... Mythical figures?
"Myth" is often defined as any SECU Loan Administration belief that has no basis in fact - or any false story
1) 😄 SECU is not lending to "A-paper " borrowers:
.... ! @ $9 billion in outstanding loans to A-score members.
2) 😄 With RBL our loan losses and delinquency will be much lower:
● SECU 60+ day delinquency on March, 2023 Call Report was ⬆$470 million.
3) 😄 With RBL , we'll have the best rates for "A-paper" folks:
● as of May 25, 2024:
● SECU's current "best", A-paper, 60 month new car rate is 6.00%.
● 
Fixed rates 60 months - New car (dealer) rate ⬆ 5.94%. (extra .5% discount available)
4) 😄 RBL will greatly increase our "dismal" total loan to assets ratio:
SECU (dead heat!) 3/23 6/23 9/23 12/23 3/24
5) 😄 RBL doesn't discriminate against SECU members:
● Average score black folks : 677 (SECU "B" paper) ⬆ will be smacked by SECU with higher rates!
● Average credit score for folks in 20's: 660 (SECU "B" paper) ⬆ smacked!
... but that's all 😄 Greek to me!
They’re (board/C-suite managers) are opportunists who would sell their member/owners (and Mom) for 20 pieces of silver... What's it in for them? Ahhh the 64 Billion dollar question (used to be million until inflation)!
ReplyDeleteThere's a lot of question begging in this comment @2:12, but it's an understandable take from a commercial banker point of view. What this data may just as well show is the extent to which SECU was better at determining risk than other financial institutions. Credit scores, and to a lesser extent credit reports, are very blunt instruments, but they are cheap. Banks (big banks, at least) take your application, credit score, and report and send it to a person sitting in front of a computer, and assign a risk and a rate based off of that. That's a lot cheaper than having real loan officers in branches, but the tradeoff is that it leaves a lot of value on the table. What SECU was able to do, through having a limited membership (with relatively stable employment) and knowledgable local lending officers, was make better risk determinations than what the limited paper records alone allow.
ReplyDeleteHuman workers are not commodities. SECU needs to just invest in their employees before exterminating them with technology because it’s cHeApER. Screw being cheap…help your co worker and fellow member. The workers at SECU need this job now more than ever. These workers have families and children to feed. Life isn’t about number nor is it about profit. It’s about people helping people and doing the right thing. It’s not about exploiting good workers and a membership that needs dedicate service and people that care working at that institution! #PeopleOverProfit #EmployeesAreNotNumbers
DeleteProbability, and therefore risk, is always based off information. The risk from the perspective of the bank for a given borrower is different than the risk from the perspective of SECU for the same borrower, because SECU has additional information and additional understanding of that information. And combining that with a better collections system helped to reduce SECU's risk even more, compared to a commercial bank. The evidence for this is that default rates were low previously, and are rising now, presumably as a result of changing SECU systems.
ReplyDeleteGiven how large the rate surcharge is for lower tiers in the new systems, if the A tier borrowers were historically being "overcharged" by that amount, a much larger number of them would have been going elsewhere.
ReplyDelete
ReplyDeleteSo, who are the winners under the flat rate system? Well, everyone. The A and B tier has more options and knowledge, but stick with SECU, so are presumably getting a good enough rate, while the C, D, and E tier may not be able to borrow as much as they want, and maybe not as much as another lender would allow, but are getting a better rate than other lenders would allow.
No doubt, there are potential borrowers in the lower tiers that are determined to be too high a risk to lend as much as they need, who are then forced to go to other institutions and pay higher rates.
"The A and B tier has more options and knowledge, but stick with SECU..."
DeleteThat was me, but I am loyal (but don't mistake loyalty with stupid, I checked around) and it benefitted my place I worked at ... don't bite the hand that feeds you! But that's just me ...
The members are the rightful owners of the credit union.
ReplyDeleteAt this point the board and c-suite managers have become squatters! We need to have them removed ...
4 more in 2024!
Folks always remember, it's the ordinary people doing the extraordinary things that makes a company/country etc... successful! Bless those who on this Memorial Day weekend who gave all they could give!
ReplyDeleteNo one mentions that long term member who’s credit score suddenly dropped because of a medical collection, she is now below a 660 and has to pay 2% higher interest rate. Yes it happens and I have seen it. From 734 to 627. The new SECU punished this mbr which cost her 1000’s more.
ReplyDeleteFrom a commenter: "BTW, it seems appropriate to adjust the denominator or assets the same way you did when looking at operating expenses and capital. I went ahead and did it for you, and by backing the $5 billion debt out, the loan to assets in Dec 23 and March 24 would have been 67.6% and 66.6%, respectively."
ReplyDeleteIt's sort of funny to see that $5 billion Federal Reserve "loan" kicked in and out of the assets whenever necessary... in the same way that soaring delinquency can "be explained" away by an extra day in a February leap year!
But why haggle, the commenter makes the point that the loan/deposit goal isn't moving much with or without the "Fed loan".... a surge from "66.6% to 66.7%", not exactly earth shaking. More evidence that the 5-tier RBL was a bust.
