Wednesday, July 3, 2024

A Commentor Asks An Interesting Question About Rising SECU Delinquency...  ... just beyond belief?


From yesterday's comments: "The financial summary for members on the website** shows 3-month delinquency, but you use 60 day which is way higher this year than what ELT [Executive Leadership Team] is reporting to members, which is only a little higher. Do you know why they use 3 month instead of 60 day? has that changed?" 

** From website [link] 

3+ month delinquency:   May, 2023   0.81%   May, 2024   1.04%     +0.23% higher

The federal financial regulators, including the National Credit Union Administration (NCUA), use 60-day delinquency as the reporting "benchmark". Not sure why SECU has chosen to focus on 3+ months (90 days)? Credit unions are required by regulators to charge off many categories of loans after 60 days; so you would generally expect 90 day+ delinquency to be lower than 60+ days.

😎 Here are the actual delinquency figures from the Federal Call Report:  March, 2023 compared to March, 2024:

  • 60+ days total delinquency:  March, 2023  $294 million 
                                                      March, 2024   $700 million                                                                            

Further broken down as follows:

  • 60-89 days:       March, 2023    $46 million    March, 2024   $323 million
  • 90-179 days:     March, 2023  $171 million    March, 2024   $243 million
  • 180-360 days:   March, 2023    $63 million     March, 2024   $113 million
  • >360 days:        March, 2023    $14 million     March, 2024     $21 million
Actual reported loan losses for March (just the 1st quarter): 
March, 2024   $72 million
 March, 2023   $47 million   
March, 2022   $20 million   
March, 2021   $17 million 
... hard to spin reality! Hope the SECU Board is receiving factual data from staff... it's not debatable, nor funny... nor just a "little higher".


  1. Can you provide a regulatory citation where credit unions are required to charge off loans at 60 days past due? I’ve always heard that it’s at Board discretion up to a year, and must charge off at one year.

    1. Most loans should be charged off by 90 days. The member simply isn’t responding to contact attempts and have no intention in paying. No reason to drag out the process for these cases.

    2. 3:38 pm You're right the 60 day charge off standard is not a "hard and fast" rule; and, a credit union may defer a charge off, if there is evidence that collection is likely.
      Would ask your branch VP or CEO for the actual standards that SECU uses.

    3. 4:46 pm Yes, again that's the industry standard practice at least on unsecured loans, but valid exceptions are permissible if justified.

  2. Time to take somebody out back to the woodshed— there’s some explain’ to do !!!

  3. lots of detail here. is the way to read this that the area that grew by far the most (60-89) is being excluded from reporting to members? even though including it is industry standard?

  4. 3:53 pm As stated, not sure why SECU has chosen to focus on the 3+ month ratio, industry standard focus is generally on the 60+ day ratio.
    Would ask your branch VP or the CEO. They would have the best answer.

  5. Would note in fairness that the March delinquency comparisons - the last official federal figures available - were noted by SECU back in May to be exaggerated by the 2024 leap year (29 days in February).

    Credit unions report quarterly to the federal government, so the next official figures will not be available until @ August1, 2024 - in a couple of weeks you can check out those figures to see if the tide has turned.

    The preliminary May 2023/2024 figues on the SECU website indicate that 3+ month delinquency has increased from .81% to 1.04%. While that appears small, a .23% jump in delinquency on the SECU loan portfolio is an increase of @ $ 78 million. If that imcrease remains, it would signal that more, soaring loan losses are ahead.

  6. that tide is probably a red tide