To: SECU Board of Directors
Dear Chairman Ayers,
You've put about recently that risk-based lending will improve the loan rates of 68% of active and retired state employees. Believe the quote from the BusinessNC story was: "...Ayers says 68% of current and retired state employees "would have qualified for better interest rates if tier-based lending were in place." (First just for clarification, did you mean at SECU or at Bank of America?)
Mr. Ayers what has been most frustrating to more and more of your doubters is what follows in the next sentence of the BusinessNC article: "The credit union did not respond to a request for additional information on Ayers' estimate."
Mr. Ayers if you're right - why won't you "show your work"? - to the rest of your fellow member-owners? Is that too much to ask of the SECU Board?
BASIC MATH 101:
But here's some basic math that may help you improve your success in the loan area, since I hope you will agree that having higher loan rates than folks like Bank of America isn't going to do much for your balance sheet - nor the reputation of SECU.
1) Mr. Ayers you have $14 billion of member deposits sitting in investments earning 1.33%! (at 12/31/2022).
2) Let the members borrow that $14 billion - it is their own money you know - at a flat rate of 4.33% (all tiers) - which will truly be the best rate around for all members - and may help improve your reputation too!
3) The basic math is if you increase your earnings from 1.33% on those investments to 4.33% in member loans, your income will increase by $420 million ($14 billion x 3% = $420 million) - and every member wins! Hey, now that really sounds like a credit union way of thinking!
4) Hate to mention it, but you probably need to use that extra $420 million to increase your savings rates - you do know you've got a growing (actually shrinking!) problem over there too, don't you?
AS EASY AS 1-2-3 !