Tuesday, October 3, 2023

Now For The Hard Part - The Real, Core Problems At SECU Which Must Be Faced...


 https://ninaamir.com/wp-content/uploads/2015/06/26236870_s.jpg This isn't getting easier is it...

For the last several months, three key issues have taken a back seat to the nomination/election process: 1) SECU Board governance changes - the New Election Procedures (4-11-2023) 2) the "middle of the night" 6-30-2023 SECU Bylaw changes and 3) H410 (remember that little piece of legislation!?) which remains stalled in the NC Senate.
Annual elections aside, if there are longer term problems with how SECU is governed by the Board and how SECU, as a cooperative, should be democratically-controlled by the member-owners; then these two areas need to be "fixed".  You and I can't keep doing this stuff every year - right?
Over the last 2 months Jean Blaine and I have attempted to work with the N.C. Credit Union Division to address the issues of illegal governance at SECU. You can read about those initial efforts on the blog in the following posts [link to 7/27 post], [link to 7/28 post], [link to 8/9 post]. Those efforts have failed to produce results. 
On Friday, September 29, 2023, Jean and I appeared before the N.C. Credit Union Commission to request their assistance and made the following public comment. I'll stop there...  but, would welcome your comments, questions, and feedback. 

North Carolina Credit Union Commission Meeting
Raleigh, NC
September 29, 2023

To: N.C. Credit Union Commission
Ref: N.C. Credit Union Division Required Enforcement of SECU Bylaws

I. Synopsis:
1. A controversy has developed over the effectiveness of the SECU Board of
Directors over the last two years.
2. SECU members - concerned with the strategic direction, decline in financial performance, and deteriorating quality of services – presented a resolution at the 2022 Annual Membership Meeting requesting an explanation from the SECU Board of Directors.
3. As a result of the continuing membership controversy the SECU Board of
Directors announced new “Election Policies and Procedures “ on 4-11-2023.
4. On 6-27-2023 the SECU Board of Directors approved bylaw amendments
designed to restrict SECU membership participation at the 2023 Annual
Membership Meeting and to threaten fundamental, material credit union
member rights. Announced to membership on 7-20-2023.
5. SECU members approached the N.C. Credit Union Division on 7-25-2023
expressing concerns with the clear violations of the SECU bylaws and the
suppression of SECU members’ democratic participation and ownership
6. The SECU members refused to file a “complaint” against SECU, as their
concerns were with the lack of enforcement by the N.C. Credit Union Division
of the SECU bylaws.
7. The concerned SECU members never received a copy of any “complaint” and assumed the N.C. Credit Union Division was pursuing its investigation of the bylaw violations.
8. On August 28, 2023,the SECU members received an answer “Re: Your Complaint ...” from SECU denying any error.
9. On September 18, 2023, the SECU members received an unsigned letter from the N.C. Credit Union Division stating “we are closing “ your complaint” and find “no apparent violation of law or rule under our authority by SECU” – no further explanation was provided.
10. 60 days after approaching the N.C. Credit Union Division - represented by the N. C. Attorney General’s Office - with a time sensitive issue important to over 2.5 million North Carolina citizens; we appear before you today to request your review and reconsideration.
11. Our concerns have increased.

II. The Commission’s Authority under North Carolina law:

“The Credit Union Commission is vested with full power and authority to review, approve, or modify any action taken by the Administrator of Credit Unions in the exercise of all powers, duties, and functions vested by law in or exercised by the Administrator of Credit Unions under the credit union laws of this State.”

