... it can't be me!
So today, lets start to look at those new risk-based lending enhancements "approved by the SECU Board" - emphasis added by the "SECU Executive Leadership Team" to assure members know who to blame for all this, as the SECU lending yacht continues to list.
Might be well to note that the announcement doesn't indicate that these "enhancements" were unanimously approved by the SECU Board. Given the ouster of all incumbent directors last year, not hard to imagine that these changes were a split decision. If you'd like to check behind me, ask your branch to email you a copy of the "All Staff - Board Lending Policy Changes" memo dated 4/15/2024.
You do have a right to know what is being done to you, regardless of what the "Executive Leadership Team" might think.
Where to start? The memo covers a lot of territory - a deep and dense wheelbarrow load!
- The "Executive Leadership Team" likes to call their overall lending strategy "tier-based pricing" (TBP) - "race-based lending" (RBL) seems more accurate. But, lets not argue! What is undeniable is the "Executive Leadership Team's" lending strategy - whatever you call it - has increased loan losses by $125 million annually and resulted in delinquency 3x the industry standard since 2021. TBP - their strategy - is not working!
- The Consumer Financial Protection Bureau (CFPB), a federal financial institution regulator, maintains a national, consumer complaint data base for each financial institution. SECU, with 2.5 million members, had a remarkable record of less than 1,000 total complaints up until September, 2021. The rate of complaints by SECU members over the last 18 months is 100% higher than over all prior 10 years - the majority of complaints are over lending.
- According to the 4/15/2024 "enhancement" memo: "The Board spent over a year reviewing information, requesting data and debating how to meet the needs of all members [their emphasis]." But, then announced that members with credit scores less than 600 are: "No longer eligible for Open-End lines of Credit, Visa Credit Cards, Unsecured Term Notes, and Home Equity Lines of Credit." The "Executive Leadership Team" must have their own, unique definition of "all members"!
- The "Executive Leadership Team" also assures us that: "... the Board was lowering the rate on loans to members with credit scores below 600 and aligning their rate to what historically would have been the one rate model for all members." Folks, if you can make sense out of that statement, please explain it in the comments. Seems to acknowledge that the fair, one rate model for all members is better. But, the "Executive Leadership Team" believes the best way to achieve that fairness is to stop lending to those members all together?!? Incredible lending logic, don't you think?
- And then there is this statement: "... the Board explored various pricing scenarios, looking to provide a very competitive, if not the best, rate for all members..." Hard to believe "the Board" is really the culprit here, but that's what the "Executive Leadership Team" is telling all the staff!
... hang tight there is more!
The Executive team knows how to fix this. Just hire more folks in Marketing. Simple.
ReplyDeleteAnother 2 marketing positions posted in the last three days. Still have yet to see any positive results and why these positions are critical...
Deletemaybe they'll be able to get the Common Bond out in time now ....
DeleteThey have lost their BEST marketing employees...."legacy" employees would have recommended secu to EVERYONE we knew....nope not now...I will NEVER refer anyone to secu the way it is now!
DeleteWow, let's waste more of the member owners money on marketing.
DeleteNew website coming soon. From the front page now "You spoke, and we listened. We made the new SECU website easier and more convenient to use. Preview your new online home for trusted financial services."
"New website coming soon."
DeleteYou can put a lipstick on a pig ....
Does that really matter to those who have a 600 score or below?
New Boss same as the Old Boss..... etc ....
What is the new website for? What does it do? How much did it cost?
DeleteFirst and foremost question is, what is the need for spending money on a new website when the current one works fine, does what it's supposed to do along with meeting the needs of members and no one complained, especially when that was just a portal to the financial data.
DeleteNext, why was this "particular" product chosen and how is it more beneficial than the current one. Yes, you know the answer, this is the same as First Citizens Bank, where bombastica and his cronies came running out of, to find another shelter or roof over their head....
So folks under 600 might as well pack up and go elsewhere because SECU isn't going to help you.
ReplyDeleteMaybe some guy on the street corner has a 'loan' for you!
SECU's attitude is now when you don't need financial help anymore, then we can help you. As long as you're down and out, no help at SECU. Follow those helpful tips we have on Instagram about How to Raise Your Credit Score. "If only folks would take our advice, they wouldn't be in this mess." Ohh, Leigh Brady can cosign the loan for them so that all the members can get the A rate!! Go Leigh!!
DeleteThey just don't want to serve poor people anymore. Can we just state it plainly?
DeletePoor folks living in a rich mans world ...
DeleteCosting us an extra $100/200 million a year is real money even in todays world. That's hitting @ $100 bucks per member for the privilege of having this BS Exec Team. They're not worth an extra $200 mill.
ReplyDeleteIf you are truly measuring”Risk” would you consider a borrowers debt-to-income ratio? Loan to value? These aren’t considered but should if it truly were about Risk.
ReplyDeleteThose are considered. Loan to value is even used with some products to determine the rate. Has been for a long time.
DeleteFor mortgages yes. No other product. D/I has never been considered, The more I hear, I truly do not believe the higher ups are capable. Additionally, there actions or lack thereof show this as well.
DeleteWhat kind of consumer financial organization is this anyway? Doesn't SECU have a commercial lending department now even though SECU can't make commercial loans? Is that where This Board and CEO are focusing all their time? It sure isn't on the consumer end of things. Forget about "people of modest means". This Board doesn't know who those guys are. Women, blacks, young people....
