"How did Mr. Hayes ever arrive at SECU as CEO in the first place?" So, you've watched the documentary "Inside Job" for context on the 2008 Great Recession and understand that "insiders" got a "Get out of Jail Free" card. And as a result, you also now know that the collapse of Corporate credit unions cost SECU and other credit unions @ $6 billion to bail them out.
✅ Next, you need to know that although there were 27 different corporate credit unions at the time of the 2008 collapse, almost all of the $6 billion loss was eventually attributed to just one corporate - Wescorp. Lets take a look at Wescorp, see if you recognize any patterns which look familiar:
✅ Western Corporate Federal Credit Union (WesCorp) History - WesCorp began operations in 1969 as the California Central Credit Union, the nation‘s first federally chartered central credit union organized to serve California credit unions and credit union service organizations (CUSOs). The field of membership was expanded in 1975 to include all credit unions and CUSOs in the then-NCUA Region VI, becoming the nation‘s first regional corporate.
Prior to obtaining a national field of membership (FOM) in 1999, the FOM included federal and state-chartered credit unions in Alaska, Arizona, California, Hawaii, Idaho, Montana, Nevada, Oregon, Washington and territories of Guam and American Samoa. In 1998 and 2003, mergers were accomplished with Idaho and Pacific corporates.
As the result of the credit market dislocation in mid 2007, WesCorp‘s ability to rely on member deposits to fund liquidity needs became dependent on increased National Credit Union Share Insurance Fund (NCUSIF) guarantees. Furthermore, experts retained by NCUA determined there were credit losses in the WesCorp portfolio that were reasonably likely to be sustained at slightly over $6.5 billion.
The NCUA Board considered a number of possible actions regarding how to best address WesCorp‘s problems, but determined there were no remaining viable alternatives other than placing WesCorp into conservatorship and placed it into conservatorship on March 20, 2009. At the time of conservatorship, WesCorp was the largest of the retail corporate credit unions, with nearly $25 billion in assets and servicing more than 1,000 credit unions.
❗ [Abandoned one state focus, expanded field of membership, regional footprint, national footprint, open field of membership, mergers, risky investment ventures... sound vaguely familiar?]❗
✅ Prior to the liquidation (bankruptcy) of Wescorp. Mr. Jim Hayes had spent the prior 10 years of his career in senior level management and regulatory positions at... yep, you guessed it - WESCORP! Imagine that!
...really how can y'all continue to smile about this?
❓In evaluating CEO candidates, was the Board of Directors aware of Jim Hayes's time as CFO at Wescorp when it went into receivership?
✅ The investigation included conversations with regulators and others with first-hand knowledge of the Wescorp receivership and related litigation. Through those conversations, it was clear that Mr. Hayes had nothing to do with the issues that put Wescorp into receivership.
... you hired someone who - as a senior leader - did nothing at Wescorp for ten years? What are y'all smoking?!
Isn't it the job for the CFO to monitor those portfolio's?
ReplyDeleteI think he was named after that had already started. Doesn’t mean he wasn’t aware though!!!!
DeleteDoublecheck me with the articles but what I read was he was an NCUA Examiner. He was working for NCUA inside Wescorp for several years prior to becoming an employee of Wescorp. One said he was onsite at Wescorp, why didn't NCUA catch the activity before all those credit unions lost their millions? So if James Hayes was innocent of misdoing, that is one thing.
DeleteHowever, that would mean he didn't catch the wrong dealings and the activities at Wescorp while working as an NCUA Examiner or as their Chief Financial Officer? He didn't successfully do either job. Wescorp Failure costs SECU millions. And we have some SECU Board Members who were actively serving on the Board during this time period and still on our Board today. Wescorp Failure wasn't a bump in the road without media coverage.
Mean while the culture club favorite Emma Hayes just receive another award for doing nothing. That’s a great gig, doing nothing getting paid big bucks and fly around the country. Check her LinkedIn.
ReplyDeletethen those conversations must have consisted of hello followed by good bye ... they will never tell the truth about what was said. Don't listen to what they say watch what they do, and we have just witnessed over the last 18 months what they were doing and their intentions are becoming clearer. My guess is "they" feel they did enough to start the process, so lets just pass the baton and keep running.... prove me wrong...
DeleteMaybe she was just out networking - job seeking on the member's money. Probably be the most value for the bucks she's spent since her arrival.
Delete"This board" is either clueless or wants to make SECU into a regional, corporate credit union in the image of Westcorp. Or, both.
ReplyDeleteThis isn’t even possible. I think you misread or didn’t understand when he explained the different types/roles of CU’s.
DeleteI'm curious why the Board hasn't taken a photo with all of them present. That seems weird to me.