III. The three issues:
Ms. Kristina Ray, Administrator of North Carolina Credit Unions
July 25, 2023 (5:26 PM)
Dear Ms. Ray,
We would like to thank you for the time and courtesy you and Ms. Badwan gave to us today to discuss several issues which have arisen with SECU. The three issues were 1) the monthly publication of financial statements, 2) the serious non-conformity of the new Election Procedures with the SECU bylaws, and 3) the inconsistency with North Carolina laws of the SECU bylaw changes recently approved by your predecessor.
These issues if not addressed immediately by the Credit Union Division will risk accentuating a growing concern and mistrust among SECU members over the leadership of SECU by the existing Board and management. A crisis of confidence in the Credit Union poses a substantial safety and soundness issue, which should be avoided at all cost. We do not need an unwarranted Silicon Valley Bank-type event in North Carolina.
You asked us to file a complaint, which we will not do. These issues are not personal complaints by a member vs a credit union. All three issues are regulatory matters which require your intervention. It is not the duty of the membership to assure that SECU abides by N.C. State Statutes, Credit Union Division rules and regulations, and CU Division approved SECU bylaws. That is your duty.
We suggested several remedies and actions,which could help ameliorate, in the short term, all three issues quietly and we would be open to further discussions with you to resolve these issues permanently and hopefully amicably.
As we discussed, the Credit Union Division has the ability to address and resolve these issues "informally" with SECU, which hopefully you will pursue. A formal complaint and investigation will serve little public purpose and you may well trigger that crisis of confidence which harms all members and all of North Carolina.
Look forward to hearing from you this week on how you intend to address these critical matters. As with a house on fire, the consequences are certain if you do not act quickly.
Thank you again for your responsiveness. Enjoyed meeting you both.
Jean and Jim Blaine                                     -2-

IV. The Nature of Bylaws –NCCUD/"Federal Parity”

(From NCUA rules & regs)) - The FCU Bylaws address a broad range of matters concerning a credit union’s organization and governance, the relationship of the credit union to its members, and the procedures and rules a credit union follows.
As a legal matter, a federal credit union’s bylaws must conform to, and cannot be inconsistent with, any provision of its charter, the Federal Credit Union Act, the NCUA’s regulations, or other laws or regulations applicable to the credit union’s operations.
The NCUA will not generally take action against minor or technical violations, but emphasizes that it retains discretion to enforce the FCU Bylaws in appropriate cases, such as safety and soundness concerns or threats to fundamental, material credit union member rights.
The N.C. Credit Union Division is required by state law to approve all bylaw amendments for state chartered credit unions – and to monitor and enforce compliance.

V. The New Election Procedures Issue
The bylaws of SECU prescribe only two requirements for an SECU member to
be qualified to serve as a board member: 1) 18 years old, and 2) willing to serve – period.
The new SECU Election Procedures approved (without NCCUD review) prescribe the following requirements for an SECU member to be eligible:
“4. Nominations Process. ...The Nominating Committee must confirm that nominees are (i) eligible to hold a director position (member of the Credit Union, aged 18 years or older, and having the necessary skills and capabilities), and (ii) agreeable to having their name placed in nomination, and (iii) willing and able to serve, if elected.”
“6. Self- nominations. Self-nominations may be made only by those who sought, but did not receive, nomination by the Nominating Committee.” These two provisions are in violation of the SECU bylaws – period. And, illegally exclude qualified SECU members from seeking a board seat.


Example of actual denial/illegality:

 Q) "Ms. Funderburk,
Would you please send me a copy of the official self-nominating petition as I'm considering submitting my name as a candidate for an SECU board seat? Thank you in advance for your assistance."
A) ... "Since you did not submit a completed Candidate Package before the deadline for the current year, you will not be eligible for nomination by the Nominating Committee or for self- nomination this year. Your interest in serving on the Board of State Employees’ Credit Union is appreciated, and I hope you will reach out in 2024 and submit a completed Candidate Package for consideration. Thank you [Board Corporate Secretary]"

VI. The 6/30/2023 SECU bylaws amendments issue

(From the SECU Board) "Notice is hereby given of an amendment to the bylaws of State Employees’ Credit Union. On June 27, 2023, the Board of Directors of State Employees’ Credit Union duly adopted  the resolutions set forth below amending the bylaws of the organization. The Administrator of the North Carolina Credit Union Division approved the bylaw amendments on June 30, 2023.
“WHEREAS, the board of directors (the “Board”) of State Employees’ Credit Union,  North Carolina credit union (the “Credit Union”), has determined that it is in the best interests of the Credit Union to amend the bylaws of the Credit Union (the “Bylaws”) to (i) clarify that a member retains membership if the member leaves the field of membership, (ii) clarify that an annual meeting may be held in a virtual or remote format and to provide examples of such virtual or remote format options; (iii) authorize the Board to establish upon notice to the membership policies and procedures governing the order of business, format and conduct of the annual meeting...