ReplyDeleteThe tighter restrictions is a way to keep liquidity in an ever shrinking deposit base. With shares walking out the door, they need to slow down lending so that they don't get upside down on that loan to deposit ratio. If you remember early on, Hayes and company celebrated the higher loan to deposit ratio but in reality it was less deposits than growth in loans.
ReplyDeleteWith the TBP model, there will be celebrating over how much money is being made with no care that it is on the backs of hardworking North Carolinians. Not to mention that this "floor" on credit reports will impact the rural communities at a disproportioned amount. I hope those in the Ivory Tower on Salisbury Street remember who brought you to the dance, it sure wasn't A paper. Back when a loan officer had the ability to look past a score, the lower tier members paid us back because we were up front with the fact we were making an exception.
Don't worry, when a financial institution gets large enough that they don't bother with the smaller populations, other institutions pop up and fit that niche. It has happened in the banking and credit union world numerous times. It will happen again and it will happen to SECU. SECU has always been successful because they never lost sight of those smaller populations UNTIL NOW. Growth for Growth sake only will lead to failure every time, timing is the only unknown.
REMEMBER WHO BROUGHT YOU TO THE DANCE.
DeleteLocal government is going after state employees pretty hard. Wonder why?
DeleteEver heard of Langley CU out of Va? Watch for their ads in the Raleigh market. They smell the blood in the water at SECU. And they have better rates by the look of it. Say good bye leigh.
ReplyDeleteHad a member call in today and apply. She’s actually had great payment history with a beacon of 587. She had multiple medical collections due to cancer. That dropped her score the past year. Couldn’t approve her for a debt consolidation. She needed around 12k but her credit was actually good regardless of the 587. She had cancer and couldn’t afford her medical bills…so we are penalizing members now for…getting cancer??
ReplyDeleteDid you consider lending concurrence? A long shot but worth it if her report was flawless other than medical.
DeleteWhen we get H410 passed .....
ReplyDeleteWhat will 'they' say when asked, 'What did you do with the poorest of my "members" ...
ReplyDeleteIt's not how you treat the A-paper but how you treat the less fortunate ...
The goal is also have employees quit. Why is the career path still not out? Every employee should put that in their evaluation. Employees are frustrated and looking elsewhere.
DeleteSo much for all the money and years spent on compensation package, danglingthe forbidden promotion fruit, etc. It's all a song and a dance. Employees have given up and don't even bother asking about these anymore. It's all a song and a dance for the C-Suite and funny to them to lead us on.....
DeleteI hate to tell these folks at the top but there ain't no right way to do the wrong thing!
ReplyDelete5 tiers ... 3 tiers ... does it matter ...
ReplyDelete“Insanity is doing the same thing over and over again and expecting different results.”
The leadership watched 'Inside Job" and took it as a 'how too' to screw the members
ReplyDeleteIt is a real lending mess out there, they have made things so much worse & expect front line workers to sugar coat & convince members we are there to help…an absolute lending circus and us lenders are the clowns
ReplyDeleteAssuming this next election doesn’t somehow get rigged, who believes 4 new directors will be voted in how long will it take to reverse the damages done? How can they possibly reverse the hot mess with collections, bring wfh ppl back, reverse rbl, bring back Finesse, fix MSS, develop a career path, fix IT, kick out all these bankers, and so on and so on??
ReplyDeletejust like you build anything, one step at a time ...
DeleteI think within a month or 2 a lot of C suites do a Jim Hayes and leave of their own accord to ruin something else.
DeleteWhat if they don’t? We changed our 3 board seats last year and there has been a double down. I’m not sure that anything can save this place.
DeleteI don't think they will bring mss wfh back, they are all over the state and most would not travel the 1 to 2 hours to work in the 6 main centers that they got assigned.
Deletethought it used to be in the branches too-- to help keep employment up in rural areas
DeleteAnd end all WFH. Bring everyone back. Professional dress.
Delete"And end all WFH. Bring everyone back. Professional dress"
DeleteYep, party's over folks! It's time SECU sets the standard rather than following "Industry Standard".
Of course our leaders follow and don't lead, that's the problem ...
LGFCU/Civic requires suits/ties and call center representatives work on-site (in Raleigh). And they still have the Loan Review Committees.
Delete(I wonder if it's a coincidence that the ending of the member loan committees at SECU occurred at the same time as LGFCU announcing independence? Was that the "final straw"?)
Anyways, I expect in a few years we're going to have SECU people clamoring to join LGFCU instead.
Lgfcu has a call center?
DeleteYep. Not for LGFCU (yet), but for the Civic FCU side of things.
DeleteAs you may know, Civic and LG are one and the same. Same BOD, same employees, etc. I expect they'll merge at some point.
Executives should be evaluated by their employees. This is a common practice.
ReplyDeleteAmen! We need this at every level. For managers on up. On projects too.
DeleteThanks for cutting through all the smoke and mirrors. Sounds to me like they are talking out of both sides of their mouth but at the end of the day are taking advantage of those members that can least afford it. Unbelievable, but I guess I should not be surprised after the last 2 and a half years. More of the same...
ReplyDelete