Monday, January 8, 2024

A Measureable Strategic Plan: SECU 2024  ... reestablishing a moral compass?

Wanted to give you some future benchmarks for 2024. True strategic planning enables a member not only to anticipate, but to also track progress on important SECU issues. Being transparent with members and being accountable to members has been a hallmark of SECU in the past. That no longer appears to be "Our Strategic Plan" at SECU.

You have read in the "2023: SECU's Blockbuster Year" post  [link here - 1/1/2024] an assessment of what has gone wrong over the last two years and in the "In Good Faith?" post [link here - 1/2/2024] a reminder of a critical problem remaining from the 2023 Annual Meeting. But that was last year, lets' take a look at what's ahead for 2024.

Issues to track in 2024:

1. Financials: SECU is confronted with soaring expenses, declining assets, rising levels of delinquency/loan losses, non-market rates on deposits, compounded by concerns over a decline in service quality. These are not issues, which once incurred, are easily correctable. The lowering of interest rates - it's a national election year folks! - may provide some relief in 2024, but not much. The first quarter historically witnesses a surge in deposits at SECU, as members receive tax refunds - watch for that. Official SECU quarterly financial reports become available on February 1, May 1, August 1, and November 1 - so you can keep score and judge for yourself whether progress is being made.

2. Risk-based lending - The SECU Board has to date refused to review with the membership the concerns surrounding risk-based lending at SECU. Management has threatened to extend race-based lending to home financing (mortgages and home equity loans) for all SECU members, which will tremendously impair the affordability of member home-ownership - not to mention the reputation of the Credit Union. Changing "their bias" may require much greater action all during the year. Watch for the fall out and a fall-off in the pace of lending growth - which is already underway.  

3. North Carolina Credit Union Division (NCCUD): The Division - including the Administrator and the N.C. Credit Union Commission -  is the primary regulator of SECU on behalf of the people of North Carolina. There has been a six month effort to have NCCUD clarify its' regulatory role, particularly in the area of bylaw changes. To date, the Administrator has been reluctant to be forthcoming. Look for increased levels of inquiry to NCCUD during February 2024 from other interested parties - including Legislators, other credit unions and financial institutions, and the North Carolina public and press. The next N.C. Credit Union Commission meeting is on April 9, 2024 at 10:00 AM, 205 W. Millbrook Road, Suite 105, Raleigh. The meeting is open to the public. 

4. House Bill 410 (H410) - The N.C. State Legislature will reconvene in a few weeks - for the 2024 "Short Session" - and will have the opportunity to consider any bills pending from the 2023 Session. One of those bills is H410 "Credit Union Updates", which was put forward to the Legislature as just some simple, minor changes to the laws governing North Carolina credit unions. That representation was not true, as H410 includes major shifts in potential membership eligibility, national expansion, commercial lending authority, and control of credit unions by their membership. SECU has been actively involved with seeking these changes without notification to the SECU membership. SECU has internal and contract lobbyists paid to push for passage of H410.  Legislative and legal objections from N.C. banks will be substantial. Opposition to passage will be fierce. Time frame will be February/March 2024.

5. SECU Board of Directors Election Rules - On 4/11/2023 the SECU Board unilaterally changed the rules for the nomination and election of candidates for the SECU Board of Directors. The new rules suppressed the ability for members to seek a seat on the Board and illegally disqualified fully eligible members from seeking a board seat. The current SECU Board can correct these errors by adopting new rules or returning to the prior rules. A correction in the rules must be adopted by the Board by early April, 2024. As members, we have two months to seek redress of this problem by the SECU Board. Hopefully, the new Board will act to correct this issue without further unnecessary embarrassment, reputational damage, and legal costs.

6. Midnight SECU Bylaw Changes - Last year the SECU Board unilaterally changed the SECU bylaws to control and limit member participation in the SECU Annual Meeting. 


You'll note that the bylaw changes were adopted by the SECU Board on 6/27/2023 and approved by the N.C. Credit Union Administrator on 6/30/2023 - and went into effect 6/30/2023! [The approval process usually takes up to six months.] There is much for the SECU membership to be concerned about with this process and with the content of these bylaw changes - which eliminate all member discussion, new business, and motions from the floor at the Annual Meeting. Fortunately the Legacy Board misjudged the members' determination to organize and to vote them out the door.  Within these bylaw amendments, approved by the CU Administrator in a midnight rush, one also finds numerous "new powers" which are not in compliance with current N.C. state statutes. Evidently the Legacy Board also misjudged its ability to effect the passage of H410 in 2023. If as appears clear, these bylaw changes do not conform with N.C. law; the SECU Board needs to rescind the changes as soon as possible - before we all experience yet another embarrassing, unforced error. Action by June is required.

7. 2024 Annual Membership Meeting - If held as in the past, the SECU Annual Meeting will be on October 8, 2024. Inaction by the current Legacy Board would suggest that a contested election will again be necessary - if members want greater transparency, more accountability, and better performance at their Credit Union. The next nine months provide an opportunity for members and staff to become better informed about "the why's and why not's" at SECU - and what is at stake. A better informed staff and membership will enhance the debate and discussion over the future of SECU.  An informed opinion helps everyone.

... nine months and counting down!