"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?!