✅ Collective punishment is often used as a disciplinary measure in institutions such as schools (punishing a whole class for the actions of one known or unknown pupil), military units, prisons, psychiatric facilities, etc. The logic underlying collective punishment is weak at best, but collective punishment is definitely effective in breeding distrust and resentment within groups.
Got it? Let's take a look at the use of collective punishment at SECU in connection with risk-based lending and how it affects the SECU membership - you and me.
✅ Fraud is an interesting word. Think we all know what it means, but just for a refresher: Fraud - wrongful or criminal deception intended to result in financial or personal gain. Pretty clear, right? Are we all together on what fraud means?
1)
When a loan officer makes a loan at SECU - whether it is in
the A, B, C, D, or E risk-based lending tier - that loan officer
expects that loan to be repaid. If a loan officer makes a loan which she
doesn't believe will be repaid, then that loan officer is committing
fraud. Easy enough, right? If you make a loan that you believe will not be repaid, you are committing fraud against SECU and its' members.
2) So, every loan made at SECU is a good loan when made by the loan officer. Every loan is expected to be repaid, that includes every A, B, C, D, and E loan made.
3) Despite the fact that every SECU loan is good when made - or else the loan officer committed fraud - the SECU Board has decided, by implementing risk-based lending, to charge 50+% of all SECU borrowers higher rates in the B, C, D, E risk tiers for that good loan they just made.
Why would the Credit Union overcharge an SECU borrower for a "good when made" loan? This unjustified, pre-profiling via RBL of "certain" SECU members is purposeful, reckless discrimination... and unwarranted collective punishment!
4) Why is overcharging 50+% of all SECU members collective punishment? Lets' look at an example. Loan losses at most financial institutions are highest on unsecured loans and credit cards. So, lets assume that 1 out of 10 SECU "E"- paper borrowers default on their "good when made" unsecured loan. That would be a very high 10% default rate! 1 out of 10 of those "E" borrowers in the example didn't pay - and yes, that's bad!
But, what is far worse is that the SECU Board fully supports overcharging - without justification - the entirely innocent 9 out of 10 SECU members who did faithfully repay their "E"- paper unsecured loans. "Good when made and now good when paid!" No question, 90% of these SECU borrowers were unfairly overcharged.
5) All the credit bureaus explicitly tell lenders - the SECU Board included - that credit scores can not and do not predict which individual SECU borrowers will default on a loan. Yet with RBL, the SECU Board has chosen to actively discriminate, collectively punish, and financially harm the majority of SECU borrowing members - in the B, C, D, E tiers.
6) If you and I were being incorrectly overcharged 90% of the time at the grocery store, at the gas station, at Walmart, Target, Lowe's, Cracker Barrel or Bojangles, we would be screaming FRAUD! ... and we would be justified in our outrage!
Why do the same rules of fairness no longer apply at SECU?
Next thing you know they will stop lending to e paper members altogether
ReplyDeleteYou are correct that credit scores don’t predict which individual borrowers will default on a loan. They represent the likelihood that a borrower will repay a loan as agreed. There is a cost to an organization when borrowers do not repay as agreed. That cost is priced into the loan via credit score when using risk based lending.
ReplyDeleteCredit scores don’t predict loan performance just like clouds don’t predict rain
DeleteReally love this logic.
DeleteAgree totally, the credit score as we saw predicted "rain" 100% of the time for the "E" group and everyone (100% of the borrowers) paid the punitive penalty interest rate because of that prediction.
But it only rained once - only one borrower didn't pay.. The credit score forecast was 90% wrong!
Thanks for making the case...credit scores are bogus predictors, period.
So in your view it is quite alright to overcharge 9 out of 10 SECU folks unfairly? Guess that's as long as it's not you...
ReplyDeleteKnow the type!
Every consumer is provided with the top three factors negatively impacting their credit score if they apply for a loan and their credit score is used. They can and should focus on improving their financial behaviors around those factors to improve their score. Increasing the likelihood of repaying debt as agreed over time will raise a credit score and lead to lower costs for the consumer and lender.
DeleteYou seem to miss the obvious, SECU incorrectly and unjustly overcharged 9 ot of 10 members. They were always innocent... You seem to think that is ok....pure arrogance and willful discrimination.
DeleteBoy does this sound like AI ...
DeleteSorry again, I was unfairly "profiling" you... but perhaps that wouldn't matter to you.?
DeleteSorry that was "profiling" you unfairly..
ReplyDeleteAnd THAT is why Risk Based Lending should never have been implemented at SECU. The unfairness to the overwhelming majority of members (who own the credit union by the way) is a fraud on a next level of magnitude. Arrogance and Lazy Lending.
ReplyDeleteDo they understand their members (clients in their language) are state employees for the most part?
ReplyDeleteSo are they saying that state workers are untrustworthy?
SECU should make all of its loans to the "E" highest RBL loan rate group. Sure the defaults might be higher. But...THEY CAN MAKE IT UP IN VOLUME! These directors are they stuck on stupid of did mama drop 'em on their head at birth? They be over charging on rate to 90% of the group. I smell a CLASS ACTION LAWSUIT. If the loan default and resulting losses are not commensurate with the higher loan rate - they I say the credit union is in deep poop trouble.
ReplyDeleteWhat’d we learn in elementary school when the teacher punished everyone by taking away recess because of one kid acting up in class one day? We learned to HATE that kid. And usually that kid was unsupported at home, hungry, or was not being taught coping skills. Just like this system, where the better off are being encouraged to look down their noses at those less fortunate. They “deserve” that rate, they should work on pulling themselves up by their bootstraps and getting a better credit score. Come off it people! People
ReplyDeleteHelping people. It’s is NOT “US” vs “THEM”
After approving the annual 1K bonus last year…they discontinued that this year and will not giving us a bonus. Wow. Slap in the face.
