SECU's "New, Improved, Less Discriminatory": 3-Tiered Risk-Based Lending!...Baaaah, Baaaah...

        

                      "We're SECU!"

Always had a problem with risk-based lending at SECU for several reasons ... and as an SECU member, so should you.

• Too impersonal -  SECU members are treated as canon-fodder with little room for exceptions, nor for mercy - not what a credit union is about.
  
• There is no appeals process.
  
• Credit score lending is based on a false statistical model - correct at the "macro theory level", but unfair and abusive at the individual SECU member level.
• Pricing "for risk" substantially overcharges the vast majority of SECU members in the higher risk tiers, the majority of whom faithfully repay their SECU loans - always have!
• Risk-based pricing is an unnecessary subsidy for more affluent SECU members, who are also unnecessarily penalized by SECU's low savings rates.
• Charging regular SECU members higher loan rates - unjustly - increases the risk of loan default, discriminates on the base of age, race and gender, and has severely tarnished the reputation of SECU,

....but other than that I have few concerns about the practice.

  The threat which is now waiting to bite SECU - as a risk-based lender - on an indelicate part of its anatomy, is the concept of "disparate impact". 

Disparate impact is anything a lender does which unfairly discriminates against a "class" of borrowers - like "tiered" SECU members!  Whether intentional or not, if the lender - read SECU - is shown to have adversely penalized a class of borrowers; lawyers are going to make SECU cough up a whole lot of cash to make amends. 

😎  How do you know SECU is intentionally or unintentionally discriminating with RBL? Because the SECU Board and CEO just publicly confessed! How so? 

Well, SECU has now admitted that the 5-tier RBL system installed in 2023 did not work and overcharged SECU members. 

So now, "The We" have come up with the "new, improved" less unfair and less discriminatory 3-tier system!!

..."less unfair and less discriminatory"?... time to get out the snafu checkbook - once again?

Credit Union Mergers: The Final Solution?

      Credit unions are changing...

     ... and disappearing.  

Badin Employees Federal Credit Union used to be tucked up against the Uwharrie Mountains on the banks of the Yadkin River, about 40 miles east of Charlotte - the hometown of banking giants Bank of America,Wells Fargo and Truist.

The Uwharries are thought to be the oldest mountains in the U.S. These mountains are well-worn and rounded; the Rockies they ain't! Uwharrie is an old Indian word. It's a bit tricky to pronounce, much like La Jolla, Yakima, Albuquerque, and Butte. "Yew-whar-eee" is correct;  "you're hairy" is not. 

Been searching for years for the original Indian meaning of that name. Recently, a friend told me he knew the origin. He said, it's in the dictionary: "Uwharrie" means "unknown". Really? Asked him for a copy of that reference for my files. Sure enough, the following week, in came a copy of the dictionary definition. It said: "Uwharrie - adj., probably from an ancient tribal name; meaning unknown." Perhaps I just need to pick better friends....

Badin is a company town. In 1917, Alcoa dammed the Yadkin River to generate hydroelectric power for a new aluminum ingot plant. The lake and town which sprang from those efforts are quietly picturesque - but, all things revolved around the plant. Driving into town, down Falls Road, under an unwashed denim sky, is a journey home, a journey back in time The town is just two blocks long, but makes the most of it.
 

"Downtown" the candy-striped awnings and improvised handicap ramp of Badin Town Hall and Police Department adjoin the Masonic Lodge #637. Then comes the post office with its single window, fleet of post office boxes, and well-used community bulletin board.  Shading the post office is Memorial Park, flanked by a cedar tree honor guard for the seven Badin soldiers who died in World War II. And, out of sight up a short dirt road, is the best named roadhouse on the planet: The Bottom of the Barrel Disco and Cafe; now vacant, having recently burned to the ground.  Bet that last party was a great one. Sorry to have missed it! 

But, the center of attraction in town was the Badin Employees Federal Credit Union. The Credit Union was housed in a one story, red brick building with blue shuttered windows and a bright, "no-way-to-miss-it", burgundy door. The Credit Union always closed for lunch from 12:30 to 1:30 pm, but you could sneak a look into the office through the partially drawn, real-wood Venetian blinds. It was a comfortable, inviting looking place. The kind of place you could sit a while, have a cup of coffee, talk to the manager, y'know think it through a bit.

Badin Employees Federal Credit Union was prosperous with assets reaching $4 million, capital 18%, loans available to all, delinquency negligible. Everyone in town was a member; no local banks remained. Badin Employees FCU had achieved "market dominance" without ever spending a penny on "engagement, member experience, or passions of self-importance". The "word around town" took care of all that. Yep, folks in Badin had a strong opinion about their Credit Union. They were the kind of folks - as you might suspect - who didn't need "thought leaders", "X", or talk radio in order to form an opinion!

The beauty of Credit Unions used to be something you couldn't easily wrap, bottle, or "spin".   Badin FCU is no longer there to make a difference - gone the way of merger. There are no longer any banks or credit unions in Badin. The aluminum plant, too, is gone.

... are we getting close to the Bottom of the Barrel on a lot of important things in our Country, including credit unions?