SECU Board - Coming To Its Senses? Wouldn't Bet On It!

 

State Employees’ Credit Union asks to meet with SEANC

By BusinessNC

02/28/2023

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The N.C. State Employees’ Credit Union’s board has asked to meet with officials of the State Employees Association of North Carolina, which has criticized lending policy changes taking effect this week at the second-largest U.S. credit union.

SECU’s board “shares your desire to encourage the financial wellness of current, retired and future state employees,” Chair Chris Ayers said in a Feb. 24 letter to SEANC Chair Martha Fowler. She had asked the credit union to rescind its plans for “tier-based lending” starting March 1 after hearing from former SECU CEO Jim Blaine, who criticizes the changes as negatively affecting most members.

SEANC officials plan to meet with credit union leaders once a date can be found to accommodate association members, who live all over the state, spokesperson Jonathan Owens says.

SECU has historically charged its 2.6 million members the same interest rate on loans, irrespective of their financial status. New policy involves some members paying as much as five percentage points more for some loans. Other members will be eligible for lower interest rates.

Blaine and Mike Lord, the two CEOs at SECU between 1979 and 2021, oppose tiered lending because they say 60% of 1.18 million SECU borrowers would be classified by rating agencies as having lesser credit scores than “A” and “B” customers. They presumably would pay higher rates on loans under the new policy.

In his letter to SEANC, Ayers says 68% of current and retired state employees “would have qualified for better interest rates if tier-based lending were in place.” The credit union did not respond to a request for additional information on Ayers’ estimate. Ayers is the executive director of the N.C. Public Staff, which advocates for customers on rate cases at the N.C. Utilities Commission.

SECU, which has $50 billion in assets, is the only major U.S. lender that has not used tier lending as a core strategy. It says the new policy will make its loans more competitive with rivals.

 

The SECU Board - Missing The Point - People Helping People In North Carolina

 To: SECU Board of Directors

Dear Chairman Ayers,

Well Mr. Ayers! See that you and the SECU Board have gone ahead and done the the dirty deed! Sure you're proud of risk based lending...add it to your resumes, so North Carolinians won't forget you.

 Many members believe you and the SECU Board of Directors are missing the point, that you simply don't understand "There Is A Difference" at SECU. Here's a member letter on the negative impact of risk-based lending on the members of SECU.  

You received this letter  5 months ago - have you read it?

 

From: Kirby Parrish <kparrish@nc.rr.com> Subject: Policy Changes
Date: October 20, 2022 at 11:11:54 AM EDT To: cayers13@hotmail.com

Cc: admin@ncsecu.org, jim.hayes74@ncsecu.org

Dear Chairman Ayers,
I would like to tell you a brief, true story but would begin by giving you a short introduction.

I am recently retired from SECU. I started off as a part time teller, then loan officer, branch manager and eventually district manager finishing an almost 39 year career as a Senior Vice President, all spent in the branch. As I told someone recently I bleed branch. I think I can make the case that a career spent in service to SECU members and staff is a life well led.

I am concerned about the new direction of SECU in some areas. When I was in the branch everything we did...everything, was centered on helping members, from the teller line to the loan office we worked hard to enhance the member experience, streamline it when needed and be attentive to member needs. It was pretty simple, do the right thing for the members, period. One of our greatest strengths as an organization was our local relationship with members, it fed our growth. Not for growth's sake but because we were doing the right thing. Not necessarily the thing that produced the most income but the right thing. I understand math, SECU must stay financially sound to be able to continue to serve members (and we always have), but not to the extent we harm certain members. I see that we have tiptoed past that line with some newer policies such as risk based lending and raising fees.

I would like to tell you one story from my personal experience that may help you understand what we do for members and what I fear we may be losing. This story involves a member when I was the manager of the Garner branch. Mr. Ratliff was an older gentleman I helped on a regular basis. He was soft-spoken, humble, sincere - he literally came in with his hat in his hand. Just a sweet man right off the cover of the Saturday Evening Post. He would come in every month or two to get a small loan of $100 or $150 for something he really needed. I always helped him and we always got paid. But while he was soft-spoken, he was also hard of hearing even with his hearing aids so I would close my door when he came in because I would have to raise my voice to speak to him.