Here’s how the SECU Board manipulated what you approved:

The published SECU 2023 Annual Meeting Agenda:


1) Call to Order/Confirmation of Quorum/Polls Open
2) Approval of 2022 Annual Meeting Minutes
3) Recognition of Board members and current and retired SECU employees
4) Report of the Chair & Bylaws Update
5) Report of CliftonLarsonAllen
6) Report of Nominating Committee
7) Report of SECU Foundation
8) Report of the President and CEO
9) Voting Concludes
10) Member Feedback Forum
11) Election Results
12) Adjournment

NCUA standard bylaws: Items of business for annual meeting and rules of order for annual and special meetings. The suggested order of business at annual meetings of members is—
(a) Ascertain that a quorum is present.
(b) Reading and approval or correction of the minutes of the last meeting.
(c) Report of directors, if there is one. For credit unions participating in the Community Development Revolving Loan Program, the directors must report on the credit union’s progress on providing needed community services, if required by NCUA Regulations.
(d) Report of the financial officer or the chief management official.
(e) Report of the credit committee, if there is one.
(f) Report of the supervisory committee, as required by Section 115 of the Act.
(g) Unfinished business.
(h) New business other than elections.

(i) Elections, as required by Section 111 of the Act.
(j) Adjournment.
(k) To the extent consistent with these bylaws, the board will conduct all meetings of the members according to ____. The order of business for the annual meeting may vary from the suggested order, provided it includes all required items and complies with the rules of procedure adopted by the credit union.


VII. The Issue of H410
Did the Credit Union Commission vote to endorse H410?
Does the Commission intend to support H410 in the short session?

VIII. For Your Consideration
Can a North Carolina credit union exclude by policy or procedure a qualified member from seeking to run for the board of directors? In disregard of the credit union’s bylaws?
Can a North Carolina credit union eliminate the ability for member-owners to democratically participate in the Annual Meeting by eliminating standard rules of order and agenda items such as “Old Business” and “New Business” and prohibiting “substantive” motions from the membership – “threatening fundamental, material member rights”?

IX. The SECU Annual Membership Meeting will be held on October 10, 2023

We would ask that a copy of these comments be included as part of the minutes and public record of this Commission Meeting.

Thank you,
Jean and Jim Blaine
North Carolina citizens
SECU loyal members


... let's hope the NC Credit Union Commission will not duck this week.


  1. The members have a fundemental right to petition their grievances ...
    what we have is a 'crisis of control'.
    This board doesn't feel it has to follow the law but only to their whims ... guess we'll see if they're right ...

  2. Yes. This is certainly the hard part! I hope you will break down into smaller pieces for us.Understand this is the comment you made to the Credit Union Commission in hopes that some action might be taken by some enforcer of credit union law . Ms Ray has certainly not demonstrated any desire to take action. Seems that everyone wants too sit on their hands and say it's not their problem. They have to wait 60 days--except of course Rose Connor, approving the bylaw changes on her way out the door, changes which were NOT brought to the attention of the membership before hand and completely change the annual meeting!!!?? Why is this board allowed to act with such impunity? Seems this board is above the law and the rules and bylaws that are supposed to inform their behavior. If they don't like it, this board just changes it. May next week bring some changes!

  3. Reading The Assembly article on SECU a quote by one of this board stood out. "The year’s meeting will have an hour-long public comment period, Wooten said, but no “free for all.”" Implying that The Resolution last year was a "free for all"? Looks like this board really really doesn't like to have anyone pose a question about anything that they do or decide. This board believes it can do a 180 and that no one should question them. So they have outlawed questions by sneaking changes into the bylaws. No wonder this board has had to hire so many lawyers. It takes a lot of lawyers to circumvent the law

    1. A quick replay of the 2022 Annual Meeting would discredit Mr. Wooten's comment regarding free for all - and possibly serve to discredit many other things This Board has said. I guess in all the confusion They have caused down at our credit union, They forget there are videos, emails and conversations that are now a part of SECU history.

    2. A bunch of Red-faced Board of Directors do not a Free for All make. Try again Mr. Wooten or better yet - tell us the truth. Why did This Board seek to destroy SECU? And why did you waste over Six Million Dollars of credit union money on that bad CEO purchase?

    3. Yes you stated exactly what I was thinking ...
      They now feel they don't have to defend their actions or statements... just the norm nowadays!

  4. An unsigned letter from the NC Credit Union Division??? How appropriate! But they didn't have any problems signing off on those midnight hour bylaw changes back on June 27th?
    Sounds fair and equal.