...trying to move it faster!
Quick summary again: ✅ 1) 2008 U.S. financial collapse - working folks get clobbered, guilty parties and regulators go free; ✅ 2) Corporate credit unions collapse costing CUs $6 billion; ✅ 3) An expansionist, open membership $26 billion Wescorp is the cause for most of the $6 billion loss: ✅ 4) Federal regulator NCUA closes bankrupt Wescorp; ✅ NCUA Inspector General faults Wescorp management and Board; ✅ SECU Board implies NCUA endorsed their CEO choice...
Let's take a look at what Mr. Hayes says about his professional career on LinkedIn:
Now, let's parse it a little...
✅ Worked at the federal credit union regulator NCUA for 6 years as a "Caiptal Market Specialist".
- What exactly is a "capital market specialist" (CMS) ? - Well, according to NCUA [link]...
- Provide expert advice to NCUA regional staff on credit union balance sheet risk.
- Handle difficult and complex investment and asset liability management issues.
- Develop solutions and timelines for resolving high risk conditions.
✅ Worked as Senior VP, Business Development and Marketing at Wescorp - A couple of observations: 1) Senior VP would indicate that Mr. Hayes was not just another "worker bee" at Wescorp, would it?; 2) Do you see anything in the resume which qualifies Mr. Hayes for this senior position? (Marketing?!); 3) Note that Mr. Hayes indicates that a major part of his senior position was "ALM". That stands for "asset liability management"...y'know managing those complex Wescorp investment and balance sheet risks - which bankrupted Wescorp 5 years later!; 4) Remember from "Inside Job" that the best way to co-opt regulators was to hire them!; 5) Which job do you think pays more - a federal government CMS job at NCUA or a Senior Vice President, Business Development and Marketing job at an "on the make" Wescorp? (Give you 3 guesses!)
✅ Worked as Wescorp SVP, CFO starting in April, 2008 - The SECU Board would lead you to believe (recheck last week's "our full support" statement for Mr. Hayes again) that the NCUA "retained" (after a "national search"?!!?) Mr. Hayes to straighten out the mess at Wescorp! NCUA actually didn't conserve (take over) Wescorp until April, 2009, a year after he took the CFO job and 6 years after he entered the senior management ranks at Wescorp!
Do you think Mr Hayes was the salvation of Wescorp, as the SECU Board infers, or a senior part of the problem? (Give you 3 guesses!)
... please quit smiling, it's so insulting to the staff and membership!
... Hey, hard to imagine... but it gets worse...stay tuned! 
So if I'm reading and understanding these last few posts correctly, Jim Hayes was employed by NCUA from 2000-2003. but he went to work everyday at Wescorp as a CMS to make sure that Wescorp wasn't doing risky business with other Credit unions money. He was an examiner in residence? Right so far?
ReplyDeleteThen Wescorp hired him away from NCUA to be a marketing specialist? Is that when they began expanding? And while being a marketing specialist, he continued to do Asset Liability Management? Correct to assume that is overseeing the investments Wescorp made with other Credit Unions money?
Then he got the job as Chief Financial Officer? This isn't making sense. How could he not know? This is really sounding like the credit union version of INSIDE JOB. He's NCUA's in house examiner, then he is appointed by NCUA after Wescorp goes into receivership as CEO?? Looks like NCUA is taking care of Hayes. How did he get another job after NCSECU? How did he get ajob after Wescorp? In a credit union?!
ReplyDeleteyou got the fox running the hen house ... what could go wrong?
ReplyDeleteboy if this was tried in a court of law ....... and you had a fair judge ...
ReplyDeleteAnd prior to NCUA, he was in public accounting for 1 yr 11 mos. Back then, if you couldn't get your CPA license (it's pretty hard to do) within 2 years, you were let go.
ReplyDeleteUpon arriving at OUR credit union, he allowed the hiring of numerous "leaders" in finance that also do not hold CPAs, because that's not important. I guess they learn by failing audits instead of being competent.
Was Haze let go by the board or did he just decide to leave on his own? Did they tell him it’s time to look elsewhere ?
ReplyDeleteGiven the abrupt and unceremonious way his resignation and replacement were announced, I think he was told to look for something else, and then jumped shortly before he was pushed.
DeleteRegardless of whether their intentions were honorable or not, the board had to get rid of him because he was creating too much bad press and drawing attention to things they didn't want people seeing. Most employees and members probably didn't feel the need to take time looking over the financial reports in detail until Hayes came along. Now many of them are doing just that.
In an ironic sort of way, his tenure galvanized many stakeholders to engage with their credit union in a way they never had before. I guess you don't realize what you've got til it's gone.
This had to be in the works way before the board released the famous Haze backing email… to land another CEO job, it didn’t happen overnight.
DeleteThis is only tangentially related, but since I have nowhere else to discuss it, does anyone know what's happening with construction loans?
ReplyDeleteOne of the first things Hayes did in 2021 was "pause" the construction loan program while they "revamp it". It has been almost two years and haven't heard anything about it. No mention of it on the website. I feel like I'm the only person that remembers SECU used to offer that service.
Why did they kill it?
Haze dazed… does anyone really know?!
DeleteI was under the impression that they were having a hard time getting our construction loan program to work with MortgageBot, hence why they were still using OMNI up to the very end?
DeleteGreat question and I hope it gets addressed. It’s a service our members need.
DeleteCan't get our product to work with MortgageBot. Can't get NICE to understand the contact center schedules. What's the answer? Screw the people and keep the vendor.
