SECU: An Important Message From Blue Cross/Blue Shield of North Carolina?

 ... singing the blues.

Folks we're never going to finish Credit Unions: 101 if you keep bringing this other stuff up!  But, since these little side forays sure boost readership, lets pause a moment... you seem to be interested.

Not going to try and take on the difficult issues which arise with healthcare - a problem long smoldering, which has recently gone ballistic. But, a brief look at BCBSNC may lead you to a couple of SECU "aha" moments.

BCBSNC  has been by far the #1 provider of healthcare insurance in North Carolina for decades. The State of North Carolina healthcare insurance plans were all managed by the company. From humble roots, BCBSNC grew into the dominant health insurer in our State (sound familiar?).

Did you know that BCBSNC  started out as a small, local, not-for-profit mutual company, (sound familiar?) in Durham/Chapel Hill in 1933? It started in the depths of the Great Depression (sound familiar?) to help give working men and women - whether Durham tobacco worker or university staffer - access to healthcare (sound familiar?) 

Back then, workers of all stripes couldn't afford healthcare services (sound familiar?). BCBSNC was established to collect a small monthly insurance premium in advance from all workers, which were then pooled to pay the healthcare costs for those who needed it. Sort of a cooperative insurance club with members helping each other get by (sound familiar?)  Great idea! The workers benefited, the doctors and hospitals got paid, the community as a whole was healthier.

Did you know that the driving force behind the creation of BCBSNC was a powerful banker from a highly influential North Carolina family named John Sprunt Hill? (sound familiar?) If it doesn't, please take a look at this link [Credit Unions: 101]. Quite a "coincidence", don't you think?

BCBSNC in the past was an icon of service, one of the premier home-grown companies in North Carolina (sound familiar?) Best I know BCBSNC still is a very fine company. But with success, many things have changed.

Criticism has grown sharply as BCBSNC has sought to actively expand beyond North Carolina, attempted to convert to a for-profit status, and to merge with out-of-state health insurers (sound familiar?). 

As BCBSNC came to be viewed as an adversary rather than ally, it lost its tax exempt status in North Carolina. In profiling the company, superb customer service is not necessarily the first thought which comes to mind for many policyholders. (sound familiar?)

"Canary in a coal mine"?

...  "aha" moments  for SECU members?

 

SECU: Federal Deposit Insurance - Well, Since You Brought It Up...

  

             ... the SECU Board fiduciary duty.

"Credit Union: 101" has gotten to be a bit of a slog hasn't it... thanks to those who are hanging in there. 

Was trying to move quickly pass the introduction of federal deposit insurance (NCUA) for credit unions in 1970 and at SECU in 1984. That change was important to all credit unions and SECU, but I didn't think it would be of much interest to you. Several comments indicate a little deeper dive might help [here go back and take a look at the comments].

Comment: "Why did it take SECU 14 years to provide their depositors federally backed insurance on their life savings? That seems to fly in the face of the Board’s and CEO’s fiduciary responsibility to the membership."

Ouch - a clear case of fiduciary irresponsibility by the SECU Board and CEO! Actually a great comment, since a hard look at the issue of the fiduciary responsibilities and performance of the SECU Board is what this three year debate has been - and continues to be - about.

Here's more of the story which the "shoot first, ask questions later" commenter was unaware. SECU provided deposit insurance to SECU members beginning in 1967! 

Federal insurance was unavailable, so SECU in conjunction with several dozen other North Carolina credit unions and S&Ls formed the N.C. Savings Guaranty Corporation (NCSGC) to mutually insure member savings. Another example that, even going back 50 years, SECU was a good bit better - and much more member focused - than "the industry standard". And, also worked cooperatively  "across the aisle" with diverse, local institutions to help improve the lives of all North Carolinians.  

Yes, as a "unicorn", SECU can make a tremendous, innovative difference in North Carolina; as a run-of-the-mill industry standard... not so much.

The N.C. Savings Guaranty Corp. was later rebranded as FIAC (the Financial Institutions Assurance Corporation) and was liquidated in 1984 when the national savings and loan industry collapsed. After assisting with the "bailout" of the FIAC-insured, North Carolina S&Ls, SECU seamlessly converted to the NCUA federal deposit insurance system. More than you wanted to know, but most certainly a good example of fiduciary responsibility met in spades by the SECU Board. 

But one serious point for you as an SECU member to keep in mind: The national savings and loan industry imploded in the mid-1980's at tremendous financial and social cost to the American people. 

Key reasons for the financial collapse: 1) out-of-market regional expansion, 2) a move to commercial lending, 3) rapid expansion through financially dubious mergers, 4) charter conversions from mutual to for-profit, and 5) ... a failure of fiduciary duty by uninformed - and frequently unethical -  boards of directors, often misled by criminal management.

It will never happen again! ... but it always does.