Sorry, the SURGE was from 66.6% to 67.6%... want to get the commenters stated facts straight
DeleteSame commenter: "We said delinquency would come down. It is. I see your March 24 over 23 data, ... but March 24 is down from Dec 23. We said RBL would improve quality and lower delinquency, and in 1Q 60 day delinquency $$ decreased 7%!"
DeleteSo here are your real #'s, not the contorted BS above. The figures below are from the quarterly "Call Reports" submitted - and certified! - by SECU with the Federal regulator:
60 day delinquencies 12/2023 = $753,346,000
60 day delinquencies 3/2024 = $699,766,000
... as the commenter states down @ $54 million in the first quarter of 2024... "We said RBL would improve quality and lower delinquency."
'Course the commenter "conveniently forgot" or didn't know- which is typical - to mention the $78 million in charge-offs at 3/2024. Charge-offs are of course subtracted directly from those 12/2023 delinquency totals.
If you include, as you should, those write-offs in the calculation ; all of the "$54 million, 7% decrease" was the result of the highest quarterly charge-offs in SECU history! Would be fairer to say delinquencies actually went up by @ $24 million ($78 mil losses - $54 mil decrease = +%24 mil).
Charge-offs are a measure of SECU's effectiveness in collecting loans... the commenter would probably say "best ever" with RBL.
The "decrease" is an illusion; those losses are real hard, dollars coming out of the members pockets
"The commenter" of course squirmed away from the obvious facts and tried to concoct a deeper pile. The old "Look over there" response, don't pay attention to that mistake, try this one... just hope this is not an SECU employee!!!
DeleteTechnically, the losses went directly into members pockets. Who do you think took the money and didn’t pay it back?
Delete@1:15. The SECU admin and loan admin bears the responsibility for these unprecedented losses at SECU. Previous Administrations were able to weed out the deadbeats. The current "leaders" are relying on the outside numbers provided by the rating agencies. Period. Everyone knows a certain percentage will default, This administration does not try to id those members.
DeleteBad management of our money!!!
The current "management" does not have expertise necessary to manage the members money. Distressingly inadequate stewards of our assets.
ReplyDeleteIt's the Ted Lasso Effect without the positivity. After all, Ted Lasso succeeded without having soccer coaching experience, wink.
DeleteFrom a commenter: " The "A-tier" members have almost always been able to get better rates elsewhere. You've even acknowledged this before on the blog by saying that SECU had one rate that was publicly known which allowed borrowers to shop around and find better rates if they wanted to and could. "
ReplyDeleteCorrect. It has always been true that publishing SECU's rates made it easy for members to shop and compare. It equally meant that car sales folks or other institutions also knew SECU rates and might employ various sales tactics/discounts to make members a slightly better offer.
If in fact the members were able to use the SECU rate information to negotiate a better deal elsewhere, never felt that was bad for SECU. If the member "won", SECU also "won".
SECU's principal purpose was to help improve the lives of its members - has that purpose changed?
And not to rub it in...well maybe just a little... you'll note from the rate comparison example in the blog post, it appears that A-folks can get a better new car rate right now at BOA than with SECU's "industry standard" RBL.
DeleteDoes the SECU Board know this?
Be sure to tell them!
Not the commenter, but not sure 0.05% will really sway anyone one way or the other on a car loan. At that point it’s about what is more convenient. If I do most of my banking at SECU and the rate is either the best or not far off from the best, then I would use SECU. Otherwise, I would use someone else.
Delete"SECU's principal purpose was to help improve the lives of its members - has that purpose changed?"
DeleteYes the evidence by what this crew does...
They treat the member/owners the same way they treat their legacy employees ... like CRAP!!!
Treating people with respect and dignity has nothing to do with how much money you have in your 'bank account' (thought I would use terms they can relate to)! If I said share account they wouldn't understand ...
At 4:02, bet you can’t explain why a share account is still called a share account if you have more than one at a credit union? Each member only has one share in the credit union, regardless of how many share and deposit accounts they have or how much money they have in them (with the exception they maintain the “par” value established by the credit union).
DeleteI'll be using my "one share" to vote 4 more out in October ...
DeleteWe're going to kick they're butts because they are creass and we are honest
DeleteSounds right. The "rule of thumb" was that @ .25% was generally indifferent to the member, if pre-approved (convenience as you say). The old dealer ploy of offering 4.99% if the CU's rate was 5.00% usually didn't work.
ReplyDeleteAbove .25% though, members would go with best rate, if they felt all other things equal. Again that was fine if the member got a better deal...
You would think after being burnt by 5 tiers you would learn but nope they just turn the heat down to 3 before they stick their finger back into the oil ...
ReplyDeleteIncompetent Bureaucratic Rubes... maybe Gymmy can find them a job wherever he landed ... if it's still in business ....
He's still got 6 million floating around somewhere on SECU's books... does it go back to SECU or will Gymmy get it when he retires from wherever he is. sure wish "This Board" would explain those shenanigans!!
Deletewe'll never know the whole truth and nothing but the truth .,.
Deleteare board meeting minutes made public?
ReplyDeleteA deception closer to the truth is still a lie ... own it CU
ReplyDelete