Wednesday, March 13, 2024

Risk-Based Lending (RBL) Was Introduced At SECU On March 1, 2023   The National Credit Union Administration (NCUA) has just released its 2023 year end "Peer Comparison" ratios - aka "Industry Standard" ratios - for the largest U.S. credit unions.

The "We Are SECU" Board introduced risk-based lending on March 1, 2023 in an effort to reach "industry standard" in lending. As you will note from the federal data below - in less than a year - that goal has been reached. 

 ✅ SECU now exceeds credit union industry standards in all lending performance and quality measurements:




"Delinquent loans/Total loans" (the percentage of the SECU loan portfolio which is delinquent) at 2.25% is over 3 times higher than the industry standard of  0.72% at December, 2023.  "Rolling twelve month net charge offs" at .62% are 44% higher than the industry standard (.62/.43 = 144%). "Delinquent loans and net charge offs" to average loans at 3.01% are way above the industry standard of 1.17%. 

You will also note that compared to December, 2022 , all of SECU's loan quality performance measures under RBL have "excelled"!

For critics of the "We Are's", the discriminatory nature and huge financial costs which risk-based lending impose on SECU members remain clear; and, it is kinda hard to argue with these numbers, isn't it?

All the trends are "positive"! So, much like the "negative growth" in assets, SECU now also enjoys a  "positive decline" in loan quality... well above "industry standard".