...Esse Quam Videri.
😎 "To Fee, Rather than to Seem?"
The "We Are SECU Board" remains stubbornly dug in on costly policy making for the member-owners. And, with its head buried in the sand, the "We Are Board" keeps missing the obvious. The financial world is changing, moving ahead rapidly - especially in the area of consumer protection. But, bless their hearts, the "We Are's" keep missing the yacht, e-r-r boat!
In a recent post [link to post], we looked at the fact that SECU remains one of the few large financial institutions still charging an NSF fee on checking accounts. That missed opportunity to drop the fee cost SECU members $25 million last year. Added to non-market savings rates; discriminatory, excessive rates on loans; and rising concerns over service quality; " the We Are's" seem hell-bent in a drive toward irrelevancy. Remind me, why should one become a member? What's the "business case"? What's the "purpose"?
Now comes the "Credit Card Late Fee" poke-in-the-eye. Within the last 2 years, SECU has jacked up the credit card late fee to $20 bucks a pop! No discussion, no explanation, no justification. Guess the thinking is, if the member is late or just forgot, a $20 slap in the face will straighten 'em up! And, if they're struggling this month to pay, adding $20 to their burden is the best help and financial advice SECU can offer. Proud of that type of thinking?
✅ Here's what the real world is thinking: [Forbes 3/8/24] - "In a move that’s expected to save Americans $10 billion annually, the Consumer Finance Protection Bureau (CFPB) is capping credit card late fees at $8 per occurrence. This represents approximately a 75% reduction from the current average fee of $32 and will save American families who have missed payment deadlines, on average, about $220 per year. The rule will take effect in early May."
"Households who miss payment deadlines, even by a single day, will appreciate that late fees are more affordable now. The new rule keeps costs at a more reasonable $8, allowing more of payments to be applied to credit card balances rather than extortionate fees."
✅ SECU doesn't fall within the group of very large credit card issuers - those with over a million+ cards issued - to which the rule initially applies, so SECU isn't required to reduce its credit card late fee - yet!
Wanna bet what the "We Are SECU Board" will do?
😎 What would you do?
... maybe, "Do The Right Thing"?
Legacy Board's Motto "WEworked" - "To 'WE', Rather than to Seem".
ReplyDeleteWe should hope in October it becomes "To 'FLEE', Rather than to Seem".
Already jacked up the interest everyone pays---that's not enough for the "We Are" board. "We Are" might have missed some left over change in "people of modest means" pockets
ReplyDeleteDid I miss a Press Release? A Memo? The Secret Strategic Plan? When did it become okay to fleece the members?
ReplyDeleteAnd by fleece I specifically mean steal from, screw over, hold down, discriminate against and marginalize.
The current leadership must be on autocratic and narcissistic crack.
It's now about 'Industry Standard' (Profit) vs 'SECU - There is a Difference' (member owned).
ReplyDeleteI mean it's been long enough now to see that ... Nothing short of removing the board members and C-suites that continue these policies will righten this credit union.
This place doesn't even resemble the organization I joined in 1997 ... so much for progress!
I think the credit union has just gotten too big for their britches ... they can't handle success ... and have forgotten who they serve. You can't serve the members and "Profit" ... one will trump the other!
ReplyDelete'Pride goes before destruction, a haughty spirit before a fall.'
Why did the cfpb only require large credit card issuers to lower their late fee?
ReplyDeleteSorry, don't know the answer to that one. From past experience, these type regulatory rules involve some "negotiations" and compromises. Regulators always start at the "top of the food chain" and work downwards over time
Delete.
Why would the large banks agree to the change? 1) No question that a $32 nsf fee is extortionate (the actual operational cost of returning a check is a matter of pennies), 2) no question those fees fall on the most financially vulnerable, 3) no question that the majority of the fees are imposed on a very few, repeat offenders (what's the solution to that? Easy !!!...close the account!)... and most importantly 4) the banks knew 1,2,3, were empirically true and that the regulators with the help of Congress were going to devastate them in the judicial courts and in the court of public opinion. And besides, an $8 fee on a couple of cents transaction is a very good deal!
But if you are a business strategist, consider this. Remember that post about Chase opening branches in metro-NC? Here's the link: https://www.secujustasking.com/2024/02/focusstrategy-old-fashioned-branches.html
Going forward if you wanted to open a checking account with no nsf fees or open one at SECU which promises to whack you with a $12 penalty if you forget... which would you chose? Same on a credit card... with BAC which has an $8 "oops!" fee or SECU which slams you with a $20 hit for your forgetfulness?
As has been pointed out before, SECU is demoting itself from being a first class credit union to being second class bank - as theses two examples clearly show!
. What do you think that means for the future of SECU and its staff?
Did you think the banks aren't good at what they do? Guess again!.
BTW, the NCUA (SECU's primary federal regulator) will be requiring all credit unions "over $1 billion+ assets to specifically report the total $ amount of nsf fees collected beginning as soon as March 31, 2024.See below:
Delete"The NCUA’s 2024 Supervisory Priorities specifically note that NCUA examiners in 2024 will be reviewing overdraft programs, including “website advertising, balance calculation methods, and settlement processes.”
Additionally, the priorities letter notes that examiners will be looking at adjustments using terminology that mirrors the CFPB’s guidance relating to “junk fees.”
"Call Reports in 2024 – New Fee Reporting Requirements"
"Recently, NCUA has proposed changes to the Call Report, which would require credit unions with $1 billion or more in assets to report the fee income they derive from overdraft and NSF fees. "
Can't "take a hint"?
"Did you think the banks aren't good at what they do? Guess again!."
ReplyDeleteThere's a reason they have the biggest buildings in every major city across the country ...
If we’re going down this road—would requiring members to pay $1/month to the Foundation also be predatory? $1 a month means a world of difference to those struggling.
ReplyDeleteUnusual comment! Seems illogical to equate a $20 late fee on a credit card which the Feds now label as "extortionate" with a $1 contribution to the Foundation. Certain this is not a staff member!
DeleteLast time I checked the $1 contribution to the Foundation was at the option of the individual member.
It can be changed to mantance fee if they don't want it going to the foundation. Also, they can donate more than the dollar if they want.
DeleteThe sad thing is before the "new/new", SECU would have set the example and would have already done away with the NSF fee. We WOULD have been the industry leader in this initiative not the " last on to the dance". Oh how the mighty have fallen!
ReplyDeleteTake away the NSF income and some of these credit unions would have no income at all. Not for profit CU extorts NSF from its members. The for profit Banks discontinue the shakedown. That's a screw job without the kiss. Call it ScrewCU -
ReplyDeleteI mean the goal should be to help members not get NSF such as another chance
ReplyDelete