Thursday, May 2, 2024

SECU RBL - Whose Side Are You On?  ... whose point of view?

As with most things in life, there are two ways to look at a loan - from the borrower's point of view and from the lender's point of view. 

For borrowers, the hope is that a loan will help improve their lives - better house or car, educational opportunities and braces for the kids, pay taxes, dream cruise, fix the fridge, keep the lights on.  Borrowers come to lenders with a goal, with a purpose. They don't just drop by to enjoy "the experience"!  

In banking, the purpose of the lender is to make a profit; at a credit union the purpose should be to make a difference.  

Borrowing at a bank is an "adversarial transaction". The banker and the  borrower have different purposes. The goal of the banker is to make the most profit possible from the loan for the bank - nothing wrong with that. The bank borrower wants the best terms and lowest cost possible. In commercial banking, both banker and borrower are generally financially knowledgeable and skilled in negotiation. It's a "fair fight".

At a credit union, the goals of the borrower and the lender should be the same.  After all, the loan officer works for the members, who own the credit union. And, the credit union was created not to profit from the membership. In consumer lending, the credit union loan officer is generally more financially knowledgeable than the borrowing member. Members rely on the loan officer to represent their best interests, to craft the best solution for their loan requests - to "Do the Right Thing". The transaction should be one of trust, not adversarial. SECU no longer seems to understand the meaning of trust.   

The credit union loan officer should seek only to make a sound loan which is of benefit to the member - and which will be repaid without hardship by the member.     

So, from yesterday's post [link]: "If a loan defaults at SECU and a loss occurs, who made "the bad loan" - the member or SECU?"

😎 "The growing lending snafus - costing you as an SECU member over $100 million+++ per year - is not a minor fiduciary matter." 

"Somebody's" not doing their job - responsibly! Every member is losing...

... RBL $100 million+ losses is "Really Bad Lending" from every members' point of view!