Friday, February 17, 2023

SECU Risk-based Lending # 6

To: SECU Board of Directors 


Dear Chairman Ayers,

Won't hold you long today, because I suspect you and the SECU Board are eager to get on into the weekend and watch the Super Bowl ! By the way, you and the Board aren't really going to run SECU commercial ads during the game, are you? Those ads cost millions don't they? Bet that was just someone doing a little pot stirring, wasn't it? But y'know, these days members are never quite sure what y'all are really doing - if you know what I mean.

RBL # 5 gave you a "Common Sense" plan for increasing the loan portfolio while offering all members the best borrowing rates around - without discriminating against any members based on their credit score. With $14 billion stacked up in investments yielding 1.13%, why wouldn't you offer lower loan rates to your members? Whose money do you think it is anyway?

Wanted to show you one more example of how all members are put at substantial financial risk when Chairman Ayers and the SECU Board sets loan rates based upon punitive, discriminatory, and often inaccurate credit scores, Risk-based lending does not decrease lending risk to SECU, but it does put every member at greater financial risk. And,  the SECU Board has told the SECU lending staff that they can not remove the extra, higher rate surcharges imposed by RBL even when the SECU staff knows those penalty rates are not justified by the true creditworthiness of the SECU borrower.

In other words, Mr. Ayers and the entire SECU Board have told the SECU staff that the Board no longer cares what the staff knows about the individual, local member.  The SECU Board - sitting a bit too smugly in Raleigh? - wants the staff to do what the Board has now done  - stop listening to the members!

Here's a real life example of how a credit score can inaccurately reflect the credit risk to SECU of a borrower and why charging those penalty, surcharge rates doesn't appear to be justified, regardless of what that credit score number is! Guess it would help to tell you that the examples shown below are from my actual, personal American Express card account (which I only opened this year after some shenanigans commenced at my previous card issuer). Would note that my AMEX profile says I have a 42-year credit history, no delinquency/past due, and have only two existing accounts - AMEX and that "previous issuer" card.