Commenter: AnonymousJanuary 27, 2025 at 8:22 PM
"So LGFCU, a strategic partner of SECU since it was forced to break off into its own entity, has offered its members commercial lending for decades. They have been successful. Are you saying SECU’s strategic partner (soon to be ex-strategic partner) somehow had the ability to learn the business, but SECU does not?"
✅ Readers have grown to question the authenticity and accuracy of some commenters (an anonymouse enjoys full protection from accountability!) But many statements just don't make sense or just don't add up. But let's accept this comment as accurate (perhaps even the "forced" out remark!) and see how LGFCU and CIVIC have "succeeded" in commercial lending "for decades". Need to look at both credit unions since they are (and have been) one and the same - LGFCU is now known as CIVIC FCU.
Apologize for being "officious", but here are the official financial #'s. According to NCUA: LGFCU at 12/31/2023 [12/24 not yet available]:
As you can (barely) see over the "decades", LGFCU - with a membership of 400,000+ - now has a total of 470 commercial loans and lines of credit, out of 166,210 total loans of all types (after "decades" of trying) - which is @ one quarter of 1% of loans . Balances are < 5% of total loans. The average loan is @ $370,000+ - not exactly your small, "basic", mom-and-pop business loan.
As to CIVIC : The credit union was formed seven years ago in 2017. In those seven years, CIVIC has attracted 7,600 members and has 48 commercial loans out of a total of 2360 - @ 2%. Balances are @$23 million (@23%) with an average loan balance of $479,000 - mom and pop are doing well!
Been trying to ask the SECU Board for over three years: What type of commercial loans do you intend to offer? Where? In what amounts? Why? Have you done your homework - independently?
😎 Guess the next question is: "If LGFCU/CIVIC is a reasonable comparison, is the cost of offering commercial loans to 1/4% of the SECU membership (@ 40,000 members) a prudent investment? Will 1/4% be our measure of success after a couple of decades, too?
... we gonna outbank those "know nothing" bankers, for sure!
"Pride goeth before the whatever"...
So LGFCU has or has not successfully run a commercial lending program for decades?
ReplyDeleteWhat do you say?
DeleteI would say yes. They sure have lasted longer doing commercial banking than Goldman has doing consumer banking.
DeleteGot "one of those" rants in response:
ReplyDelete"Several points you might consider:'
"1) Do you know CIVIC's and LGFCU's strategy? Are you assuming its a volume maximizing strategy? Who said mom and pop? You are implying it's successful without knowing yourself what their strategy is."
Etc, etc, etc for about three pages... will spare you the misery and myopia.
The commenter is correct that I do not know the strategy of LG/CIVIC.
But, that was not the point, nor the question
The question is does SECU know what it is doing - not LG/CIVIC!!! (And please spare me from directing me to the SECU Strategic Plan for guidance - one find's nothing of substance there.)
Only displayed LG/CIVIC's NCUA commercial portfolio results because it's in the msame state, governmental employee based, similar economic circumstances, use the same branches/1983 technology. Might give SECU mavens some insight into what success might look like for an SECU program.
Maybe not. LG might have poor products, service, or rates; they may not be good at commercial lending; that pent up demand for "hamburgers' may not really exist. N.C. banks might actually know what they are doing and be good at it.
As a prior day commenter said "Who knows?"
6:41pm And then there was also this:
Delete"I acknowledge we both don't know LGFCU's strategy, but I can speculate too, but with a few more thoughts and data.. These are likely long-term consumer members that owned businesses, but had funding needs that outgrew a basic checking and funding their business on their cards and HELOC. The most successful CU's in this space serve their own existing members that own businesses. From what I see, this looks like a successful strategy for them."
Well, some actual facts might help us all.... the commenter likes to speculate (without much basis). For folks familiar with LG/CIVIC, most know that the #1 reason for those high average commercial balances is this [https://www.civicfcu.org/fire-lending]... firetruck loans! (They don't come cheap!)
The LG Board and Maurice Smith carved out a "unicorn" strategy for N.C. fire departments 15 years ago... they weren't trying to be "industry standard" either.
Sorry to disappoint our serial speculator - "the thoughts" were few, the "data" less - but now you know.
"N.C. banks might actually know what they are doing and be good at it."
ReplyDeleteand they won't take kindly with meddling into their business while avoiding paying taxes... they have deep pockets and it's not always what you know but who you know.
It would take an act of Congress to get rid of the CU tax exemption. You know why the saying “it takes an act of congress” means it’s very difficult don’t you? It would be political suicide to do so though since it would impact a whole of of their constituents. But stranger things have happened. If it does happen, then SECU will adapt and change charters to benefit members.
Deletepay attention things are moving fast now-a-days ...
Delete"... then SECU will adapt and change charters to benefit members."
Deleteyour end game confession perhaps?
7:17pm CUTimes: Carrie Hunt, America’s Credit Unions chief advocacy officer, said ACU has been paying attention to this new threat for a while.
Delete“Once we started seeing tax discussions happen at the end of last year, and there were whispers on Capitol Hill, we knew that credit unions’ tax exemption would be on the table,” she said.
"We have to make sure we are being consistent and constant in talking about the credit union difference."
"... benefit members".... yeah right ...
Delete"There is a difference" ... as least I thought ... at one point ... maybe?
DeleteA lot of large credit unions have figured out that there is a segment below big bank corporate and business banking that is underserved, overcharged, or both. We do quite well with our rates and fees competing against for-profits.
ReplyDelete7:29pm See 7:54pm above.
DeleteDo you think it wise to brag that your non-profit credit union "does quite well" competing against "for profits"?
It's not the "big bank corporate" which are angry about the situation. It's your smaller, local, politically powerful, hometown banks.
But keep at it, I'm sure the American Bankers Association will be calling you up for a quote... and selfie.