ReplyDelete"...most profitable year in history of SECU!" H-m-m-m...
DeleteWe could’ve paid our employees the bonuses if we wouldn’t have given 1 man alone 6 million dollars 🤮
ReplyDeleteOver worked staff was just informed they will not get the small $1000 bonus this year. I recall Leigh talking about how well the Credit Union did last year????
ReplyDeleteOnly if the CEO and BODs jobs were performance based 🤡
ReplyDeleteSome of these replies sounds like a script from a PR firm... just sayin
ReplyDeleteA large number of members have no idea what ABCDE "paper" means. Branch loan officers have not educated them on why they are getting the interest rate they are getting. They just trust they may be getting a better rate than a BANK because that's what we have always done - not anymore! I asked members in attendance at an Advisory meeting if they knew what ABCDE paper meant and only 2 out of 8 knew - the other 6 had no idea. I have a feeling Brady & Co do not want members to know. If they did our loan officers would be doing a much better job of educating our members when they apply for loans. So much for transparancy and disclosure!!!
ReplyDeleteNothing is worse for employee morale than giving a benefit only to take it away. Great job Leigh! Keep it up and next October won’t even be a close election.
ReplyDeleteWhy have our ratios been dropping? What's the real deal with that?
ReplyDeleteWhich ratios?
DeleteGuessing the person above is referring to the ROA’s outlined in the justification for no $1k bonus to employees in 2023.
DeleteAlso, we were told our income went up 23 million. Well, that is what I told my board members a couple weeks ago from the PowerPoint they gave us. So what is really going on?
DeleteSame here. It's in our assigned presentation this quartet. I talked about what kind of good shape we were in based off the slide. So it is confusing that something does not add up?
DeleteMake sure to print that email and give a copy of it to all your advisory board members.
DeleteRBL is hurting the members as a whole as well as the reputation of SECU. I've seen members that want to refinance their auto to lower their monthly burden in a time of soaring inflation and prices on goods, only to be told their interest rates would double, costing much more overall and saving little per month.
ReplyDeleteTalk about collective punishment…hurting employees by several dumb decisions by executive management and board …unprepared collections department …hiring of Jim $$$ Hayes to name a few. A big slap in the face for employees trying to pick up the pieces and only to get hit with this. “ More with less “
ReplyDeleteLeigh Brady and board just smacked 7700 employees right in the face. #RemoveLeighBrady #ArrestThe8 #HowWasHawaii?
DeleteBrady's next move, get ready. https://www.cutoday.info/Fresh-Today/Citing-Overstaffing-Truliant-FCU-to-Lay-Off-About-30-Employees
DeleteAdvisory board members. Us employees need your help now more than ever.
DeleteNo bonuses this year even though we had record profits! How will that compensation study will turn out?
ReplyDeleteCompensation study is over, now they say that can’t give raises and promotions due to “other reasons”
DeleteBrady bunch might think all employees except themselves are too foolish and stupid. But all the employees knew the writing on the wall even when the words "compensation study" was thrown around. Just a hogwash.... But that didn't stop themselves from promoting the friends and family plan and giving themselves a big fat paycheck.
DeleteThe worst 2 1/2 years in SECU history continues. You’ll never get the employees respect back now.
ReplyDeleteAgreed. This new leadership lost the employee's respect a long time ago. It's not coming back.
DeleteAll the long hours my staff has put in taking call after call. I’m so disappointed in this board.
ReplyDeleteWhat do they do all day while we work is my question?
ReplyDeleteWhenever someone from management says anything about payroll, remember that eight of "this board" allowed the selfie queen to hire over 1,000 "extra" people, not one of which ever helped a member.
ReplyDeleteOver 1,000 "extra" people, which is more than three times the total number of employees who work at Andrews Federal
https://www.andrewsfcu.org/Learn/Inside-Andrews/Copy-That/Andrews-Federal-Credit-Union-is-Officially-a-Great
(June 24, 2019): Andrews Federal Credit Union is now a Great Place to Work Certified Company in 2019. To earn the prestigious recognition, Great Place to Work surveyed all 304 of Andrews Federal employees.
Since none of it went to "A Paper" savers, what have the eight on "this board" done with a BILLION dollars the past two years?
https://www.secujustasking.com/2023_10_31_archive.html
If they would put everything back under the branches and have internal departments stop being so top heavy and all the people that work from home, things could quickly change. How many bosses are there in Loan Administration? Come on Leigh, give WFH folks say 3 months notice that everyone will be coming back to the office and no more wfh and right the ship. No more of them sitting at home being able to watch their kids and do other stuff while the members and branch employees suffer.
ReplyDeleteMany have been created for the sake of transitioning to selling our mortgages to Freddie Mac and eventually, Fannie Mae.
DeleteSelling our mortgages? WHAT?
DeleteWe have skills, knowledge, experience, and education in the branches. Let us use the training we were given. I’m discouraged every time a member wants to know why we can’t help them with things they always came to us for and instead they get passed along to wait for a callback from someone else in their specialized department. Tell me how that’s better.
DeleteOkay. JB helped us get the word out on electing the right board members. Do you think he could help us get a petition started to bring this to LB? Because honestly everything you said was on point.
DeleteSlash IT in half! That place is bloated and more arrogant than ever. They have a project management group that cannot stop hiring people who live all over the country and throwing our money away!
ReplyDelete