Esse Quam Videri - "To Be, rather than to seem."
You read in Chapter 24 [link] how aiding SECU members' kids apply for college (FAFSA) helped create a powerful relationship of support and trust between the Credit Union and the powers-that-be in the North Carolina education community. Relationships of importance are always built on trust. Are you for real, or are you just hype? In it for "the most profitable", or in it for the purpose? Is this about you (the"We B's"!), or about us? "To be, rather than to seem"? Doesn't usually take long to find out, does it.
North Carolina had a unique, cooperative system to help its citizens obtain, manage and repay student loans. Student loans are a difficult animal with lots of moving parts, complex rules, and much uncertainty. In 1955, N.C. financial institutions (banks, credit unions, insurance companies, and others) established the College Foundation Inc.(CFI), a non-profit, to manage the student lending process from application to repayment for North Carolinians - yes, it was a unicorn!
In 1965, the The North Carolina State Education Assistance Authority (NCSEAA), a State agency, was added to increase funding availability by the issuance of bonds in the market. Going to stop right there before we fall off a complexity cliff. Here's all that means: Demand for student loans was extremely high, NCSEAA borrowed the money to fund those loans from the public. The implied backing of the State of North Carolina helped with selling the bonds. Okay?
Where is this going? Cut to the chase. It was a super system for all involved, especially North Carolina students and their families. Worked exceptionally well until the nationwide financial collapse of 2009/2010 ( yet another chance for you to watch "Inside Job"!). Banks, financial markets in general, were on the ropes. Funding simply dried up, no one could tell how bad it was going to be (sort of a Covid-like pandemic in finance!) North Carolina kids still wanted to go to college, but NCSEAA couldn't find any funding. That's what happens when the by definition inbreeding of "industry standard" (also called "group think") hits the "everybody is doing it" wall.
So what? The "what" is the value of a North Carolina based financial institution, owned, controlled and laser-focused on North Carolina and its citizens - the State Employees' Credit Union. SECU stepped up and bought $1.5 billion in NCSEAA bonds so North Carolina kids could go to college that year, and the next, and the next. Not something that SECU had ever done before - definitely not "industry standard" -, but a win-win for everyone in North Carolina.
Didn't know that did you? Could it be that SECU, if driven by purpose and principle rather than profit, could be a an invaluable asset, a jewel, a treasure for the members and all of North Carolina?
Which do you as a member prefer - unicorn or "industry standard"?
... it's your choice, not "theirs".
What’s your point? That SECU helped exasperate the student loan crisis by making them easy to get and continuing to give colleges reason to value profit over education?
ReplyDeleteNobody forces anybody to take out a student loan. I'm from a family of modest means and without a student loan from College Foundation I would have been unable to attend college. I paid back every cent - on time.
DeleteGlad you asked that question , because with CFI it was exactly the opposite! CFI handled all the qualifications, requirements and repayments on a local basis on behalf of the folks in NC. CFI didn't let NC families nor students take out loans they couldn't afford and didn't let the for-profit, "buy-a-degree, rip you off" sleaze folks take advantage of North Carolinians.
Delete.
CFI remained accountable to the people of NC -
both the borrowers and the investors. Collection was local so folks repaid as promised and were helped if they got in trouble. CFI's loan performance set the standard for student lending across the Country. - and it was far superior to "industry standard"! That's the value of local, local, local.
SECU is "mimicking" the "wisdom" of the Federal Student Loan Program with its Strategic Plan - same mistakes: centralized collections, trying to "Go national", merging other credit unions, wanting to be a second class commercial bank rather than a first class consumer cooperative, outsourcing service, member beware "anything goes lending," vanishiing core principles and accountability, members no longer first and foremost - killing the unicorn.
Yes, the legacy Board is making exavtly the same mistakes that the federal government made when it took over the federal student loan program. You can see from the trillion dollar mess we have in student loans, that the "We B's" mis-thinking can be costly. The current financial performance of SECU is worth following closely..
Maybe the question is not whether you want a unicorn cu or an industry standard bank? But as a member, would you prefer to be a local "CFI - type cooperative" or change to become the Federal Student Loan Program?
Which one works best for you as an SECU member-owner?
Remember the choice is yours... not theirs!
@ 10:06 AM: "What's your point?" Is that even a serious question, or are you just scraping the barrel in an attempt to argue? Your comment is obviously quite desperate. The student loan crisis was already in motion, and much of that is a result of poor spending decisions on behalf of the students.
DeleteSECU was the shining light at the top of the hill ... now we are held hostage from 'Industry Standard of Mediocrity' thinkers and doers ...
ReplyDeleteWas asked if this was about SECU trying to "play at being Wall Street"?
ReplyDeleteAgain no, it was exactly the opposite. What occurred in the 2009/2010 crisis is that "Wall Street" told North Carolina college bound students and their parents to "shove it!"
Wall Street answers to profits and its investors first. SECU is a non-profit which also answers to its investors first - the SECU members!
Wall Street works for you only when its profitable. SECU works for you as its only purpose. Who do you want working for you?
Remember its your choice.... "not theirs"!