... state of the "movement"?
Current "Industry Standard":
✅ "Credit union acquisitions of banks surged to record levels, with 22 announced acquisitions in 2024, representing more than $11 billion in bank assets potentially lost. Ten of these deals crossed state lines. Credit unions are effectively “weaponizing” their tax subsidy and lax regulatory standards."
✅ "Credit
unions used their tax exemption to avoid paying nearly $4 billion in
federal income taxes in 2024 while holding $2.2 trillion in tax-free
assets. The 450 credit unions with $1 billion or more in assets
represent 80 percent of the industry’s assets but comprise only 10
percent of the total number of credit unions."
✅ “The non-profit co-operative spirit and mission of credit unions is being threatened by a handful of . . . vanity projects like stadium naming-rights deals”. The example is Frontwave Credit Union, a credit union that serves Marine recruits in California, which purchased the naming rights to a soccer sports-and-entertainment complex in 2022."
“Explain to me how a grunt Marine at Fort Pendleton, who is a Frontwave Credit Union member, is benefiting from their multi-million dollar stadium naming-rights deal as opposed to reducing their overdraft fees or lowering their credit card rate.”
😎 Well, at least we can be thankful that the SECU Board hasn't wasted SECU members' money on 1) bank buys, 2) ego-mergers, or a 3) naming rights fiasco...
😎Breaking News...
THE Kenan-SECU "WE, WE" STADIUM????
"WE, WE"!... GO HEELS!!!
https://www.sportsbusinessjournal.com/Articles/2025/05/23/unc-seeks-naming-rights-deal-for-kenan-stadium-with-independent-sports-and-entertainment/
ReplyDeleteWhat????
ReplyDeleteGo Wolfpack! https://www.cbs17.com/news/local-news/wake-county-news/nc-state-to-explore-new-naming-rights-deal-for-carter-finley-stadium/
ReplyDeleteIf Frontwave Credit Union is able to bring in more members, the could use the economies of scale to reduce the operational cost per member, which would enable them to lower their fees and lending rates.
ReplyDeleteThat’s right. Growth brings advantages and opportunities, and there is this crazy notion in the business world that good marketing is a catalyst for growth. Granted, if you buy the market with mus-priced products, it diminishes the need for marketing.
Delete2:21pm Need to recheck your "economy of scale" thinking... you'll find that it is mostly a myth in the credit union world, after you reach $100 million or so in assets.
DeleteLargest CUs also don't generally offer products different from "smaller" ones in this increasingly "everything looks the same", global credit/debit card/ATM, digital, can't tell the difference financial market.
That you're "industry standard" marks a credit union as irrelevant... and poised for decline. Think about it... the "new/new" is "same old same old" ...in other words just ""s.o.-s.o."!
11:01, Not true on scale. The data shows that there is a direct inverse relationship between asset size and efficiency and OpEX ratios. Darn near linear.
Delete10:30am Could you share the data on your statement? Thanks.
DeleteOpex costs at SECU are for example up 25% over historical levels with no obvious gains in efficiency..
That's been part of the fuss if you haven't noticed.
How do they benefit? The value of the advertising is measured against the new business brought in by the ads (naming rights). The more members, the higher deposit base, the more loans, the more income from that interest which can be distributed to members. If you keep lowering rates and fees to rock bottom levels (removing sources of income) you won’t have anything to distribute to the membership.
ReplyDelete9:56pm Think you're trying to make the "bigger is better" claim which many people are finding isn't true in all sorts of businesses, haven't you?
DeleteThe truth seems to be simply that "bigger is bigger"!
It was the "growth for growth's sake", SECU as open to anybody, "most profitable, "wake the sleeping giant" mentality which kicked this off... SECU members didn't ask for that narcissism
Deflect deflect deflect.
DeleteIf an ad campaign costs $10,000 but generates $20,000 in income for the membership, why is that a bad thing?
12:48pm Your purpose in life is "income"?
DeleteBetter buy 2 Super Bowl ads then!
1:55.. so a member owner suggests that expenditures aren’t a bad thing if they generate income (which is needed and not evil), and suddenly his/her purpose in life is income? Comments like this are why you just continue to lose credibility, including among long time supporters
DeleteNot true. Larger CU’s tend to offer investment and trust services and commercial and business services more than smaller ones, for very intuitive reasons
ReplyDelete7:47am Your comments "tend" to judt "tend" with little substance. Why not "intuit" us a bit.
DeleteSounds "industry standard"!
Most of us think it’s common sense that a 3 billion cu is more apt to offers services than a 50 million one.
DeleteYou ask for it. Well, here you go.
Deleteas of 1Q 2025.. OpEX by asset size, source: CU summary on ACU web site.
