... which is it?
Hope yesterday's post [link] was enough to convince folks that business accounts are - and have long been - available through North Carolina credit unions. Wasn't the original idea behind most N.C. credit unions; and most like SECU, chose to remain focused on the much greater challenge - serving well, the individual member.
You might also like to know that SECU and most credit unions have always made some "business loans" in N.C. Most small business entrepreneurs "start small" as a second job, gig or hustle. Those "start ups" are financed almost always by personal credit cards or perhaps a home equity loan. These personal lines of credit are in reality small business loans, but no one - including the banking industry - makes a big deal out of them.
In fact, credit union regulators don't require that any loan less than $50,000 - regardless of purpose - be reported as a "business loan". Nobody has told you that have they.
✅ So why all the controversy on the wide open expansion of commercial/corporate lending in H.187? Why are many traditional credit union advocates - and the banking industry - so concerned?
✅ Because they see what is happening with credit unions nationwide!
❋ As of December 31, 2024, there were 4,455 federally insured credit unions [down from a peak of 23,000 CUs] with 142.3 million members.
❋ Credit card balances grew by $3.2 billion, or 3.9 percent, to a total of $85 billion at the end of 2024.
❋ New auto loan balances declined by $11.1 billion, or 6.3 percent,
to a total of $164 billion at the end of 2024..
❋ Used
auto loan balances contracted by $5.5 billion to a total of $317 billion at the end of 2024.
❋ Commercial loans excluding unfunded commitments increased $16.8 billion, or 10.7 percent, over the year to a total of $174 billion at the end of 2024.
😎 Are you surprised that nationwide credit unions have made more commercial loans [$174 million] than credit card loans [$85 million] to 142.3 million credit union members?
😎 Are you surprised that nationwide credit unions have made more commercial loans [$174 million] than new car loans [$164 billion] to 142.3 million credit union members?
😎 Are you surprised that nationwide credit union commercial lending is growing four times faster (10.7%) than total credit union lending (+2.6%)?
... is this what you want North Carolina credit unions to become?
Does it matter what the members of SECU or other credit unions want? The SECU Board and leadership has demonstrated repeatedly over the last 3 years that they do not care. They are determined to implement the policies that serve the elite. The business lending department is in place, the huge legal department is in place. Centralization is in place. All that is needed is the green light from the NC legislature and our money, the members' money, will begin flowing to commercial businesses and out of this state. Oh and taxfree for now.
ReplyDeletesummed that up pretty well ...
DeleteIt seems like there is a demand for business lending considering the numbers.
Deletewas for tax services too
DeleteWhy do you assume commercial loans will be made out of state? (Except for existing members that own a business but don’t live in NC).
ReplyDeleteWhy wouldn't they? Profit is your MO ...
DeletePerhaps a better use of H187 would be to allow state-chartered credit unions to have private share insurance since there is a lot of uncertainty with NCUA following yesterday's removal of 2 board members.
ReplyDeleteI’m not sure it is fair or accurate to say credit unions weren’t created to compete with banks. Banks were purposely leaving a void in the credit markets. Credit unions weren’t created created to help bridge that gap, but I don’t remember seeing anywhere that there was a non-compete clause included. Does Goodwill compete with Walmart? Absolutely they do, and they both know it.
ReplyDelete12:08. Agree 100%, but also don't see why the question is even relevant. Does it matter what CU's were created for over 90 years ago? FOM rules and the like have been legally changed and evolved. Simple reality in modern times is that CU's, including SECU, compete with banks. Folks can just choose to ignore that fact - all the while banks make money off our member owners.
Deleteyep! They do. why don't you take the best care possible of members with the best consumer oriented policies? let the Banks handle the businesses, which they do well because they have the know how. SECU is not demonstrating the best know how on their area of expertise at the moment. How on earth are they going to manage business loans well?
Delete12:08 bankerboy lower our loan rates and up the piddling savings rates. don't try something else when failing on what you got.
Delete