Wednesday, June 28, 2023

SECU New Culture/New Direction - A Question Of Trust, Part 6

http://www.dailypublic.com/sites/default/files/2016/Sep/it-cant-happen-here.jpg


  Baseline. Prior to September, 2021, SECU had an uninterrupted 85-year record of growth in assets and membership, un-besmirched by sanction or scandal.

Timeline.  ­čö║September, 2021 - "New/New" arrives at SECU. ­čö║2022 - Chaos Ensues. ­čö║October, 2022 - Annual meeting resolution ­čö║November/December, 2022 - Fireside Chats ­čö║LGFCU Merger - Ayers/Naylor­čö║January, 2023 Ad Campaign/SuperBowl­čö║February, 2023 Financials - Soaring Budget/Delinquency/Headcount ­čö║March, 2023 - RBL/SEANC ­čö║April, 2023 - H.410 ­čö║June, 2023 CEO Exit ­čö║July, 2023  New Election Procedures/"Facilitator"

­čöć In 1935 Sinclair Lewis published "It Can't Happen Here", a send up of the growing dangers of anti-democratic movements in Europe - particularly in Germany and Italy - and addressed the question of how such governance can seep into and takeover an organization or social system. Of course who has read that book lately and who cares about what happened in the 1930/1940's? That's so "last century"!

For the "sum it up in 15 seconds" world of 2023, here's the synopsis of "It Can't Happen Here": ..."that home‐grown hypocrisy leads to a nice brand of home‐grown authoritarianism."

 ­čöć A fellow named Chip Filson writes a blog on the credit union industry [link: Chip Filson - Just a Member]. If you're into credentials, Mr. Filson was a top regulatory leader at NCUA, founded and led the #1 credit union think-tank in the U.S. for a quarter of century, a data wonk, a convinced credit union advocate, president of his class at Harvard, a Rhodes Scholar, and a "sings in the choir" Presbyterian - well, you know the type. Someone you might listen to...here are some excerpts from a recent post on credit unions [blue = my inserts]:

✅ "One of the challenges both reporters and credit union members confront is that credit unions easily fly under the radar of the press, both local and mainstream, business and general media. Only scandal seems to attract coverage. The result is that credit unions' evolving roles and diverse business efforts are largely unknown to the mainstream public.

You may be familiar from mutual and cooperative models (where required disclosures and/or stock price check and balance do not exist) in other sectors of the economy, that the member-owner governance process is easily gamed.  There is no ongoing oversight of institutional performance.

Many credit unions today are becoming "private companies" where owners have no role except to be customers. There are no disclosures of basic financial goals or performance, as required of public companies. Yet they wheel and deal with abandon in purchasing banks and creating mergers of large well-capitalized, long serving credit unions without any member benefit.

The outcome is that some CEO’s [and Boards] are fulfilling their business ambitions without checks and balances. One of the most glaring recent examples of self-dealing is the addition of “change of control” clauses to CEO contracts. Remember credit unions are mutuals, there is no “change of control” in the market sense of that term.  All subsequent changes such as mergers, are CEO [or Board] self- initiated.  But consultants keep recommending them as “standard business practice” [the infamous "industry standards" at SECU] when advising on CEO contracts.

This morning [January 1, 2023!] the $1.1 billion Vermont State Employees [NCSECU's peer in Vermont], after eight decades, went out of business. I wrote multiple articles about its fate and the member opposition. This merger pattern is being replicated over and over across the country.   Most examples of self-enrichment are not disclosed.  In one case where it was, a credit union with 16% capital, the CEO literally took $10 million of the members’ equity and transferred it to a private, newly incorporated “non profit” under the control of the CEO and Chair, chartered the month prior to the merger.   It later converted to a private foundation so there is no disclosure compared to a public foundation in IRS 990’s. The members’ money.

One way to view the current SECU [don't panic (yet!) he's talking about VSECU!] controversy is the lack of transparency to the owners about these fundamental business changes.   A meaningful governance process seems to be absent.  These changes were believed to be the sole prerogative of the CEO with board concurrence. 

Sadly, I think this is the practice in the vast majority of credit unions.  Democracy is dormant.  Boards today are self-perpetuating. "

 

..."home-grown hypocrisy".... It Can't Happen Here! ...well, ...

 


32 comments:

  1. follow the money....

