... There is a Difference!
Probably tired of learning about "financial deserts" and some of the other political/legal "ins and outs" which will affect your credit union.
✅ H.187 proposes substantial changes in the laws governing North Carolinas' credit union. All of the traditional restrictions on membership, commercial lending, and many cooperative, member-ownership and control rights are being eliminated.
Many large credit unions seek bank equivalent powers to further fuel ambitious expansion plans. This focus on growth has created an uproar at the national level over the fairness of the tax exempt status of credit unions. Historically, the number one complaint of the banking industry has been "the tax exempt" push of credit unions into commercial lending - the "bread and butter" business of banking.
😎 Note below that H.187 eliminates any constraint on commercial lending by N.C. credit unions and will permit unsecured commercial lending without statutory limitation
❇ Existing law: § 54‑109.27. Societies and other associations.
Societies, and copartnerships composed primarily of individuals who are eligible to membership, and corporations whose stockholders are composed primarily of such individuals, may be admitted to membership in the same manner and under the same conditions as individuals, but may not borrow in excess of their shareholdings. Provided, however, secured loans in excess of shareholdings may be made to nonprofit societies, copartnerships, and corporations who are members. (1975, c. 538, s. 1; 1979, c. 809, s. 1.)
❇ Proposed H.187 law: § 54-109.27. Societies, corporations, and other entities. Societies and partnerships composed of orcontrolled primarily by individuals eligible for membership, corporations owned or controlled by eligible individuals, and other business entities owned or controlled primarily by eligible individuals may be admitted to membership in the same manner and under the same conditions as individuals." [shareholding/secured limitations removed].
🚩 Isn't it risky - if not reckless - to wave a red flag at a bull!
... yep, pretty "bullish"!
Can federally chartered credit unions already do all of the things you say this bill would allow state chartered credit unions to do? Are secu and other state chartered credit unions currently operating at a competitive disadvantage to both banks and federally chartered credit unions due to different sets of rules?
ReplyDelete12:29pm Your credit union was not established by the member-owners nor by NC law to compete ("competitive disadvantage") with banks nor other credit unions. In fact your credit union wasn't established "to compete" with anyone!
DeleteWhose "mission/purpose" is that? Where did you come up with that goal? Is it anywhere in your charter?
If your credit union had been established to "compete" against banks would you have been given the tax exemption?
If you're claiming you should be allowed to "compete" for anyone and everyone's business (open membership) on a "level playing field"... isn't that tax exemption a "competitive disadvantage" to your "competitors"?
I regret you "don't get it", nor the costly hole you are digging for the current member-owners of your credit union.
Now if your members want you to become a bank, well... but you might want to let them vote on that idea, before you jump off a steep cliff sans parachute.
1229 bankerboy!
DeleteA commenter [think it's that person folks are labeling 'bankerboy(girl)"] has challenged saying: "You didn't answer the questions in 12:29pm"
ReplyDeleteGuess that is about the "competitive disadvantage" to banks/federal CUs that H.187 will resolve?
Thought I had addressed it by saying that CUs were not created to compete against banks or other CUs.
Guess the real question is "Are you saying that "the different sets of rules" between banks and CUs should be eliminated?"
Banks and CUs should have the the same rules and requirements to eliminate the "competitive disadvantage: state-credit unions now are suffering under?
you didn't address it. CU's were not created to compete with banks. no one disagrees, but continuously pointing that out doesn't address it. 90 years later, CU's compete with banks for the loans and deposits of their own members, whether they like it or not. especially those as big as SECU. That's the point you're missing. Not sure why you don't understand that.
ReplyDeletewe compete with banks and other credit unions
DeleteDo I personally care if we offer business lending, no as I do not have a business. Should Credit Unions care about offering business lending, yes because some members have businesses
ReplyDelete10:24pm What about those 100,000+ SECU members who wanted tax prep services?
ReplyDeleteDon't mean to put you on the spot... just asking!
What about them? What about the 2.5 million members that want netflix? should we start a streaming service to serve them?
DeleteInteresting point. You support tax prep services and claim the membership wants them but on the other side of your mouth you denounce the rewards card
Delete12:32 pm Actually it was 100,000 SECU members who supported tax prep wasn't it?
DeleteAs to a rewards cards, think we all agree that it's not the best card for SECU members who carry a balance - @70% of your current credit card holders.
Will be very difficult to get SECU members with a rewards card elsewhere to switch... but will be easy to track.
SECU had 341,500 low cost, non-rewards credit cards at end of 2024 with balances of $1.2 billion.
Let's see how you do!
We don't agree it's not the best for those that carry a balance. It's not that simple. It depends on how much of a balance they carry, how long they carry it, and how much activity the card has.
Delete6:44pm Great! please share with us how members should decide when the low cost, no rewards card is best for them.
DeleteHow many of your 341,000 existing members are you advising to switch ?
Many will be tempted "by human nature" to switch to the higher cost rewards card... how are you educating them on making that decision?
You have years of historical credit card data to show members if they will be hurt. Y'know financial literacy...
You always seem to forget about the 2.5 million members that don't have a card with SECU. Data provided before shows SECU has the lowest card penetration within its membership among comparable credit unions.
ReplyDelete