... the SECU Board fiduciary duty.
"Credit Union: 101" has gotten to be a bit of a slog hasn't it... thanks to those who are hanging in there.
Was trying to move quickly pass the introduction of federal deposit insurance (NCUA) for credit unions in 1970 and at SECU in 1984. That change was important to all credit unions and SECU, but I didn't think it would be of much interest to you. Several comments indicate a little deeper dive might help [here go back and take a look at the comments].
Comment: "Why did it take SECU 14 years to provide their depositors federally backed insurance on their life savings? That seems to fly in the face of the Board’s and CEO’s fiduciary responsibility to the membership."
Ouch - a clear case of fiduciary irresponsibility by the SECU Board and CEO! Actually a great comment, since a hard look at the issue of the fiduciary responsibilities and performance of the SECU Board is what this three year debate has been - and continues to be - about.
Here's more of the story which the "shoot first, ask questions later" commenter was unaware. SECU provided deposit insurance to SECU members beginning in 1967!
Federal insurance was unavailable, so SECU in conjunction with several dozen other North Carolina credit unions and S&Ls formed the N.C. Savings Guaranty Corporation (NCSGC) to mutually insure member savings. Another example that, even going back 50 years, SECU was a good bit better - and much more member focused - than "the industry standard". And, also worked cooperatively "across the aisle" with diverse, local institutions to help improve the lives of all North Carolinians.
Yes, as a "unicorn", SECU can make a tremendous, innovative difference in North Carolina; as a run-of-the-mill industry standard... not so much.
The N.C. Savings Guaranty Corp. was later rebranded as FIAC (the Financial Institutions Assurance Corporation) and was liquidated in 1984 when the national savings and loan industry collapsed. After assisting with the "bailout" of the FIAC-insured, North Carolina S&Ls, SECU seamlessly converted to the NCUA federal deposit insurance system. More than you wanted to know, but most certainly a good example of fiduciary responsibility met in spades by the SECU Board.
But one serious point for you as an SECU member to keep in mind: The national savings and loan industry imploded in the mid-1980's at tremendous financial and social cost to the American people.
Key reasons for the financial collapse: 1) out-of-market regional expansion, 2) a move to commercial lending, 3) rapid expansion through financially dubious mergers, 4) charter conversions from mutual to for-profit, and 5) ... a failure of fiduciary duty by uninformed - and frequently unethical - boards of directors, often misled by criminal management.
It will never happen again! ... but it always does.
So SECU would not have had to “assist” with the “bailout” had they converted from private insurance to federal insurance? Sounds like a breach of fiduciary duty to me.
ReplyDeleteNot actually, but great hindsight! Will tell the former CEO about your idea next time i see him and next time that decade in history is replayed.
DeleteThank you so much! Any insights about the future?
And just for the record so the commenter can better understand what occurred ; SECU joined the NCUA insurance fund in 1984 after helping close down FIAC. One of the first actions SECU had to take was to participate in the "bailout" ("recapitalized") of that fund "which had been experiencing financial stress for several years" and verged on insolvency (see excerpt below).
Delete"July 18, 1984 – The Deficit Reduction Act of 1984 is signed into law recapitalizing the National Credit Union Share Insurance Fund, which had been experiencing financial stress for several years. Federally insured credit unions submit $850 million or 1 percent of system assets at the time to fully capitalize a new, restructured Share Insurance Fund."
The other great federal deposit insurance "bailout" came during 2009/2010 when the corporate credit unions collapsed forcing NCUA to seek assistance from the US Treasury. The primary cause of that loss was from Wescorp, whose primary leadership included... well already know that story....
Mic drop....
DeleteSECU Board=Hayes=Gross Negligence=More Ahead
DeleteCEOs around the US are nervous and they should be. People are fed up. Boards and executives need to wake up! You are in positions of power to help people…not to serve yourself! There is a reason people are supporting Lugi in the United Healthcare assassination. I don’t support any murder, but we must look behind the curtain why people in this country are frustrated? People are tired of being treated like s**t by corporate America. Regardless of healthcare or banking. We are tired of seeing rich CEOs serve themselves and not helping others.
