Been focusing on the more than critical SECU Board election over the last few weeks.
But, if you needed any confirmation of why a change is sorely needed at SECU, it came yesterday in the form of a 5 page memo to "All Employees" from the CEO, Leigh Brady. The memo noted the content as "...reflections on benefits, deposits, earnings, expenses, and services" [You can obtain a copy at your branch!]
So let's take a look at those "reflections":
- "SECU has enhanced employee benefits by $32.9 million over the last 2 years" especially in the areas of paid time off (PTO), bereavement and parental leave. That's wonderful, every little bit helps these days! But, with a 6 to 7% inflation rate (12% to 14% over two years), well, let's hope there is more to the story than that.... 'cause it's hard to pay the cashier at Food Lion with PTO.
- "SECU's net income is strong"- that's absolutely true! But, it is being achieved by depriving retirees and other members of a fair rate on their savings. The "new/new corporate" SECU declares a win, while the 2.7 million SECU member savers lose. Please stop and vote! https://secuvote.ey.com/
- "We will be working to move our deposit rates up." Admirable message, but just like the easy to ridicule SECU Strategic Plan - leadership is always thin on specifics, like when and how...and why not right now if the ""new/ new CU" had record earnings in 2023? Might suggest that while the CU is "working on it", members will continue to "work on" moving that $16 billion earning 1% or less to other institutions paying 4 and 5%. Loyalty does have its limits.
- "We are balancing the need to pay higher deposit rates at the same time we are experiencing increased delinquency rates". SECU enjoyed one of the lowest loan loss rates in the credit union industry over the first 85 years. Over the last 2 years delinquency and charge-offs have soared. SECU employees know much of that increase was the result of a disastrous Board decision to centralize collections (now reversed). Wildly costly and being "paid for" - as the CEO notes - by SECU savers through low rates . This is another innovation from the SECU Board called "risk-based savings" (RBS) which, like risk-based lending (RBL), makes members who aren't the cause of the loss pay for it anyway. https://secuvote.ey.com/
- "We should all pay particular attention to our expenses at SECU". Certainly a great idea for any business! It should be pointed out, however, that most employees don't have the ability to affect the overall cost of operating SECU - that falls to executive management and the SECU Board. Don't try to blame and off-load this problem on "All Employees" - that's not right.
- This "All Employees" memo seeks to imply that SECU operating expenses are neither soaring nor out of line by historical standards. Simply not true. Expenses are increasing every quarter. Prior to the last 2 years, the historical SECU operating budget expense has been @ 1.91% of assets . The annual cost of operating SECU is @ +$235 million higher than historical levels (2.35% vs 1.91%). Operating expenses up +24%, assets down - 8% over the last 2 years - how long can those trends continue? https://secuvote.ey.com/
7. "Do we have higher than normal expense ratios at SECU? No. " - Well, in the worst sort of way CEO Brady is telling the truth on this one! That's true if you want SECU to be "Industry Standard"! SECU members have enjoyed one of the lowest operating costs around over the first 85 years - much, much less than "industry standard"!. Low operating costs mean more money stays in the members' pockets through lower loan rates or is returned to members through higher savings rates. When operating costs climb by 24% and loan losses soar the members - that means you! - lose. The last two years have been a "loser" for 2.7 million SECU members. https://secuvote.ey.com/
8. "More or less". - CEO Brady kinda wraps things up [Do drop by your branch and ask for a copy!] with this: "More or less" has to mean EVERYONE helping to make sure SECU continues to offer the best service and to be the best credit union in our state. "It's not my job" is not an option". Sounds good, but on behalf of the rank and file employees of SECU (and the SECU membership!) - we did not cause the problems created over the last 2 years at SECU! Who did Ms. Brady? https://secuvote.ey.com/
... an honest, "mea culpa" memo to "All employees" (and the SECU membership!) from "this Board" might help turn things around. [Right, I won't hold my breath...]