<20 million = 4.01%
100 to 250 =3.66
250 to 500 = 3.60%
500 to 1 billion = 3.55%
> 1 billion = 2.91%
The linear reduction continues north of 1 billion. Thru 1Q on NCUA report, ours was 2.27%, and was in the top quartile of peer performance.
Just because SECU’s ratio has increased, that doesn’t mean there aren’t economies of scale. Our ratio has increased for legit reasons and comparing it to 10+ years ago is irrelevant.
So now you have data on clear contradiction to you statements. Fact: larger CU’s offer more products and services, and larger cu’s have economies of scale. Not a myth whatsoever.
8:28am Seem s that anytime anyone disagrees with you, it is irrelevant ("Our ratio has increased for legit reasons and comparing it to 10+ years ago is irrelevant.")
DeleteThose concerns about rising operating costs (+25%) and greater rises in delinquency and charge-offs aren't irrelevant.
But it is a good example of economy of scale... as loan losses soar, so do expenses. Is that how it is supposed to work?
1:11 Not about when someone disagrees, here to correct bad facts and falsehoods. But whatever, so the expense convo turned into DQ and losses? DQ is horrible. Who said it wasn't an issue. Why don't you prompt a promote a legit convo about why that's the case and what could or should be done about it.
DeleteYou suppressed a post before that had data that your annual expense growth rate over the a 3 year period was higher than Lord, LB and Hayes... and the expense curve has shifted up. You think because the Opex isn't the same as yours, it's negligent management. Apply some common sense and data as to what is happening to Opex... Guess what a whole new channel (mobile) costs money. New data centers cost money. New mortgage technology and compliant processes cost money. all new expense areas altogether. You got low Opex with chronic under-investment in tech and people, and among large CU's had 2-3x the size / mix of the investment portfolio, which takes a handful of people to manage. you LTS lagged significantly comparable CU's. Cost efficient to stuff members deposits in cash / investments when you're not lending it out.. in your last year, SECU was 22 out of the top 25 asset CU's in comp per FTE. really want to brag about that? I've given you that stat multiple times. Why don't have you the integrity to post it and explain it why you brag about your expense ratio.
1:11 Not about when someone disagrees, here to correct bad facts and falsehoods. But whatever, so the expense convo turned into DQ and losses? DQ is horrible. Who said it wasn't an issue. Why don't you prompt a promote a legit convo about why that's the case and what could or should be done about it.
Delete9:20 am Interesting you acknowledge "so the expense convo turned into DQ and losses? DQ is horrible. Who said it wasn't an issue." Thank you.
DeleteWould counter that neither is "horrible", but are elevated without evidence of effective efforts to control by LA. Maybe it's just the new norm?
As to having a "legit convo" on the issues, that's hard to do with someone who is ashamed to put their name to comments. Can't be legit if you can't tell the truth about who you are.
The blog opinions may be wrong, but at lest they are "owned" Tempted to suggest to you the old "put up or..."
No evidence of effective efforts to control by LA? Mortgage was DQ was obscenely high, and they took action to modify hundreds of millions in mortgages, giving members relief from the normal payments to help them. DQ dollars and ratio then dropped dramatically. Is that not action and evidence to control it? If not, what do you call it?
Delete12:19pm Not sure when the "DQ and loss ratio dropped dramatically"? The critique has been over the soaring increase over historical levels... which remains through July, 2025. (Disjointed lending policy changes and the mistake of centralized collections by LA are most often pointed out.)
DeleteGlad you are modifying loans where warranted to assist deserving members - that's good! But, your critics claim you did mass modifications to conceal ( at least temporarily) the losses resulting from the lending/collection problems - bring accounts current to hide the extent of the DQ issues. Hope that's not true.
When are you going to own, or at least address, the mortgage issue? This is your business that model caused this mortgage DQ problem. New / new just didn't fix it quite in time.
Delete10:28 pm explain what you mean.
DeleteThe DQ issue and members at risk of losing their homes is a direct result of the business model you built with a 109% portfolio lending model. Yet all you do is complain about the delinquency. You’re recently on record saying selling loans moves in one out of state, so that’s a bad thing. But earning the interest over time by having them on the balance sheet keeps income here. Simply saying you continue to support a model that is the direct cause of a lot of hardship for our members. Saying you should own the model you built and it’s impact and tell readers the reason for the DQ, instead of just complaining about it. And, maybe even educate members that selling loans isn’t done evil scheme to mage a profit. It helps members.
DeleteBtw, your comment about selling loans doesn’t keep income here is silly, and wrong. If not interest income over time, we get GOS equivalent to the NPV of net interest income over time. Still goes to the ‘ole secu bottom line, locally.