Future getting testy?
✅ Most SECU members received an email from our CEO, Ms. Leigh Brady, requesting that we write our elected representatives about preserving the tax exempt status of credit unions [May 1, 2025 at 6:58 PM]. Political pundits call this type campaign "astro-turfing" because its manufactured - not really "grassroots" politics, but...
Yesterday Todd Harper, former Chair of federal regulator NCUA, didn't mince any words [link]. in pointing out his view of the growing array of failures by credit unions to stay on mission - "People Helping People". Even some state legislatures have begun curbing the tax-exempt status of local state credit unions [link].
😎 What has caused this apparent "change of heart" among our political leaders and seemingly among the public - and many credit union members? Is it that...
A: ◻ Credit unions are using member money to buy multi-million dollar naming rights to stadiums and Super Bowl ads?
B: ◻ Credit unions are using member money to buy commercial banks nationwide at prices above book value? [link]
C: ◻ Credit unions are often circumventing legal restrictions in order to serve anyone and everyone - including major commercial corporations?
D: ◻ Credit unions now hold twice as many commercial loans as member credit card loans?
E: ◻ 'Credit unions no longer stand for cooperation, service, and economic justice; the political class knows the truth, can smell the rot?" [link]
F: ◻ Credit union democratic practices and member participation are being marginalized, often eliminated?
G: ◻ Credit union members can no longer tell the difference between a bank and a credit union?
H : ◻ The Carolinas' Credit Union League (CCUL) has pledged to the North Carolina Legislature [as with H.410 in the prior session!] that H.187 is just "a minor Update"?
I: ◻ All of the above?
Once "anything goes"... "everything goes"!
1) credit unions aren't circumventing rules to serve major commercial corporations. Just false. Provide one tangible example.
ReplyDelete12:49pm H.187
DeleteDo I understand correctly... the NCUA board had been comprised of 2 Democrats and 1 Republican, but is now led by 1 Republican?
ReplyDelete2) credit unions hold twice as many commercial balances than credit card balances, not loans. The number of commercial loans held by CU's is a small fraction of the number of cards and other loans.
ReplyDelete12:52pm Glad we agree! Credit unions are increasingly focused on commercial lending...
Delete"... according to the NCUA, commercial lending by credit unions now exceeds $174 billion, topping both total credit card lending [$85 billion] and total new car lending [$164 billion] - that's all CU card/new car loans for 142 million members!"
Twice the year end balances on commercial loans $174 billion compared to the $85 billion balances on credit cards to 142 million members.
3) banks acquire banks above book value. Literally no one pays book value.
ReplyDelete1:00pm Agree there too. There are two questions:
Delete1) Is it a fair price? No one can tell, the terms of purchase are not disclosed. The lack of transparency should be a concern of members - it's their money! Why wouldn't a CU disclose the terms? Get ready to hear of "less than arms length", insider deals!
2) Why is a credit union buying a bank (often out of state) in the first place? Would you support SECU buying a bank?
Yes, would totally support SECU buying a bank. We have the capability to build MBL organically, but growth would come much faster if we bought a commercial bank. Also need more scale to drive efficiency.
DeleteYou need competent management and a good board to drive efficiency. Bad management will drive up operating costs every single time regardless of size.
Delete2:16 of course you would, you're from the banking industry ...
Delete6:17. Yep, and we need more of that type of thinking around here.
Deletewhat will happen 6:17 is SECU will by a bank and all it's talent and technology and you'll be without a job ... be careful what you wish for ...
Delete4) credit union member engagement is not diminishing or being marginalized. You may think that at SECU, but this statement is false about the industry and can't be supported by facts. Question: when SECU members could speak at meetings and bring resolutions, why were voting numbers so low?
ReplyDeleteConsumers don't join credit unions to participate in a democracy, they do so for better rates, lower fees, and some general purpose alignment. They derive benefit from being a part of a non for profit cooperative, but it's not why they join.
1:11pm Believe there is ample proof that SECU members have been marginalized over the last 3 years, whether its midnight bylaw changes, inability to speak at annual meetings, disappearance of loan review committees, secret shoppers, no documented advisory board minutes nor summaries reaching the Board, a CEO and Board in hiding from any public dialogue with members, and still no answer to procedures for membership resolutions for the 2025 annual meeting... seems to be a pattern here, don't you think?
ReplyDeleteNot quite sure how to answer your question: "Question: when SECU members could speak at meetings and bring resolutions, why were voting numbers so low?" Guess I would say that if allowing members to speak in the past didn't cause any problems - which you're right it didn't - why was it banned?
Don't agree with the last paragraph. That it is not accurate is best reflected in the fact that 100,000 members chose to participate in the annual meeting last year. Wouldn't you be pleased if 500,00 participate in 2025? If SECU no longer believes that democratic principles underlie all that SECU is... maybe we all understand what the problem is...!
Sounds to me that SECU is serving its own interests. Probably should be taxed.
DeleteI’m responding to the comment made at 2:16…I’m no expert, but I’m fairly certain that the intended purpose for credit unions is not to buy banks. This seems like a very, very big leap from the purpose of credit unions. No wonder why the banks are up in arms.
ReplyDelete2:40. The intended purpose to help people of a common bond and modest means. Not sure framers envisioned CU's having wealth management businesses and doing $2 million jumbo loans, either. SECU is basically a community credit union - less than 1 in 5 are state employees. 2.5+ million members have been acquired over time. Most of them were and still are bank customers. FOM rules have evolved. Why not just acquire a bunch of members at once thru merger? if we don't recognize the economic realities of the industry, who we really compete against, and the market dynamics, we'll die a slow death. Some think we're still in 1985. We're not. We can't even change a core platform. We should buy a bank with better technology.
ReplyDeleteHeadline: Collections on defaulted student loans may affect millions of people's credit scores
ReplyDeleteGreat news for Tier Based lenders!
1:11 pm comment - stop dreaming. SECU has not had better rates in over 2 years.
ReplyDelete"If freedom of speech is taken away, then dumb and silent we may be led, like sheep to the slaughter."
ReplyDeleteGeorge Washington, March 15, 1783
We Can’t Afford Groceries, Yet SECU's 'Profit" and expansion continues to be what is discussed ...
ReplyDeletewhere is profit being discussed? SECU is not very profitable. in the lower 3rd percentile nationally. The reason? dividend expense through deposit rates. over 1 billion paid last year.
DeleteSMH .....
Delete