Well, they can always eat cake...
The evidence has long been clear that risk-based lending (RBL) is discriminatory [link] on the basis of race, gender and age. The SECU Board leaped off this moral lending cliff in 2023 and has fallen in esteem and performance ever since.
✔ With the current government shutdown, once again we have positive proof that RBL is a bogus, destructive credit union lending practice. This time RBL practitioners are wrongfully throwing our military, our federal workers, various federal benefit recipients, and their families into a financial catastrophe not of their own making - but for which they will pay the price!
✅ Here read the letter from the Defense Credit Union Council, a leading national credit union advocacy group representing 40 million credit union members, on the effects on member credit scores of the federal government shutdown [link- entire letter]
✅ Or the CUDaily article on the shutdown problem [link]
😎 "Beyond the immediate strain of unpaid bills, the ripple effects on financial health are severe. Missed mortgage, loan, or credit card payments trigger late fees and "can inflict lasting harm on credit reports and scores".
"... In theory, no worker or service member has to suffer a credit score drop because of a shutdown. However, the reality is that not all affected individuals benefit from these voluntary measures. We cannot leave our service members’ financial security to ad-hoc charity or luck; they deserve dependable, systemic protections."
For years, highly responsible SECU members - and DCUC service members - have had their financial lives disrupted by unexpected events beyond their control - loss of job, severe illness or death in family [link], disabling car accidents, divorce, alcohol/drug/mental health issues, hurricanes/floods, and the list goes on.
In western North Carolina, the latest unpredictable, catastrophic event was Hurricane Helene [link], which financially ruined thousands of fine SECU members - an event not of their own making, but for which they will pay the price! That's real life, which RBL, the SECU Board, and elite management have chosen to callously ignore.
If credit unions want to fix this problem of obvious unfairness to all members, then a return to responsible, non-discriminatory lending is a must. Fix the real problem.
Some facts:
ReplyDelete1) There is no evidence or broad view the RBL is discriminatory. Regulators support it. Just cuz you say it is doesn't make it so.
2) Lenders will waive late fees, provide mods, etc. Shutdown will last another week. Calm down. You can try and make it dramatic, but it isn't.
3) "elite management"? what is that? callously ignore? thousands of members were helped, not financially ruined.
4) no one has listened to you on this topic for decades. they aren't going to start now.
5) SECU members who use their credit responsibly are no longer penalized with above-market rates.
6) SECU has $2.4 billion on 30+ DQ and mods. Bout time all products have RBL to pay for the risk we take by lending to people with poor credit scores.
Not true. People are listening.
Delete3:52pm You obviously didn't read Mr. Stverak's letter. It would help your credibility if you didn't always seem a bit vacant in your reasoning.
DeleteTry using AI (even the cheaper versions) to improve your performance... and avoid this type of continuing embarrassment!
Guess you're saying that DCUC is out to lunch and Mr. Stevrak's an idiot. Why don't you write him and tell him he is misrepresenting his 40 million members?
We understand you know better and stand by your opinion - firmly and anonymousely.
6:38. Did read the letter. So what? It was long on form and short on substance. Guess what. Members, even not military, have hardships all the time. The drywaller in between jobs isn’t less important than the military member or gov worker that misses a paycheck., are they? You just eating up what he lobbyists say? Might have given u more credit than that.
Delete@6:38PM Why to you continue to support blatantly unfair flat rate lending? Why is it fair that A tier members pay MORE than the rest of the membership? Another nothing burger from this blog.
Delete10:22 am If you charge all members the A rate, everybody wins. Best rate for all members is also a wonderful "marketing" position, s topic you don't seem to be familiar with.
DeleteMaybe a '"We" are just like everybody else ' SuperBowl ad would be better?
Everyone would get the best A rate until we realize that isn’t sufficient to cover expenses and the regulator shuts us down for insolvency. But it would be a fun 3 months!
Delete8:17 pm Only problem with your comment is that it isn't true.
DeleteSame best rate for every member worked well at SECU worked well for the first 85 years .
With race-based lending, losses (now @ a quarter of a 1/4rd billion $$ annually) and delinquency have soared.- can't hide that fact either.
But why argue, the post simply shows that CU members -according to competent, well-regarded CU leaders - are going to be financially damaged by the shut down; then overcharged unfairly for lower credit scores for years - all not the members' fault.
Proud of you for your "let them eat cake"! leadership ... who could ask for more!.
Should/do credit unions favor socialism, whereas banks favor capitalism?
ReplyDelete4:55 pm Don't think there is any difference between the two on that score, what are you thinking?
DeleteWe live in socialist society. The FDA, socialism. The CFPB, socialism. State regulators, socialism. The fact that you can’t distinguish between capitalism, socialism and communism is a failure of the school system, also socialist BTW.
DeleteFor me, the difference is the "elephant in the room".
ReplyDelete"Socialism is a philosophy that advocates for ... collective ownership ..., aiming to distribute resources and wealth more equitably...
🏛️ Core Principles
• Public ownership: ...resources... are owned or controlled by ... cooperatives rather than private individuals.
• Equitable distribution: Goods and services (tax help for example) are distributed based on need or contribution...
• Collective decision-making: ... decisions are made democratically or centrally, rather than by individual capital owners.
🧠 Philosophical Foundations
• Socialism stems from the belief that its benefits should be shared collectively.
• It challenges the idea that individuals live and work in isolation, emphasizing cooperation and mutual responsibility."
7:10 pm Ok so what does that have to do with credit unions?
DeleteI'd be okay with banks using RBL, but not credit unions.
DeleteFrom AI... "Credit unions share some philosophical overlap with socialism—especially in their emphasis on democratic control, community benefit, and member ownership... "
I can see credit unions becoming extinct if they continue acting more and more like banks.
9:19 pm "Credit unions share some philosophical overlap with socialism—especially in their emphasis on democratic control, community benefit, and member ownership... "
Delete"... especially in their emphasis on democratic control, community benefit, and member ownership...'
Sounds like the definition of every Protestant church in North Carolina!
And, every civic club - Civitans, Lions, Kiwanis, Rotary. Most professional associations - CPAs, doctors, lawyers... even America's Credit Unions (ACU) and DCUC.
And our local and state governments seem to feature "democratic control, community benefit, and member ownership...' last time I checked.
RIght, but I don't think those things are in any danger of becoming extinct, because their purpose remains clear. I recently moved most of my money out of SECU, because "there used to be a difference". Call it "fairness", socialism-like (or whatever), there needs to be a difference - other than technology or products that compete with banks.
DeleteYou should put your money where you get the best return for the goal/purpose of that capital. You should borrow money at the best rate and terms for the purpose of the loan. Does not matter if you use a credit union or not for that. Anybody that tells you differently is trying to sell you something you don’t need (but they want you to think you do).
Delete6:38pm I haven't paid interest on a credit card or loan in over 25 years. Banks or credit unions aren't places I would use for "returns". And I guess you've never heard of SRI or ESG investing. It's not always about the biggest return.
Deleteeverything isn't in dollars and cents, but a banker doesn't understand that lingo...
DeleteAh, there's that troll. Put them with Waldo.
Deleteremember when you're pointing fingers ... back at ya banker bud ... bwahahaha ....
DeleteNot understanding the negative comments in response to 6:38. The 6:38 comment appears to be good advice that is factually accurate and facially neutral. Emotion and finance don’t mix well.
Delete10:07 If the "advice" had been given in a different context, I might agree. The discussion was about social conscience, not investing basics.
Delete