ReplyDeleteIt took a worldwide economic meltdown for Westcorp to have 6.5 billion in losses. Under Hayes, SECU bled out close to 3 billion. He's getting better over time!
ReplyDeleteJust thinking about how many areas of the credit union is going to need an overhaul. I don't think there is one single department or area the Hayes Executive Team didn't screw up.
DeleteLeigh Brady= head of Hayes exec team. Has anything changed? Same old arrogant "this Board" doing same old Arrogant stuff? "who do these peons think they are?" replacing "people helping people" They'll be calling the membership "deplorables" before you know it
DeleteThe irony of "this Board" putting out a statement about new CEO Brady being a veteran after 18 months of them treating the legacy staff like garbage and ignoring their emails.
ReplyDeleteIt's a plus to be a veteran now! 10 days ago, we needed new blood. They're having a hard time keeping their story straight. But, don't forget to mention she's a woman and how historic that is. Here's my feeling about that (as a woman)...show, don't tell. This here woman is not impressed so far.
great observation ....
DeleteExcellent thoughts. Veteran employees were treated like total crap. They were given zero respect. Shameful treatment. No way to make amends for that.
DeleteThis here woman is also unimpressed.
DeleteThey hired a PR firm to handle this. With member's money.
DeleteSomeone made a comment the other day about what they called a mean spirited comment they saw on the blog. I asked was it meaner than sending many legacy employees home prematurely either by being shown the door or by them being asked to lower their standards to stay & they could not compromise? Was it meaner than having to tell a member we have always helped you before, but we can't help you now because of policy changes? Was it meaner than working 10, 20, 30 years to prepare yourself for that next promotion only to find a new hire got the job, just because they were from outside SECU? Most SECU employees do take ownership of their jobs, respect one another, appreciate what we have and put our members first. For 10, 20, 30 and 40 years, most employees when asked about their job would reply, I love my job at SECU and am so happy to be here. Were those words still in your head over these past 20 months? Mr. Blaine made a comment regarding this blog and this moment in time at SECU. "This is no fun - but it has to be done."
DeleteThis Board placed the future of SECU at stake by their decisions. Truth hurts, sometimes nice words don't get the point across, all this is not personal - it's just business. But there is a difference, this business on this blog was for fighting for SECU and to maintain the principles of what this credit union has always stood for: serving the members with honesty and integrity. We can't take unnecessary risks with the members' money. Each and every employee has a responsibility to help safeguard SECU. We are paid to do the right thing for our Members and we are honored to serve them.
Bravo!!
Delete100% agree 10:36 AM
DeleteIsn't changing election procedures on the very last day it could be done, and making the procedure so onerous and difficult that it is practically impossible for the membership to vote the current folks off this Board about as mean spirited and despotic as a board who is representing a co-operative ...whew! that is quite a run on sentence! anyway, This Board wins the mean spirited award!!
Delete@10:36 can I get a mic drop please!
DeleteBTW sent the documentary "Inside Job" to friends and family to educate them a little on what is going on... Thanks!
ReplyDeleteMike Lord, Steve Herrell and Warren Peacock
ReplyDeleteHayes' treatment of Herrell was shameful.
DeleteDon't single out Herrell. there is quite a long list-- Chris Ayer ( no not THAT one, the wonderful IT one!) Warren Peacock, Mike Banks and many more. and Where was Ms Leigh Brady? Holding the door...
DeleteHayes couldn't stand competence and knowledge--real expertise. Made him look shallow
DeleteJust hearing all these names, brings back that feeling of SECU Pride in my heart. Leaders who left their mark on our credit union and on us.
Delete+ Mike Banks.
DeleteExcellent replacement choices for This Board. Impossible for This Board to keep them off the ballot without further diminishing the limited credibility they have left. I'm sure the three of them could find 15 hours a month in the busy schedules.
"We are volunteers who often spend 15 or more hours a month in meetings, discussions, and research on SECU matters. "
What did they do to him? Unfamiliar with that.
DeleteWhat happened with Herrell?
Delete15 hours a month wasn't enough for this board to stay up to speed. Wonder what on earth they were researching? pay scales? how to get legislature to change law to allow them to be paid? Sure wasn't how to maintain SECU ? That's all they needed to do-- a well run machine before Hayes, Leigh and "this Board". sure seemed like Leigh was running things while Hayes was writing emails and gadding about...
DeleteI never got an answer to which executive punched the table back on May 15th post? Any executive that bullied “legacy employees” needs to go. The disrespect for loyalty is feeding this toxic workplace!
