SECU - Looking Forward With New Eyes: Challenges Remain...

 

September, 2023 hopefully marks the end of two years of unprecedented turmoil and disruption at SECU.  So far, nobody has won, everybody has lost. Let's hope the pain was worth the effort.

Below is the SECU Board's snapshot of current performance. SECU remains a sound financial institution. Soaring operational costs over the last two years and the drop in deposits due to non-competitive rates must be addressed, as do the rising charge-off losses associated with lending. These are management issues - entirely solvable.

Two other issues may be more challenging - 1) the perceived decline in service quality and 2) a divided staff. And, yes the two issues are directly related. SECU in the past enjoyed a 98% member approval rating (externally and independently surveyed) - the highest in the Nation. That's no longer true. That level of support can be regained, but it will require "from the heart", boots on the ground, hard work from the staff. All SECU members want the staff to win that round! 

The remaining issue is the principle, ethical divide associated with risk-based lending. One would hope that the new Board would pause on this issue and publicly listen to all opinions on this key, critical issue for SECU. The former Board had heard only one side. There is no financial, operational, nor responsible reason not to pause and re-discuss this issue with the membership. If the SECU Board fails to take this prudent, reasonable member-beneficial step then... it will be another long year.

 

Let's hope for the best - and sound, fair judgment by our Board.

 

If The N.C. Credit Union Division Doesn't Interpret State Credit Union Laws, Who Does?

Ms. Kristina Ray, Administrator of N.C. Credit Unions  kristina.ray@nccud.nc.gov

October 25, 2023

Dear Ms. Ray,

Thank you for your October 19, 2023 response. In our letter of October 9, 2023, we asked two questions:

Q: 1)  Is the N.C. Credit Union Division required  by North Carolina law to monitor and enforce compliance by state-chartered credit unions with their bylaws?

Q: 2)  May a N.C. state-chartered credit union adopt rules, policies and procedures which effectively amend its bylaws without approval by the NCCUD? 

Your response on October 19, 2023 was as follows:

"Among other responsibilities, the North Carolina Credit Union Division (NCCUD) reviews North Carolina state-chartered credit unions ’bylaws for compliance with required information outlined in North Carolina laws, rules, and regulations. Each credit union’s bylaws contain procedures for requesting amendment approvals from the NCCUD Administrator. Additionally, some provisions within the standard form bylaws, which may be used by credit unions as guidance, allow for the credit union Board of Directors to adopt policies and procedures, as long as the membership is notified within a specified time frame before becoming effective. The Administrator approves or disapproves proposed bylaws amendments after a thorough review of the request. If you have additional questions relating to this matter, consult legal counsel."

✅ As laypersons, we are concerned that we may not fully understand your response. It seems clear that your answer to Q: 1) is "Yes" - is that correct? It would appear that you did not answer Q: 2). Would you please clarify your answer for us: "Can a state-chartered credit union adopt policies and procedures which amend its bylaws without approval of the Administrator?"

Would also ask why you continue to suggest that we hire legal counsel to answer these questions? The N.C. Credit Union Division - and you as Administrator, with the help of the Attorney General's Office - are the parties designated by the State Legislature to interpret and enforce State Statutes governing credit unions.

Look forward to your answer to a simple question first asked over 90 days ago.

Sincerely,

Jean and Jim Blaine