... What have we got to lose?
😎 If a lack of experience and expertise qualifies a credit union to be a business/commercial lender, then SECU should be wildly successful!
If, as it appears, there is a continuing struggle to control delinquency and charge-offs at SECU ; then, what could possibly go wrong with jumping into the more complex world of commercial lending? Well, there might be a few risks - and consequences - case in point:
✅ Two CUs Now Own Former Fruit of The Loom Plant After Loan Goes Bad [link CUDaily]
"Vidalia Mills [Louisiana] owed approximately $32.5 million to Jefferson Financial Credit Union and Greater Nevada Credit Union. At auction the highest bid was $1,005,000, which was lower than the appraised value of $1,193,000."
How did a $600 million credit union - a strong school employee focused credit union (originally Jefferson Parish School Employees) in Louisiana - come to partner with a Nevada credit union to lose $30+ million on a start-up denim plant? Want to know? [link] - read it and weep!
"Others were more skeptical of the mill housed in the former Fruit of the Loom facility. To be a fully vertical denim mill with in-house spinning requires a right-sized facility and a knowledgeable workforce at each stage of production, not to mention cash. Pete Roberts, the founder and CEO of Origen USA said. Vidalia lacked it all."[link]
When you lose $30 million bucks "swimming with sharks" in commercial lending waters, well beyond your depth, there are consequences. Especially when your loan loss reserves are only @$6 million and total net worth @ $40 million!
😎 As you see, all it took - as quoted - was "a board open to progressive thinking" misled by a CEO to match - both evidently of the "We Are" type.
✅ Consequences?:
"The Board of Directors, Leadership Team and Employees of Jefferson Financial FCU are excited to announce that the JFFCU membership successfully approved the merger with Keesler Federal on May 21, 2025."
😎 Translation: Jefferson Parish School Employees Credit Union is burnt toast! Hubris has its price!
Slow news day? Still awaiting the response you won't get from Ms. Moon? Just another fear-mongering post taking a very extreme one-off and trying to convince people (or at least yourself), that it's relevant to SECU.
ReplyDelete1) We aren't in business lending now. Worry about it when you need to.
2) We won't make loans like this. We want to serve our member owners who own businesses.
3) There are many, many leaders at SECU experienced in business lending from other CU's and banks. We know you've never done business lending, but that doesn't mean other people don't have that experience.
What do we have to lose? The credit union? Gimme me a break. Nice try, but this lemming isn't buying this BS, that's for sure.
1:18 pm The request for clarification on resolutions was made not only to Ms. Moon but also to Ms. Brady and the CLO. Might understand Ms. Moon not responding, but I hope you're wrong about our CEO purposefully ignoring a polite request.
Delete1:18pm #1 Can't tell SECU member-owners what your "strategic plan" is for business/commercial lending? Don't know or.... are you hiding something? Why?
Delete1:18pm But if your legislation passes then every business in the U.S. - even Vidalia Mills - could join and borrow from SECU! Don't you know what open membership means?
DeleteWhich member busines owners do you intend not to serve? Thought you claimed to give members what they wanted? What happened to that commitment?
Quite sure that the defunct Jefferson CU didn't intend "to make loans like this". did they?
1:18pm #3 Can you list how "many,many"" experienced commercial lenders are employed at SECU and what their credentials are?
DeleteBe careful with your answer, it's pretty well documented that the "many, many" ain't so!
Commercial lending does not equal small business services. Agree that SECU should not be financing large corporate entities but that does not mean they should also not provide small business loans, accts etc. Please look up the definition of false equivalency before posting
ReplyDeleteWhat evidence do you have that SECU is pursuing commercial lending? Agree that SECU shouldn’t head in that direction, but do you have evidence that is actually happening? You might point to a lack of denial from the SECU leadership, but that doesn’t constitute affirmation of your assumption.
DeleteThey have a commercial lending department that's been around for quite a while prepping for their big debut.
Delete359, yes they do. No telling what they do for work, might just be on tic toc all day
DeleteDo you know these people? A little bold to claim they are in tik tok all day. Mind telling us what you do all day?