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  2. We CANNOT let the Board get away with this. SECU is too important to its 2.7 million members, its 7500 employees and the state of North Carolina. Until the last 22 months it was a beacon of light and hope in a financial industry that lives with constant black eyes, "inside jobs" and stealing from regular folks to make the rich richer. We must keep fighting and pulling back the curtain on the malfeasance and lies propagated by This Board.

    I know you did not envision this fight Mr. Blaine but thank you for leading us.

    #GiveUsOurCreditUnionBack

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    1. @11.33 I could not agree with you more. We must not let our members and employees down. SECU culture, trust, honesty and dependability is WAY too important for us to just lie down and take this crap! Please, Mr. Blaine, help us navigate this mess! Thank you for being who you’ve always been. It’s a question of trust and we trust you. Definitely do not trust this board.

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  3. I heard the new bankers call our members "customers" many times over the last year.

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    1. it's their mentality, it's who they are ...

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  4. So like are all branch employees’ jobs on the line? Like any second now we could be fired?

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  5. A cooperative business is owned, controlled, and run by and for their members for the mutual benefit of the membership. Truth and Accountability are required. They are also the first to go in the slide to authoritarianism. Quickly replaced by propaganda.

    SECU is clumsily asserting their propaganda through their "we are secu" tour and fireside chats. They are well on their way!

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  6. As a member-owner is it possible to get the contracts disclosed? All contracts these days are flying under the radar of confidentiality and proprietary data terms/clauses. But it is us members who are funding these contracts. As an owner I should be able to see where my money goes.

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  7. Secu just hired a survivor relations specialist. What the heck is that position??

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    1. Position helps members (or their families) deal with estate and account settlement issues when members pass away.

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    2. That will be just another Specialist who is never available when the member needs them.

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    3. must be another way to fleece the flock. They ain't doing this outta the kindness of their heart.

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    4. Actually, they are. Doesn’t generate revenue. Intended to assist members’ families who are going through one of most difficult aspects of life to deal with — let alone by themselves with no assistance. Banks don’t provide this service. SECU does.

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    5. We provide that service at the branches already. Our members don’t want to talk to someone in Raleigh whom they don’t know.
      Does the new employee have expertise in this area?

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    6. Part of the drive to centralize everything and make branches and branch employees irrelevant. Nothing local about the New/new run from the top down. It is NOT about member service.

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    7. might not generate revenue directly but what about having that person move their money to SECU so" they" (you know those folks) can invest in mortgage backed securities ... somethings don't always appear as they seem ... and yes Trust Services already offered that service in-house (local branch).

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    8. The statement "DOESN'T GENERATE REVENUE" says it all about the new/new credit union and its continuing decline. That commenter is obviously a newbie and doesn't even know they don't "get it". Just more clueless pro-revenue anti-member bankerspeak.

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    9. Long term employee. Simply trying to counter the narrative in the comments that this service has anything other than altruistic intentions. Won’t make that mistake on here again. Hope everyone has a nice day. Geez.

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    10. ? Will the Member who has $5000.00 in their account get this same speciality service as the person who has $50,000.00 or $500,000.00? We do not need to be playing with our members anytime but during their times of grief- that's the lowest.

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    11. "Long term employee. Simply trying to counter the narrative in the comments that this service has anything other than altruistic intentions."
      That is what we ALL would hope; however, their track record of late suggests otherwise.

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  8. In wnc and heard an secu radio commercial yesterday. I had never heard one before. Why would secu need to lay out $ for radio air time?

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  9. Industry standard

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  10. Are we STILL waiting to hear about the nominating committee that was to be named by no later than June 12 according to the new rules set by "this board"?

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    1. The six nominating committee members are : Mona Moon, Chair, Chris Ayer, Bob Brinson, Ben McLawhorn, Mark Fleming - all current members of the Board - and Jim Johnson a former Board member.

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    2. How would the members know without you?

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  11. somebody's been a cheating and a lying...

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  12. It is a takeover. No doubt.

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  13. Does any know what was said by Mama Mia and the Culture Club recently at a meeting? Heard it was pretty nasty.

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    1. tell me when it hasn't been .... it's who they are ...

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  14. they are going to do it their way and they will fail .... now will there be any repercussions? Not in the society we live in just watch "Inside Job" ...

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  15. I’m thinking we need the assistance of SEANC to get signatures to replace this board.

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  16. The new folks don't understand the "There is a difference" motto (they're bankers at heart)... but the BOD! ... that is what is disappointing .... because they SHOULD know and if not they lied to get on the board and now they are cheating the membership.
    again somebody's been cheating and a lying...

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