WNC heading for further problems...
As you know, this blog has long been a critic of the unfair, discrimination that the use of risk-based lending (RBL) imposes upon thousands of excellent, creditworthy SECU members who faithfully repay their loans.
The adoption of RBL by the SECU Board in 2023 continues, despite obvious evidence that it is a misstep - including a hasty retreat from a punitive 5-tier start. Lending delinquency and loan losses have tripled over pre-RBL levels. The underlying discriminatory impact of RBL on members of color, female or younger is well-documented. Even our CEO's recent college graduate daughter was marked as less than an excellent credit risk by RBL!
Now we have the future punishment by RBL of many WNC members whose credit scores will plummet as a result of their struggle to survive Hurricane Helene. SECU in the future will be charging many loyal members higher rates simply because they were in the right place at the wrong time.
Think this is not a real life problem for SECU members in WNC? Take a look at what FICO (the #1 credit score provider) has to say about how credit scores are affected by natural disasters:
💥 "Wildfires, floods, hurricanes, tornadoes, cyclones, earthquakes, volcanoes—natural disasters strike quickly and with little warning. While there is alot of good advice on how to prepare to protect your health and safety, you also need to prepare to protect your credit score to help your overall resilience and recovery."
💥"The fact that a natural disaster hit your region does not affect your FICO® Score, because data such as ZIP code or county is not considered by the model in calculating your score." [Sorry, our scores don't consider your "local" problems!]
💥 "Credit scores are impacted negatively by consumer behaviors, such as missing payments, charging credit cards up to or over the credit limits, or opening several new credit accounts over a short period of time. All things that could possibly happen to a consumer’s credit profile during a disaster if they are not prepared. "
💥 "The lender may include comments in your credit report about any special payment arrangements because of a natural disaster when they send an update to the bureaus. The FICO® Score does not consider such comments when calculating the score"
💥 "Have a vehicle loan? Damage to your car or truck does not eliminate your responsibility to make your loan payments."
💥 "You may be subjected to over limit fees for exceeding your credit limit. This could have negative repercussions on your credit as your score may continue to drop as your balances get closer to your limits."
💥 "An unintended late mortgage or credit card payment could cause the greatest damage to your credit, on top of fees and a possible increase to your interest rate. If you cannot cover the amount, due to loss of employment or delay in a deposit, fees may be added on top of the missed payment ding."
The SECU Board can and should act to eliminate this unjust penalty on Western North Carolina members. Why? Because it is the right thing to do; and, SECU is a member-owned, not-for-profit, North Carolina-focused credit union ... or once was.
... or the SECU Board can "Let "them" eat cake"!
And the passengers on the Titanic should have been more careful.
ReplyDeleteDon't know about rbl but no arguing poor lending is running amok at secu. Board needs to step up
ReplyDeletePoor lending is a huge problem and has been for quite some time. I can't believe some of the approvals I see.
DeleteAnd how does SECU handle this? Well, they reward their Cheif Lending Officer by announcing her as the new NC Press CEO of course!
Deleteis secu still going to close down the press and greater kinston credit unions
DeleteBeing the volunteer CEO of NC Press I.e. more work for no more money is definitely a reward 🙂
DeleteHas credit union announcedit will not report deliquency for asheville members/
ReplyDeleteWouldn’t creditors need to know someone isn’t paying their creditors as agreed, even if it’s due to a natural disaster? Why shouldn’t the fact that they aren’t paying as agreed to others impact the lender’s risk decision as well as pricing of the risk? If someone stops paying their mortgage and car loan because they lost their house and car, wouldn’t a new lender be taking on outsized risk by extending additional credit for a new car or house to this borrower?
DeleteFICO scores are nonsense... I read why my number gets nicked and just shake my head at the stupid remarks ...
ReplyDeleteToday, Experian dropped my score 25 pts because I paid the last of my 2 cc balances of $200 each. This is first time both cards have no balance due. Obviously, I can make payments on time. Why would I be less credit worthy now that I have more disposable income. I still have the same credit limit. I still have hel and mortgage payments and no late payments.Hel rate is better than any credit card, but Experian wants me to get high rate credit card to boost my credit? What is there agenda...credit cards, insurance?? Credit history and debt to income should be sufficient to judge someone's credit worthiness. Waiting to see what FICO does once they update my balances ... Charity
DeleteExactly ... you're being penalized for being responsible ... so what is their motive?
Deletewell we know ... $$$$$$$$$$$$$$$$$$
The time is always right to do what is right.
ReplyDeleteand "there is no right way to do the wrong thing!"
DeleteCredit scores are just a legal way to fleece the flock ...
ReplyDelete"You can avoid reality, but you cannot avoid the consequences of avoiding reality."
ReplyDeleteAyn Rand
Stein seems to get it. https://www.newsobserver.com/news/politics-government/article298660493.html
ReplyDelete