DeleteAmateur hour at worst, second rate at best
DeleteI said they might be on tic toc, I do my job as director by my bosses. No time to play games when your helping members all shift
Delete1:31pm While I'm looking up the definition of "false equivalency" would you please provide the members of SECU the definition of "small business loan", so we can rest assured in your commitment? Thank you!
ReplyDeleteDeflect deflect deflect.
DeleteOr don't know what to say? Why not? Which SECU members will honesty and transparency hurt?
Delete7:33, if you don’t know what a small business loan is, maybe you should sit this one out. What assurance do you need - apparently that we won’t make a crappy 30 million dollar loan? SECU owes you assurances and explanation because you read an article about another CU doing something stupid?
DeleteIt is all fine and good to say "small" business only, but that has a couple of big issues. One is that a lot of small businesses fail. It's a fact. Plus, they're hard to evaluate. Their accounting and records are typically inconsistent and incomplete. The other is that by serving them, you are almost doing a disservice to any business that might want to grow. Do you boot them out when they get too big? Force them to leave on their own because you can't help them? Where is the line on that? And then what? Now they are in banking waters with no prior experience or relationship to build on. It's akin to pulling a weak swimmer out of a shallow pool and tossing them into the ocean.
Delete8:27PM “Lacking relationships and experience” isn’t the hurdle you think it is
DeleteSmall businesses don’t exclusively need lending. They also need account and payroll services (can help with that documentation issue you mentioned). They also typically have more assets for collateral
DeleteFurthermore, why should SECU offering small business services be off the table just because some small businesses don’t have consistent documentation or accounting?
DeleteFurthermore, why should SECU offering small business services be off the table just because some small businesses don’t have consistent documentation or accounting?
Delete10:04/5/6 "Houston we have a problem"... as you can see from these comments. Seems that the commenters, as they say,: "Don't know what they don't know"!
DeleteUsually proves costly, but if no one is accountable, guess it is price SECU members will have to pay...
@10:11AM If it “usually proves costly” then it would be rare that FIs offer business lending/service but that’s not the case. A lot of them do. Business lending is more secure because typically it’s more controlled and there are more assets that can be put up as collateral, protecting the membership.
Delete10:56am Are you aware that 3b 0f the top 30 banks in the US failed last year? All were larger and had more expertise than SECU... but perhaps they had the same unwarranted self-assurance.
Delete10:56. Good point. Makes me wonder how regional, community and commercial banks that do business / commercial lending have higher ROA's despite paying taxes, the same or better losses than CU's
Delete10:56am There you go again with that for-profit ROA misstep. Just send your comment to the American Bankers Association so they can use it to repeal the tax exemption!
Deletethe messaging from Jefferson cu sounds like Gym in 2021-22. glad that mistake was corrected. we dodged a bullet with that 'progressive' thinker.
ReplyDeleteWe hope we have. Remains to be seen. As long as the CEO and Board want commercial lending we have dodged no bullets.
DeleteThat’s the problem with the thinking. It’s not a bullet to dodge, it’s an opportunity to serve our members who own businesses so they don’t have pay higher rates and fees at a bank. If you’re a business owner member, you will have SECU options. If you’re not a business owner member, mind your business and stay in your lane, it doesn’t affect you.
Delete11:01pm Well said in representing the hubris which seems to color the thinking of the current Board and Elite leadership team. Why do you think each member shouldn't have a voice in our credit union? What does "stay in your lane" mean? Are some members now important than others at SECU?
DeleteThe problem with the business lending discussion is that the current Board and Elite can't seem to define (or refuse to do so) for all member owners what business/commercial services means. As the example shows the lack of experience and a puffed up ego can produce some dangerous and in this case "fatal" results for a credit union.
SECU isn't designed to serve "all" member needs necessarily... just ask the 100,000+ tax prep SECU members who were shown the door.
Why isn't something important to all members interests at least outlined and described in the SECU Strategic Plan... plenty of room between the fluff to do so... and all members would like to know what "our" plans are.