ReplyDelete"There is a reason people are supporting Lugi in the United Healthcare assassination"
DeleteThis is disgusting ...
Healthcare is a right. Blue cross blue shield buddy is on our board…see where they were threatening customers cut off Anesthesia during surgery? Putting time limits on it? What kinda dystopian crap is that? Why is he on our board?
Delete@6:31am you know what’s disgusting? Denying claims which results in people dying due to lack of medical care they can’t afford. Insurance companies indirectly socially murder people every year. No sympathy for the ceo of United Health.
Delete6:31am. Whats disgusting is heath insurance companies profiting off sick people and denying claims resulting in deaths for Americans….
DeleteSocial murder is what health insurance CEOs commit every year. Just because they wear a suit and tie…they are allowed to get away with it.
DeletePeople are dying due to lack of access of healthcare. Even if are lucky enough to have a good job that offers good healthcare packages, health insurance still screw people over. Including blue cross blue shield. People die every year in this country due to lack of access to healthcare. A human right we are denied over and over again in this country. THATS DISGUSTING.
DeleteFirst off, believe health care is a right and vehemently support universal health care. Second, I’m not losing any sleep over what happened but in also believe murder is wrong in all its forms.
DeleteWhat evidence is there that the board members are enriching themselves at the members expense? Board members are volunteers no?
MAKE HEALTHCARE PUBLIC AND FREE!
ReplyDeletenothing in life is free ...
Delete“nothing in life is free” the rich love you and that attitude. That’s why working people will continue to get screwed in healthcare. We are the richest country but have one of the worst healthcare systems. The rich pay less in taxes than working people. They exploit their workers and don’t pay them living wages while they ride around in yachts all day like Jeff bezos. These CEOs have a pretty easy pampered life. They don’t want you looking at how Europe does healthcare. Europeans are shell shocked finding out you have pay over $2000 bucks just to have an ambulance called out to take you to the hospital. Our healthcare system is inhumane.
DeleteIt’s always been silly that having access to healthcare is tied to jobs and just certain ones for that matter. The system needs to change. The USA is behind and we just handed the keys over to Ronald McDonald after losing Orville Redenbacher who wasn’t much better. We need a SYSTEM change. Capitalism does not belong in healthcare.
DeleteMark Fleming needs to be asked what he thinks of healthcare and if he thinks we should be profiting off our members healthcare needs? Should we profit off the sick for the sake of business?
ReplyDeleteHealthcare profiteers should be jailed.
DeleteAny ceo or board that doesn’t serve the public good should be jailed. If you are in a position of power and you are abusing it in order to profit. You are a criminal against humanity. DO THE RIGHT THING. PEOPLE HELPING PEOPLE. Those quotes solve a lot of bullshit in a complicated world that really shouldn’t be all the complicated. Help others. Don’t exploit people!
DeleteWe all just need to smoke a cigar and watch George Carlin. I wish he was still alive. His comedy is needed now in todays world.
DeleteAmen @8:33am
DeleteNot entirely germane, but HR sent out another email about opting out of the rule of 85.
ReplyDeleteNormally I would never consider such a thing, as I'm about 10 years out from qualifying.
But, given the way they have gutted the benefit, plus the fact that I'd jump if offered another job or a big severance package, I'm wondering if I should just take the extra $ in my paycheck.
North Carolina Blue Cross Blue Shield used to be a co-operative, not for profit...
ReplyDeleteIn my experience, whenever the credit union offers you something and says it's a lot better, it's normally not in your best interest to take it @12:32
ReplyDelete11:17 a.m. I certainly hope that's not true and don't believe it is, but the concern that has developed is that neither members nor employees know for sure...
DeleteThat's been the biggest downside in the "new/new culture" implemented by the SECU Board... nobody knows for sure that "Do the Right Thing" comes first without excuse or exception at SECU.
Strategic plans aside... continued erosion of trust is a sure-fire formula for failure in any business... the only question is "when?", not "if".