... "only you" can join!
So let's start the process of looking at what is going on at the national level with credit unions and how that may affect SECU and its' members.
Think we all agree that credit unions for the most part started out as small savings and borrowing cooperatives generally associated with a single employer and viewed as an employee benefit. [link for background references] Or were formed by small local groups who shared a common interest - called a "common bond"- such as a church, social club, or community group. Whatever the "common bond", the themes were small, local, "knew each other" and the goal was access to affordable credit. SECU fit the employer benefit model.
Over the last several decades, businesses throughout the U.S. economy have consolidated. "Local" businesses were either swept up or swept out by the advent of Walmart, Home Depot, Amazon, and "chain" stores of all varieties. Consolidation and mergers sought greater efficiency in business operations and promised greater variety and lower prices for consumers - who could argue with that? "Local" lost out!
The closing of "sponsor companies" and the increasing complexity of regulation led to the merger of many credit unions. But some credit unions simply believed that "bigger meant better". North Carolina credit unions you now know as Allegacy, Skyla, Marine and Ft. Liberty; once served only the local employees of R.J. Reynolds, the City of Charlotte, and members of our Army and Marines. Not exactly "businesses" which are shrinking. Anyone on the planet can now easily join anyone of these credit unions - there is no real limit any longer on membership should a credit union so choose.
But don't jump on those guys! Limited credit union membership is now uncommon, especially among large credit unions all across the Country! Here take a look [link CUs anyone can join].
The SECU Board appeared to be heading full force toward open membership after 2021. The Board hired lobbyists in 2023/24 to push for passage of legislation which would permit all North Carolina credit unions to adopt open membership ("House Bill 410") - including any business or corporation in the U.S.
Would open membership, including all business entities, be beneficial for existing SECU members?
Whaddayathink? Why?
Yes, open membership would be beneficial for existing membership. I keep hearing that only 1 in 5 members are state employee, and the current eligibility is pretty expansive. Hard to argue that as we evolved from 4 out of 5 members were state employes, that it harmed existing members in any way. Growth may not be an objective, but open membership creates a larger, more diverse membership base, it drives scale, which enables more investment in products and services, etc. We believe strongly in the model as an alternative to banks, and helping more people aligns with the mission. Including all businesses is a bit of a different questions. First, we need to be in that space to serve EXISTING members that own small businesses. Then why not open it up new business members. Like consumer, it's about value and impact. If SECU is good for 2.7 million members, it's good for 3.5 million too.
ReplyDeletethis 1 in 5 stuff is crazy. They are family members or were themselves state employees or teachers at one time, maybe not now. I bet every member can tell you what the connection is to a state employee or teacher that enabled them to join.
Delete@7:34 I promise you that's not true. Our membership now is totally different than it was 30 years ago. Most of our members have no real tie to any state employee in any. meaningful way. They don't work for the state, their parents don't work for the state, their siblings don't work for the state. Maybe their grandfather did 20 years ago.
Deletewell 5:35, it's good to see you've ripped off the veil of your intentions (about time you quite hiding), globalism seems to be your plan for wealth & power (for mgmt & consultants)!
DeleteGlobalism has done nothing but wreck our local NC communities. Leave our credit union. Go elsewhere if your goals are to outsource and make profit. That’s not needed here
DeleteFlowery words @5:35
DeleteGood lord…they are letting their intentions show. Do we really need to be lending to big business? This does not need to be a credit union for businesses. It’s a credit union built to serve people with modest means.
DeleteWill allowing everybody to join enable SECU to pay competitive savings rates to existing members?
ReplyDeleteIf SECU is not "at scale" with $50 billion in assets, what size will you need to be to lower your rapidly escalating costs?
Does SECU have the existing expertise to serve business customers? How much will it cost to add commercial lending services?
How many small business owners do you anticipate adding in first year? By the fifth year?
You're not just "winging it" again are you? You do have "proforma business models" that you have presented to the Board for approval, haven't you? The Board has approved measures of success and failure on the commercial venture, haven't they?
