material Loss Reviews for failed credit unions, you will see that same pattern. A credit union becomes a supervisory concern several years before it fails, but the agency never pursues a formal enforcement order; but rather followed informal actions.
The NCUA and the California Department of Business Oversight (to which to DFI was absorbed into) can still make this right. There isn't a more clear-cut poster child for the IG to go after.
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