SECU Is Trashing Its Reputaion For Fairness And Endangering the Finacial Health Of Members With Risk-Based Lending...

😎 Here's a little personal, real-life example of how the SECU Board has thrown the membership to the wolves, by using FICO credit scores to slam member-borrowers with higher loan rates unjustly...

   ... uh-oh! 

                          What did I do?

 May 27, 2024:  Dear JAMES BLAINE,

We've detected a change in your FICO^® Score. Your score has decreased -69 points.

Your FICO^® Score can increase if you:

• Pay your bills on time - [Always have!]
  
• Use less credit than you have available - [Always do!]
  
• Keep your credit accounts open and in good standing - [Always have!]
  

Your FICO^® Score can decrease if you:

• Miss monthly payments - [Never have!]
  
• Max out your credit accounts - [Never do!]
  
• Apply for new credit such as a credit card or a loan - [Haven't done that either!]
  

What's next?
Log in to MyCredit Guide to see your new FICO^®  [Here's what it shows!] 

 

A -69 point drop in a member's credit score can have a substantial impact on the rate SECU borrowers are (over)-charged under risk-based lending. That sort of drop can take a member from the A-tier ("best rate") to the C-tier (worst rate) in the blink of an eye! And no one at SECU wants to hear you whining about "this is crazy" - and of course, any sort of appeal to reason and fairness, through the member Loan Review Committees is long gone!

And, if it's an error on the credit report? Well of course that's your problem, not theirs. It's your responsibility to fix it ! As mentioned above: "That's crazy"! 

SECU's risk-based, race-based lending based on a FICO credit score is "arbitrary and capricious" (be sure to look up that phrase as it relates to discrimination!) - and simply unjust.

😎 "The We" don't really care what you say anymore "no excuses"! 

At SECU these days, you are your score - no less, no more!

 

 

SECUs Continued Loan Mispricing: Has Brought Tiers To Members' Eyes...

  ... as their pocketbooks are picked!

The SECU Board and the "Executive Leadership Team ("The ELT") keep trying to make excuses for the growing lending fiasco at SECU. Their "spin" is becoming a spiral... direction downward.

There are few missteps the Board and ELT have not made in their erratic pursuit of risk-based lending (RBL).  Reminds you of that story of the rube crossing a cow pasture, jumping from cow pie to cow pie because he had seen some ("industry standard") sign in town which said: "Keep Off the Grass"! 

The Board and ELT, with the latest retreat to 3-tiers, appear to realize they've stepped in a mess - soaring delinquency and charge offs; but lack the necessary leadership depth to admit it - and fix it. Perhaps the Board and ELT hope the members won't notice the mounting muck created by their pie-hopping... suspect that's wishful thinking. Members have taken notice that there is "something in the air" at SECU these days... 

But let's look at the real, actual, hard dollar financial damage to many SECU members from RBL :  

✅ Financing a $25,000 used car for 60 months at SECU:

Under the "new" 2024 3-tier  RBL system: Lowest rate ("A"-tier) = 7.00%; Highest rate ("C"-tier) = 9.00%.

Under the "old" 2023 5-tier RBL system: Lowest rate ("A"-tier) = 6.75%  Highest rate ("E"-tier) = 13.25%.

✅ Here's the rub: In 2023 at 13.25%, under the 5-tier RBL, SECU borrowers in the higher tiers were unfairly being overcharged as much as $3,000 more in interest over the term of their auto loan. A $3,000 overcharge is not just a "rounding error" for most SECU members!

👉 Comparing the new 3-tier "C" rate with the 5-tier "E" rate appears to be "better" - if you believe discriminating less against the majority of SECU borrowers is "better" than discriminating more! (Is that really "better"?)

✅ So, what should the SECU Board and ELT do about the now acknowledged overcharge and unfair pricing under the 5-tier RBL system in 2023? Well, a good start would be to simply lower the rate on all the existing C, D, E loans to 9.00% going forward. The loans are all identified on the computer system and it is easy to do. For all members in aggregate, this would represent a savings of tens of millions of dollars in future interest costs!

😎 The Board and ELT often warble - when correcting their mistakes - about "acting in good faith".  Why not, in good faith, take this member-positive step?

 

... rather than just leaping to the next pie?