BTW, where did you find that your "mission is helping more people"? Isn't in your bylaws,nor charter. When did you make that up? Shouldn't you be serving your existing members better, before trying to serve more folks at "industry standard"?
Wouldn't "helping more people as a mission" with open membership mean you intend to serve everyone in the world? Do you have any limits to your "excess"?
What new "products and services" will you be able to add if everybody can join? Be specific. At $50 billion, why can't you add them now?
Your comment reads like a group of marketeers at a yacht party... just sayin'!
Is there a downfall to having a credit union that everyone in a country, or even world, is a member of (aside from non-credit union dislike)? Do you not think we share any common bonds as members of humanity?
DeleteDefine what a NC state employee is.
Delete7:54pm YES there are plenty of downfalls for existing members. But the question is what would the advantages be?
DeleteStop ducking... how will SECU global domination benefit the current member-owners?
I’m not sure global domination is the goal (I’m not an SECU executive, so maybe I’m wrong). Having a more diverse set of experiences and knowledge via a broader membership allows for more creative and effective financial solutions. Counter question, why limit your membership and its underlying knowledge base if doing so could also potentially hurt existing members via a lack of innovation and/or insight?
Delete8:21 pm This commenter helped write the strategic plan! ".. a more diverse set of experiences and knowledge via a broader membership..." A Jumbo Mumbo!
DeleteComment seems to lack logic, counter question seems to lack snse.. say what?
"I’m not sure global domination is the goal (I’m not an SECU executive, so maybe I’m wrong)."
DeleteWell you are the one who brought it up ...
So are you a consultant who's going to "profit" from pushing this agenda?
"Define what a NC state employee is."
Deleteoh boy here we go ........
Sending jobs out of NC is the push right now! It’s sad to say at this rate SECU will be paying workers out of state in the way of vendors and contractors more for lower service for the members! No plan to keep any in house jobs over the coming years. Frustrate you to leave, be fired or forced to retire! That’s the current atmosphere for the last 3 years! Latino and Civic are winners in this race that rids SECU of good employees. My last day is coming up, I am taking a position at Civic! Hate to leave my staff and I’m wishing them nothing but the best!
Delete@9:47 that comment is not mine. I’m retiring and have accepted employment at Civic. I love SECU. So please, all readers, don’t assume it was me.
Delete2:06pm Have known Lee a long time; you can take him at his word. Good luck at CIVIC.
DeleteLee - methinks you protest too much
Delete7:17... would allowing everyone to join allow us to pay competitive rates to everyone? of course not, and it's an irrelevant question on the topic. what we pay on deposit rates is a simple choice of how much capital we want to hold, or how we use our members capital. That would be true with 100k members, it's true now, and it would be true with 5 million members
ReplyDeleteIndicating that paying competitive rates is solely a function of capital is not sound financial reasoning, but that reasoning does seem to hold sway among our "new/new", "the most profitable year ever" view of the purpose of SECU.
DeleteDo very much agree with your sound statement that being able to pay competitive rates with 100k members is the "same game" as with 5 million members!
Therefore would recommend that you work harder on paying competitive rates for the current member-owners, instead of trying to pay non-competitive rates to even more people.
Obviously the level and relationship of deposit and loan rates drives the margin and is the main driver of net income. The amount of net income needed depends on the desired capital ratio and the rate of growth in assets. If capital is too low and you need net income, you lower deposit rates, or keep them flat and let loan rates grow at a higher rate. Capital too high? Do the opposite. (That’s what was done over the last year or more, BTW. You’re going to talk about one of year of net income til the end of time I guess, but you should get caught up. How much net income did we have in 24 and how does that compare to a few years back?). Anyway, Pretty simple concept. Sure, competitive position is a factor, but at least in your opinion deposit rates, apparently that isn’t being taken into consideration. Less than 1 in 5 members have a money market account and about 1 in 6 has a CD. We serve hundreds of thousands members with no savings - they’re aren’t really sensitive about the deposit rate we’re paying you. We should open up membership, save members money, and help them save.