DeleteIt’s upsetting to know that Gym Haze came along and pushed out all these legacy employees. Just think of Mike Banks, Jamie Applequist, Warren Peacock to name a few. All gone because of Gym and his decisions. And who did we get? Some bozo who doesn’t even live in North Carolina! Bring them back and send Benesh and the Culture department packing!
ReplyDeleteAdmiration and respect go to the SECU board members who voted against.
ReplyDeleteAnother interesting item to note is Hazy keeps circling the credit union world and is not stepping out of it. For someone who keeps asserting he is real smart, why not get into the banking world for a change? He can get a lot more money, spotlight and attention.
ReplyDeleteMore competition, oversight, supervision, share holders to account to, etc.? Gymmy boy sure knows how to swim beneath the currents and survive.
He sure does. He came in and surrounded himself by yes men (and maybe even a few con men) in all of his new hires. Then, they did the same, hiring yes men under them. Poof, you have 1,100 new hires.
DeleteFrom the Harvard Law School Forum on Corporate Governance
ReplyDelete"In our paper titled Bank Boards: What Has Changed Since the Financial Crisis, we investigate how board oversight of U.S. banks has improved since the 2008 financial crisis. In particular, we compare the progress of the following four key deficiencies between 97 U.S. banks and 1,297 nonbanks before and after the crisis covering the years 2007-2015:
1) Group think among bank board members. To measure progress on reducing group think, we examine whether banks have appointed (i) new directors to the board, and (ii) board members with diverse backgrounds…
2) Absence of prior banking experience of board members. Turning to banking experience, we find no evidence that directors appointed to bank boards after the crisis have more relevant financial industry experience or better track record of successful leadership…
3) Inability of board members, especially of the chairperson, to devote time to understanding the bank’s business model…
4) Inadequate emphasis on risk management…"
Source: https://corpgov.law.harvard.edu/2019/02/19/bank-boards-what-has-changed-since-the-financial-crisis/
Yep, that about sums up the last 18 months. Emphasis on GROUP THINK! Add a hiring balloon to that and then you have some turbo-powered GROUP THINK.
follow the money, folks don't do these things without financial reward
ReplyDeleteThe analysis here has been enlightening and I hope people take it to heart so we can avoid this kind of mistake in our future.
ReplyDeleteI hope “this board” realizes how foolish and devastating their actions have been to SECU and the ripple effect that spread through all of our organization and to our members. And now, here we are, stuck with all these outside people in high level positions that have no understanding of who we are and why it means so much to us and our members. I can’t name a single positive impact of all this LEAD and misleading employee survey and consultant mess, and believe me - I tried hard to find one. I’ve never seen an organization that understood better what real leadership meant that the SECU we had.
“This board” didn’t have any choice but to replace Hayes with a legacy employee. They have cost us our reputation with members and employees. Their egotistical foolishness and ignorance cost $3 billion in an organization that had never shown a loss. If that’s not failure with a capital F, tell me what is. Why is our executive group so very top heavy now, chock full of outsiders and all these brand new departments who can’t get their “stuff” together? How much did we have to pay these people to entice them away from the corporate world? “This board” needs to realize there is no return on that investment, just loss.
For SECU to recover, we have to do what we do - the right thing. Legacy employees don’t work here to get rich, we work here because we love what we do and feel fairly compensated for it (jury is still out with this pending salary review). Every single time I heard our legacy leaders speak, I felt inspired. THAT is how we win and succeed. THAT is why we didn’t need marketing. Our members did that for us because of what we were able to do for them. Contrast that with a LEAD summit where the message was “suck it up and get on board or get out and - hey open bar!” It was insulting.
Leigh is well positioned for a recovery here, but it’s going to be a tall order. I’m rooting for her because I’m rooting for us. She knows SECU, she knows us, she knows our REAL culture and if we can get the incompetence off the board, we can claw back our core values while making strategic improvements. We need our remaining legacy leaders with backbones back in positions of influence. The new/new has been an abject failure. Industry standard really just means average and we are better than that.
I'm glad you have such optimism. I don't see much hope for Leigh or "this Board". She may be a "legacy employee", but she has no moral courage. "This Board" sure seems committed to the New/new. We should know on Wednesday after "this Board" meets Tuesday night. The new/new election procedure should be voted out the door. Everyone of those 6 who voted for Jim Hayes should leave. A total, complete lack of fiduciary duty to hire that man for the job here-- those 7(6 board meembers and Jim Hayes) put a torch to everything NCSECU stood for for 85 years. There was total support for the reckless destruction of all the structures that were so carefully put in place by Jim Blaine and Mike Lord, Warren Peacock, Mike Banks, and thousands! of others. The concepts of local decision making, local jobs all across the state, doing everything to assist the people of modest means on the branch level wiped out in 18 months by shear pigheadedness and "we know what's best" arrogance of "This Board". The whole idea of open membership to anyone anywhere which shifts all the North Carolina dollars right on out of state. The very idea that "this Board" would invest in commercial mortgage backed securities who knows where or underwritten by who knows? "A rated",they claim--- What a joke! Never before has NCSECU dabbled in the securities market like that--led by an incompetent fool in investing!!
ReplyDeleteThe Six know who they are. Wave good-bye to SECU. Let the people who love and UNDERSTAND how complex, innovative and important it is to keep money in the pockets of the members to spend in their local communities, run the show.
Well put!
DeleteDon’t get me wrong - “this board” has to go. I largely agree with you. I don’t know that I have such great optimism, but this is what we have to work with and it can be done. I HOPE that it will. What I have the most of is faith that the tide is turning and there are a lot of us still left who understand what SECU means.
Delete