The Board and elite of Jefferson Financial afterall also "had a plan for business/commercial services...
"all members would like to know what "our" plans are? Oh really? You speak for all 2.9 million of them? Was there a survey I missed asking me if I need to know the business lending plans now that are two years away?
Delete11:12am Not sure what the continuing fear is of letting the members know what you plan to do with business/commercial lending? Why would it be a problem to let the member-owners know?
Delete"3+ Month Delinquency 2024 =1.07% 2025=1.22% 0.15% higher "Loan delinquencies have risen as members experience financial difficulties."
ReplyDelete3:38. And? 15 basis points increase. Not a big deal.
Delete7:36pm Was less tha 1.00% before the introduction of race based lending... but you have difficulty noticing that, don't yo.
DeleteThat means that since 1/1/23 you're up 100%+... have doubled up ! Take a bow... at the members expense!
Why then is SECU pushing for the passage of the now Senate Bill in the NC legislature if not for commercial lending and real estate loans? Remove that from the legislation voluntarily and maybe SECU members will believe your snark. Why does any business anywhere need to have membership in our consumer oriented credit union? SECU is strangely silently officially on it's intentions in pushing for passage, and what it would do if it did pass. Members remain skeptical of SECU's intentions...
ReplyDeleteNews flash - we don’t need new legislation to do commercial lending. Can put billions on the balance sheet under current rules. Plenty of bad loans can be made in NC - which is what people seem to think will happen.
Deletehttps://www.federalreserve.gov/newsevents/testimony/alvarez20100901a.htm
ReplyDeleteyeah, Wachovia thought they had smart folks too ... or were they just greedy?
Gym blew up Wescorp and still is putting credit unions at risk should be in the clinker
ReplyDeletewe can have this discussion at the yearly meeting ...
ReplyDelete9:19 am How can you have a "discussion" when no one can speak? Hilarious comment, except for the reality of the gag order imosed on all SECU members....
Deletesarcasm .... sorry ... was just pointing out the obvious point that this would be a good topic to discuss at a meeting ... but we have been abandoned by our Shepard, left to wander among the wolves ...
Delete6:05pm Sorry, missed it; you were too good at it!
DeleteProbably a good time to repost the following:
ReplyDeletehttps://www.secujustasking.com/2025/02/secu-with-commercialbusiness-services.html
Do SECU members agree that business/commercial rates should be more favorable than individual member rates. Why would that make sense?
Who thinks business/commercial lending is less risky than individual mortgages?
Again has the SECU Board and Elite considered the ramifications of dissing the member-owners in this fashion as CIVIC has done?
You haven't seen pricing but now we're going to dis members?
ReplyDelete11:22am "Planning" to offer a service, but have no idea about pricing?
ReplyDeleteYour question is irrelevant. No one associated to lending would derive meaning from or ask which product is "riskier" Important questions are a) is the risk of the product within our risk appetite and b) is the risk priced for (a question apparently not asked when you gave B rates to E tiers, but don't worry, we fixed it for you.)
ReplyDelete11:25 am Interesting answer! Think most folks in finance would not find "a)" particularly compelling nor astute.
ReplyDeleteAs to "b)" got me there! Your charge-off and delinquency rates show how well you "fixed" all that...
... can't wait to see your further success with business/commercial lending!
who says we have no idea about pricing?
ReplyDelete11:33am Well do you?
DeleteTrue planning by most businesses includes product definition, cost projections, financial proformas to determine the scope and pricing of services to be offered, plus metrics for "success" measurement - that hasn't been done?
Most "small businesses" are required to do that by their bank! ? Hey, it's "industry standard"!
Just planning to offer something, some time at some price ... and hope for the best?