ReplyDeleteThat sums up almost every EVP, AEVP and SVP hired during the Haze Days…
DeleteWhat the heck was this Board thinking? If they did their due diligence why would they hire this guy and if they didn't why didn't they? Makes no sense unless you assume they were hugely incompetent. I wonder what Russell Reynolds' role as the headhunter was in this fiasco? Makes you wonder about them as well.The quality of applicants both internal and external had to have been stunning for the second largest credit union in the country and they end up with Hayes. Are you kidding me?? Who paid who off?
ReplyDeleteI know that they absolutely had at least one internal application that was stunning. A person of the people with both the moral compass and intelligence to do the job. External applications were less stunning than you might think because SECU is not a place where you get rich. CEOs as a group tend to really like getting rich. The CEO salary range for a for-profit company the same size as SECU is undoubtedly substantially higher than what SECU was offering at the time. Therefore, only certain types of external applicants (those with baggage and/or climbers looking for a stepping stone to bigger and better things) were interested.
DeleteConsidering ourselves ignorant and for the sake of argument, let's assume Hayes was really green behind the ears back then and Wescorp pulled the wool over his eyes. Once Wescorp failed, being the brain box that he is, wouldn't he have connected the dots as to the whys and hows, ESPECIALLY when he was included in the lawsuit and NCUA had to bail him out and give him the lifeline?
ReplyDeleteHaving said that, if it was anyone else, especially an honorable and upstanding citizen like him (he and and the board claim so), they would have sworn an oath saying they would never get caught in Wescorp kind of circumstances EVER again.
But all he did in the past 20 months was start implementing the same steps that started the whole Wescorp disaster or debacle or whatever you want to call it.
If what Hayes and the board were trying to accomplish can in NO way be compared to what happened at Wescorp, the board could have easily done a contrast analysis and proved their innocence. Instead the board's haughty, obstinate and long email supporting Hayes was meaningless, and vehemently claimed he was handpicked because he was innocent. NOTHING MORE. Instead the email could have been short and sweet providing the analysis and easily said make your OWN conclusion. Just like the humble and short email they sent telling everyone about his departure and replacement. Why did a group of 11 intelligent board members not do that?
And what is the rush in appointing the next president right away? They could have named Brady as an interim president for a smooth transition and taken their time to do a due diligence in filling up the position. Especially when they just burnt their fingers with the whole Hayes fiasco? Shouldn't they have taken the time to study ALL eligible candidates and did an indepth scrutiny on each and every one of them and picked the best among them?
For all that I know Brady could be a really really smart lady and she could be the best choice. But what's the rush? Why is that no one else has been given the chance ONCE AGAIN?
WHAT did the board learn from the past 20 months of turmoil? And they expect the members and employees to believe them once more? WHY? I haven't heard any convincing explanation.
Excellent points. Are you an employee? This is exactly the kind of thinking we need from our board.
DeleteSomeone in those positions should have detailed knowledge of the organization’s financial situation. I’m in none of those positions and I still have to understand how we operate, invest, and how stable we are because I get that question from members and it’s important I can explain it to them.
ReplyDeleteAs for Wescorp, he can’t claim innocence or ignorance, only incompetence. We spent nearly 2 years suffering the consequences of his and “this board”s incompetence while I’ve watched staff burn out in real time. We won’t be digging out of this easily.
Members matter. Employees matter. We can’t assign different value classes to either and be doing the right thing. I can’t help feeling our hard working call center people have become Tier E employees. SECU needs all of us to deliver for our members.
Make no mistake, the only Tier E employees are the branch folks!
DeleteRespectfully disagree. Yes, branches have been struggling but we have all been impacted. MSS has been completely upended with drastic scheduling changes. Refer back to comments on several prior posts.
Delete12;13 AM &
ReplyDelete12:13 AM & 6:52 AM
ReplyDeleteAgree with both.
Guess 12:13 AM was just a hypothetical thinking to say if he's as innocent as he claims then all the "more" compelling reason that SECU should only have prospered and not lost. You have been burnt already. Why would you put your hands in the fire again? Like a commenter a while ago said if he was only doing the board's bidding and that was unethical,hr could have raised the alarm and he would have had almost 3 million members and 8000 employees on his side. Why didn't that happen? He has no trouble touting his wares with selfies to all the employees all the time, but not this? No one is buying that. Think the commenter was just saying there's "no" way for this guy to ease out of the monstrosity he created in just 20 months.
6:52 AM
Completely agree. You can't be a Risk Inspector, CFO, President and whatever else, without any knowledge of the ins & outs and dos & donts. You definitely have the knowledge. If non-financial employees can understand the basics, breathing the financial air every day of his life, he "can't" claim ignorance and deny responsibility.