SECU What's Next? A Growing Question Of Safety And Soundness?

   Time to act, before it's too late.

 Ms. Katrina Ray, N.C. Administrator of Credit Unions

June 20, 2025 

Re:  NC Credit Union Division Failure To Protect Credit Union Member Governance Rights

Dear Administrator Ray,

 

North Carolinians, who are member-owners of state-chartered credit unions under your supervision, are at risk of losing their legal and statutory governance rights. This has become a safety and soundness issue for the 3+ million credit union members who hold over $60 billion in North Carolina credit unions.

As Administrator, you are not unaware of this situation given the extended controversy within our State. I would like, however, to give you a summary of what has occurred, using State Employees' Credit Union, of which I am a member, as the example. 

 

Lets focus on the SECU Annual Meeting: 1) In 2022 (and in all prior years back to 1937) SECU members could speak, offer resolutions and make motions at this business meeting, 2) in 2023 speaking rights by SECU members were restricted and the meeting agenda was altered to eliminate member participation in "new business/old business" discussions, 3) in 2024 the ability of members to speak was eliminated, only non-substantive resolutions were permitted, and the standard business meeting agenda was again curtailed.

 

In looking to the 2025 SECU Annual Meeting, a written request was submitted for a copy of procedures for SECU members to submit substantive governance resolutions in advance of the meeting for publication and consideration by the SECU membership. No procedures exist. SECU noted that advance resolutions would not be accepted at the Annual Meeting and that such resolutions could be submitted only via a separately called "special meeting" of the membership. This further restriction on SECU member governance rights was a novel invention and of course no policies or procedures for such a "special meeting" exist.    

As Administrator, you are given credit for authorizing these eliminations of SECU member governance rights via the bylaw amendments approved by NCCUD on 6/30/2023. The specific amendment you approved was: "... (iii) authorize the Board to establish upon notice to the membership policies and procedures governing the order of business, format and conduct of the annual meeting." 

 

It would appear that the SECU Board has used your general amendment authority as cover to purposefully curtail the legal, statutory governance and ownership rights of SECU members in their credit union. This has created an explicit safety and soundness risk for the future of all North Carolina credit union members.

If as Administrator, you did intend to authorize this abridgement and curtailment of credit union member governance rights; you have created a business entity unique among all insured financial institutions in the U.S. and have authorized governance practices which would be illegal among most public U.S. businesses.

This unparalleled and growing impairment of basic shareholder-rights is being followed carefully by the credit union and banking communities in North Carolina and on the national level.

Would hope you would use your statutory authority to address these issues on behalf of all 3+ million North Carolina credit union members.

Sincerely,

Jim Blaine, SECU

cc: SECU Board of Directors

Your rights... at risk!