That’s…. Literally how small business start…
Deletehttps://thecudaily.com/for-credit-unions-now-is-the-time-of-monsters/
ReplyDeletehttps://thecudaily.com/is-now-the-time-of-monsters-in-credit-unions-heres-what-many-have-to-say/
DeleteAs expected, this article really incited the pro commercial lending supporters. One says SECU is not in business lending now so this is irrelevant, other says there is a existing commercial dept waiting for big debut, another says business lending is usually more secure .. suggesting less risk? Another seems to think SECU would only be offering small business startup. But small and even large businesses are failing, correct? So, these posters are pushing for commercial business and seem to have inside knowledge that it is coming, but the lack of consistency must mean some will know what they need to know when they need to know it! This path is NOT intended to make SECU better, it is to exploit SECU. -c
ReplyDeleteSECU lender here. I don't think we should engage in business lending. However, if we do, the rates should be the same rates; not less for any reason. Please bear in mind, State Employees built SECU in Raleigh in the 1930s, not businesses. I enjoy working at SECU and appreciate the opportunity to serve the membership. It is sad to watch the Credit Union I started at over a decade ago change so much. Even sadder is all the outside influence from upper level management outside hires that have never been in an office with our members and don't have the first clue about their financial situation. Our Credit Union is the second largest in the United States. If we suck so much (all we hear from upper level management is change, change, change), how did we get so large? Oh, and we got this large without huge TVs running advertisements all day in the beaches and without spending lots of money on marketing. One lenders opinion.
ReplyDeletewhat commercials are we doing? Please give me one.
DeleteSECU built for businesses? No, it wasn’t. Also wasn’t built for the 4/5 members that aren’t state employees - a few hundred thousand who own small businesses. SECU was built and exists for its member owners, and it should be our mission to serve their financial needs of our member owners.
Delete9:38am Not sure what FOM exploitation means.
DeleteBut if "buying deposits" means members got much better savings rates than today... plead guilty!
And if SECU put a lot of folks in homes when others wouldn't.. plead guility to that too.
Most of this sounds like "for-profit, banker boy" talk...hope its not the way SECU thinks now
SECU was started for state employees, school teachers and their families. Don't think you are including those categories in your 4 out of 5. If you keep at that field of membership eventually everyone in NC will be a member! So maybe not currently a state employee or teacher but someone's mom or grandmother etc etc.
DeleteWe, or you back then, got large by exploiting FOM rules to grow way beyond state employees, buying the deposit market, and being the only bank or CU (unicorn) to do high risk mortgages and make loans to high risk borrowers at below market rates
ReplyDelete9:27 am None now... your memory is conveniently short.
ReplyDeleteOh. You mean the commercial that never aired? And would have highlighted a great organization even if it did?
Delete2:45pm Thank you for finally acknowledging that the Super Bowl ad was actually scheduled. See didn't hurt to tell the truth.
DeleteIt was a silly idea... we all knew that.
3:13.. Still criticizing us for doing things we've never done, I see.
Delete4:36PM Unfortunately, it's only the critiques from members which make you pay attention and cancel ads, replace CEO's, try to correct collection disasters, back up on "no formal proposal proposals"!
DeleteThe serious part now is due diligence going forward in operating a $50 billion business affecting 3 million North Carolinians.
Yep, you will be held accountable for the things you've really "never done"... get ready everyone's watching!
BTW... hope you succeed!
@2:45PM What Super Bowl ad? What are we paying for a Super Bowl ad?!
DeleteThere is or was no Super Bowl as that ran. Fake news.
Delete8:57pm Can't slither around the Super Bowl ad by claiming it didn't exist because it was "never run"... give it up, celebrate that the members' money wasn't wasted!
DeleteHope you agree a Super Bowl ad would have been a waste, right?.
Don’t agree. successful Cu’s market themselves and their products
Delete8:11am Is SECU unsuccessful? Which credit unions are more successful?
DeleteHow does spending millions$ on marketing benefit current member owners?
8:41am How did SECU grow to $50 billion without any marketing if people were "unaware"?
DeleteFor those with experience in this, or that have endeavored to look at more than Civic and assume we’ll copy them (cuz they make rational decisions, right), you would know that most commonly that biz products comparable to consumer tend to have higher rates. Consumer and biz deposits tend to be more similar. Fees on biz deposit accounts are more common than consumer and that, along with rate, has to be considered when comparing rates and prices
ReplyDelete