Delete9:12 am Apologies to readers for subjecting you to another paragraph of excuses trying to explain a previous paragraph of misstatement which was trying to fabricate an opinion out of thin air while ignoring the facts... hope this will be the last of the blah, blah, blahs.
DeleteLike watching a pinwheel spin in the breeze...
All the people who are "sensitive to the deposit rate" have moved their money out of SECU!
Delete@11:35 This!
DeleteSo always long on the criticism and short on the suggestions, solutions, analysis, etc. Tell us why open membership is bad? Stop ducking. Tell us how it will harm existing members? Tells how other credit unions that have open membership harm their members.
ReplyDeleteRegarding business services - let's acknowledge this is something you have no experience with. Do we have the expertise? Yes, absolutely. I appreciate that someone who never worked anywhere else wouldn't know the first thing about it, but we have people at all levels who have experience and expertise serving this segment when they worked at other banks or credit unions. And, it's not rocket science. Further training and capability will be needed, but would part of an implementation plan. It's a very solvable problem - credit unions one tenth our size with a sliver of the sophistication have figured it out. We can too.
ReplyDelete11:27pm Another mouth ahead of mind comment?
DeleteAssume you believe that all the folks who helped operate a multi-billion $$$ SECU successfully for 85 years "had no experience with" business? Doesn't that comment sound a little silly to you?
Do you also really believe that the costs, prospects, and impact of business and commercial services/lending at SECU weren't thoroughly reviewed by Board and staff on several occasions in the past? They were.... the written, factual record is there in the official minutes of SECU. You're firing off wildly and erroneously - shooting from the lip...not helping build a credible case!
The concern over the move to commercialization
of SECU is - much like this comment - that the issues have not been formally re-analyzed nor presented to the SECU Board - check the record, ask the Board members.
The continuing costly snafus occurring with consumer lending, delinquency, and loan losses - an area of great expertise in the past at SECU - would indicate that a "it's not rocket science" attitude toward adding business/commercial services has a strong whiff of potential future failure.
You do recall that 3 of the top 25 banks in the US failed in 2023....apparently none of the 3 had their own demise in their strategic plan! Guess they thought running a commercial bank wasn't rocket science too.
BTW, would also suggest to you that commercial banking is rocket science last time I checked... only an amateur might think differently.
There’s a big difference between intelligence and wisdom...
DeleteWhy not just stick to our roots and continue to do what we’ve done for 85 years? I still don’t understand why we are pivoting with our long track record of success
DeleteHow does these changes benefit the existing employees at SECU? That’s a question I never get answered because we all know these changes will not benefit our existing staff
DeleteSo when these small business' fail who bails them out?
DeleteAccording to data from the Bureau of Labor Statistics, as reported by Fundera, approximately 20 percent of small businesses fail within the first year. By the end of the second year, 30 percent of businesses will have failed. By the end of the fifth year, about half will have failed. And by the end of the decade, only 30 percent of businesses will remain — a 70 percent failure rate.
@12:43 they won’t answer that question. They do not give a f*** about the workforce. They just want people to shut up and not question these changes.
Delete3:06 that’s a failure of the capitalist system. Unfortunately the credit union has to operate within the confines of an oppressive system that is geared towards oppressing the working class and helping the rich. Noticed the government only bails out big banks and large corporations and never helps out the little people? Maybe our system all together as a society is flawed and needs a complete reorganization where the working class is in power. Maybe our society shouldn’t set up working class people up for failure? Small business loans to the members I can entertain because you are right…where do working people go to for help when society has let them down and it’s usually SECU. But I get the feeling commercial lending is more than just small business loans to our local membership…I get the feeling there is more behind that curtain than you are leading on.
Delete11:27pm The commenter did of course respond at length but here was the most most important insight added: "... no dispute the board hasn’t seen this yet.... but the people that matter will see the business case and will make it successful. "
ReplyDeleteHope the member-owners of SECU are still considered to be "people that matter" by the SECU Board.
These people are so robotic
Delete“People that matter”
DeleteIt's a big club and we ain't in it ...
Delete