... losses continue to move,
in the wrong direction.
We've talked over the last few days about the really bad lending (RBL) which has been introduced at SECU over the last three years.
Again, in the past, lending was viewed as a cooperative effort between the member and the SECU loan officer, both had the same goal and purpose - a prudent, productive loan. The credit union loan officer should seek only to make a sound loan which is of benefit to the member - and which will be repaid without hardship by the member.
✅ The latest quarterly numbers have been announced by the National Credit Union Administration (NCUA), the federal regulator for credit unions. The news is not encouraging and confirms once again that much is amiss with SECU Board lending policies.
While total loans outstanding have increased around ten percent over the last 12 months to $33.87 billion, loan losses and delinquency have spiraled upward faster - seemingly beyond control. At March 31, 2023, SECU loans which were 60 days or more delinquent totaled $294 million. The 60 day delinquent total one year later at March 31, 2024 was $700 million - up 138%. Loan losses also have risen to $72 million for the first quarter of 2024, up by 50% (from $48 million) over the first quarter of 2023.
The $72 million in loan losses is the highest level of quarterly losses ever experienced by SECU.
SECU is simply making more and more bad loans. Who is making these decisions?
... Really Bad Lending or Reckless Board Leadership?
Before "someone" tries to claim it's not my/our fault, we're making poor decisions "in good faith".
ReplyDeleteTotal loan losses in all of 2020 - the year before the "new/new" - were $ 73.2 million... about the same as just the first quarter of 2024.
If you project the $72 million first quarter 2024 losses for all of 2024 (4 quarters x $72 mil) look out for $248 million in potential losses - under RBL.
Correction.... make that $288 million !
DeleteTheir response to fix this mess was a "freebie extension" for all members who are delinquent 60 days and below. The proverbial "bandaid to cover a bullet wound". A blatant move of desperation.
DeleteBorderline cooking the books.
Glad RBL has brought back all the A paper. That will really reduce all those loan losses…wait, what?
ReplyDeleteThere’’s all kinds of jokes here but honestly it’s just not funny anymore. SECU is slowly dying.
"SECU is slowly dying."
Delete... at this rate a collapse is a very real possibility!
maybe someone (Fed ... Bank etc) will step in and save us... All by design ...
I have 1 question about all of this, how the heck are we even in the black and not operating in the red?
ReplyDeleteI have one question too, where is the accountability? Time for folks who are making the decisions to realize this "experiment" for the last three years has gone horribly wrong.
DeleteHiring highly paid executives and consultants from the outside who turned out not to be worth what was expected, RBL's utter failure, sky rocketing losses, greater employee division and lower morale, micro managing from the top, SECUs reputation tarnished in the media. The list goes on and on. When will the madness stop? Real leaders don't blame others, they hold themselves accountable.
Is it all the extra interest we are charging?
DeleteIt’s funny Branch staff has been told the new big word for the organization is Accountability! It’s like they’re talking out of their ass. No one respects what you say when they don’t believe you!
DeleteMore like reckless BRADY leadership.
ReplyDeleteCentralized Collections is to blame as well. Let branch folks do what we have done for 85 years. We know our members.
ReplyDeleteBut. Branches need to be originating the loans. Not the credit bureau.
Delete"Really Bad Lending or Reckless Board Leadership? "
ReplyDeleteone and the same, they are not mutually exclusive ...
somewhat related - what is keeping secu from having a decent savings account rate? I am about to move a bulk of funds to another institution's hysa.
ReplyDelete.. Really Bad Lending or Reckless Board Leadership?
ReplyDeleteBoth, they are not mutually exclusive!
I am an "A" so to speak paper in the world of the new-new. Bought a used vehicle last month and for the first time did not finance with SECU. Not because of rates but just for the pure principle on not supportable the RBL---this is no longer the SECU I retired from and was proud to say I worked there. Hope Brady and team will open eyes before they ruin a great organization
ReplyDelete10:03 - But was secu a lower rate?
DeleteWell that just seems stupid.
DeleteNope, makes perfect sense to me. I'd have done the same thing. Borrowing from SECU when you disagree so fundamentally with the current direction would seem hypocritical.
DeleteI have always taken my business to a cooperative if they were a good choice all around - but it is not always rate or price driven. REI is a great example. As is SECU - I may not have everything with your credit union, and may not always shop at REI either. But I support each in my own way. My question was simple to the A rate member - how did the rate compare? Helps me understand where my credit union is in the market. Even it has been higher in the past - I wanted my business at SECU and that’s my choice. I also knew that although my rate was a little higher, my fellow member - owners that may not be able to get the best deal - were going to at our CU. That’s the difference I have learned as an active member.
DeleteBut did you take your business to another cooperative? I understand you’re wanting to spite SECU, but is giving your business to BOA or WF, especially if at a higher rate, any better?
Delete10:03 likely did.
DeleteI would’ve figured they’d have said it if they did…
DeleteI'm retired from SECU as well and to be honest, if I ever need a new/used vehicle loan I will also look elsewhere. Not a fan of this RBL and the direction this credit union is heading, which is down the toilet in my opinion.
ReplyDeleteLong time employee here. Honestly looking to making a career move. I stayed at SECU because we stood behind do the right thing. That ship has sailed. Morale and culture is beyond repair. It’s sad.
ReplyDeleteAnd that my friend is the reason I retired. Didn't want to be part of the ship going down
DeleteI’m looking because all HR does is giggle and gush about how “we didn’t know what we were getting” when we started this damn comp study 2 years ago. Were yall actually that blind that you didn’t see in the contract how the results would be provided to us?
Delete