... as their pocketbooks are picked!
The SECU Board and the "Executive Leadership Team ("The ELT") keep trying to make excuses for the growing lending fiasco at SECU. Their "spin" is becoming a spiral... direction downward.
There are few missteps the Board and ELT have not made in their erratic pursuit of risk-based lending (RBL). Reminds you of that story of the rube crossing a cow pasture, jumping from cow pie to cow pie because he had seen some ("industry standard") sign in town which said: "Keep Off the Grass"!
The Board and ELT, with the latest retreat to 3-tiers, appear to realize they've stepped in a mess - soaring delinquency and charge offs; but lack the necessary leadership depth to admit it - and fix it. Perhaps the Board and ELT hope the members won't notice the mounting muck created by their pie-hopping... suspect that's wishful thinking. Members have taken notice that there is "something in the air" at SECU these days...
But let's look at the real, actual, hard dollar financial damage to many SECU members from RBL :
✅ Financing a $25,000 used car for 60 months at SECU:
Under the "new" 2024 3-tier RBL system: Lowest rate ("A"-tier) = 7.00%; Highest rate ("C"-tier) = 9.00%.
Under the "old" 2023 5-tier RBL system: Lowest rate ("A"-tier) = 6.75% Highest rate ("E"-tier) = 13.25%.
✅ Here's the rub: In 2023 at 13.25%, under the 5-tier RBL, SECU borrowers in the higher tiers were unfairly being overcharged as much as $3,000 more in interest over the term of their auto loan. A $3,000 overcharge is not just a "rounding error" for most SECU members!
👉 Comparing the new 3-tier "C" rate with the 5-tier "E" rate appears to be "better" - if you believe discriminating less against the majority of SECU borrowers is "better" than discriminating more! (Is that really "better"?)
✅ So, what should the SECU Board and ELT do about the now acknowledged overcharge and unfair pricing under the 5-tier RBL system in 2023? Well, a good start would be to simply lower the rate on all the existing C, D, E loans to 9.00% going forward. The loans are all identified on the computer system and it is easy to do. For all members in aggregate, this would represent a savings of tens of millions of dollars in future interest costs!
😎 The Board and ELT often warble - when correcting their mistakes - about "acting in good faith". Why not, in good faith, take this member-positive step?
... rather than just leaping to the next pie?
Humans suffer from pride and can't bring themselves to admit they made a mistake and ask for forgiveness...
ReplyDeletesuch is human nature. But whether you admit it or not it still stands as a mistake. We all make em, it's what you do after the fact that counts... most lie to others and themselves even though they are caught red handed... you see this play out everyday even though the truth is staring then in the face.
Every advisory board should demand the board reduce the rate to 9% on those loans now. Do your job speak up for us
ReplyDeleteI want an update on the Strategic Plan. As of today it is just print on paper for show. Seems to be a theme with this Leadership group.
ReplyDeleteStrategic plan is a bad joke, told poorly and in bad taste - more credit union cutesy.
DeleteHow do I find who is on my Adv board?
ReplyDeleteTheir names should be posted in the foyer, on the right, as you walk into your local branch.
DeleteABs used to be on website but now gone. Look out, know what's next with "this board".
DeleteIn your example the Board lowered the rates on E car loans and raised the rates on A car loans? Is that right?
ReplyDeleteNone of what this board/CEO have done the last few years has enhanced my life ... just the opposite ...
ReplyDeleteWhen rates dropped so low about 10 years ago the cu lowered the rate on my mortgage all by themselves. They used to know who owned the place and looked after our interests. Need to lower these members unfair rate.Stop acting like a bank.
ReplyDeleteneed to tell 4 board members this fall "You're Fired"!
DeleteThat’s because you had an Adjustable Rate Mortgage. SECU did not “lower” your rate just because they went down.
DeleteThat 2:25 pm comment is "uninformed".
DeleteSECU adjustable rate mortgages have a "floor rate", which is the minimum rate on the loan - the rate can't adjust any lower than the floor!
What 9:55 am is talking about is, when rates plunged to super-low levels a decade ago, SECU unilaterally let rates on existing mortgages adjust below the contractual floor rate.
Why would SECU do that? Because it was the right thing to do; fair to the members.
Retrenching to the 3-tier system is the same situation. If the Board doesn't lower the rates on those 12.25%, 13.25% loans, going forward those members will be overcharged unfairly until their 5-year car loans are repaid
SECU has acknowledged that the 5-tier system was unfair, the members shouldn't have to continue to pay for the ELT's error.
Let's see what they do!
Uninformed is being quite polite.
DeleteI utilized that program at the time, and yes, it adjusted my rate to the new loan rate at the time, which was below the floor of my ARM (plus I wasn't at an adjustment point anyway) without having to resign the loan. Thing is, that isn't charity--rates had fallen so fast that a lot of those mortgages were going to get refinanced anyway. By providing the adjustment, they could save the members some money, since there was no new loan paperwork costs. Plus, you were keeping members with good payment histories in their existing SECU loans, since every refi has some chance of going somewhere else. It's these little efficiencies that SECU used to be so good at finding. I have no confidence that the current crowd would be able to implement something similar.
Stop gouging us on loans and gypping us on savings.
ReplyDeleteSo the board sets the rates?
ReplyDeleteNo
DeleteYes, the board sets the rates.
DeleteNo, they do not.
DeleteWho does? The Tooth Fairy?
DeleteIts the ELT. Executive Leadership Toothfairy
DeleteGym Haze
DeleteThe Fairy Godmother
DeleteGive thrm their money back!
ReplyDeleteThanks for putting an accountability bullseye directly on the Board. They won't be able to duck the lack of personal fiduciary responsibility and sorry personal ethics underlyiny all this. It's their fault - own it!
ReplyDeleteLeigh, bless her heart, didn't make them ruin SECU.
But she is not speaking out against these policies. She has endorsed them all 100%.
Deletethe boards agenda
Delete