SECU/CCUL Putting House Majority Leader John Bell IV's Political Future In Play

We haven't talked much about H. 410 - Credit Union "Updates" in the last few weeks. Why? Well, in case you haven't noticed, the State Legislature and the Governor have recently been wrestling with several important and highly controversial pieces of major legislation. Definitely a tough session all the way around.

But listening to SECU COO Leigh Brady's presentation to SEANC*, over the weekend, brought H. 410 back to mind. Have already mentioned her remarks that "H. 410 was not our bill", SECU is just "trying to help out other credit unions". Many folks involved with H. 410 will find that to be an "incredible" comment and surprise! Guess Ms. Brady believes that no one will notice SECU's fingerprints all over the creation of H. 410...and the purposeful misrepresentation of H. 410 to the Legislature and especially to its primary sponsors Representative Howard and House Majority Leader John Bell IV.

In her SEANC presentation Ms.Brady finally acknowledged, although obliquely, one of the many, misleading  fictions encompassed within H. 410, that state-chartered credit unions actually have had authority to offer safe deposit boxes for decades. Sounds minor doesn't it, but take a look at how the bill was presented to our legislators (verbatim from the H. 410 bill digest):

· Expands the scope of financial services that a credit union can offer beyond travelers checks and money orders so that a credit union may also offer other negotiable instruments, electronic transfer of funds, safe deposit boxes, custodial services, and correspondent services, and charge a reasonable fee for these services. Also lifts the condition that the travelers checks/money orders sold by the credit union are payable at other institutions than a credit union.

The truth is that state-chartered credit unions have long been able and are offering these services to North Carolina members. 

SECU's Ms. Brady clarified that credit unions would no longer "have to ask permission" of the state credit union regulator to offer this service - which they already offer! Several of the seemingly unimportant provisions in H. 410 seek to do two things: 1) bypass the credit union state regulator's review and scrutiny and 2) bypass the State Legislature's review and scrutiny through the enhanced "federal parity" provision. 

Given the recent collapse of three very large U.S. banks - Silicon Valley Bank, Signature, and First Republic, - does the State Legislature really want to give up review, scrutiny, and control of North Carolina's state-chartered credit unions? Is being sure that North Carolina's credit unions are operating in the best interest of North Carolinians no longer important? 

So what does this have to do with Majority leader John Bell IV? Mr. Bell is a North carolina political leader of much promise and prominence. His sponsorship of H. 410 is a powerful endorsement, hard to ignore by his colleagues. And, with H. 410 potentially "on the ropes" in the Senate, Mr. Bell's emissaries are working hard to apply pressure to folks to salvage it.

It should be noted that Mr. Bell is from Goldsboro, has worked for a local credit union in the past, and even sits on the advisory board of the SECU Wayne Memorial branch (check it out on the SECU website). One would think that Representative Bell would be well aware that many of the provisions of H. 410 are fictions. I believe the more likely scenario is that Representative John Bell IV has been led down the primrose path by folks he thought he could trust. Guess it isn't SECU, since according to Ms. Brady, H. 410 "is not our bill".  Must be that rascal with the Carolinas Credit Union League (CCUL)!

Mr. Bell is an experienced, well-respected political leader - with future political ambitions, which appears promising for North Carolina. Lots of folks in Wayne County are state workers - O'Berry/Cherry are still major employers, public school employees, and their families. Most are SECU members and will suffer negative consequences if H. 410 passes. 

H. 410 is John Bell IV's bill - no "ducking" that. Folks in the future - all across North Carolina - will remember that, count on it!

 

...when you find yourself in a hole, you might consider to quit digging.

 

* State Employees Association of North Carolina

Listened to a presentation at a SEANC* Board meeting over the weekend. The presenter was the Chief Operations Officer of SECU, Leigh Brady. Ms. Brady had in tow - apparently for support - SECU Board member Mark Fleming, who smiled and waved but remained silent.

Ms. Brady's report highlighted many upcoming changes in technology at SECU. Those changes sounded positive, but were improvements mainly in the area of digital convenience for members - quicker, some ease of use refinements, a few new "bells and whistles" - but no major new programs or services for SECU members. SECU COO Brady did admit, a bit sheepishly, that these changes were going to take "several years" to implement - a quite different and far more accurate account than the "California Dreamin"-hype and hypocrisy put forth in those infamous "Fireside Chats" last November. Ms. Brady also touched on the recent NCR "✈jet set ✈ digital deal" - no jet lag was obvious.

In response to a story from a SEANC Board member on the benefits of the tax prep program to her grandmother and others, Ms. Brady gave a tough luck it's not coming back response. To several impassioned personal accounts on the adverse impact of risk-based lending at SECU, Ms. Brady heme-and-hawed to a "I'll take a look at it" response, but that she'll actually do nothing was clear. French queen Marie Antoinette could not have said it better.

In the political realm, Ms. Brady assured the SEANC Board that H. 410 "was not SECU's bill"- she was just trying to help out other credit unions in North Carolina. That statement will come as a surprise to many legislators, lobbyists, N.C. credit union leaders, and many SECU members and staff. Would appear that SECU would now like to stick Dan Schline, CEO of the Carolinas Credit Union League, with the fallout from the potential defeat of this high-risk legislation. Getting crowded under the bus, but room can be made for Dan!

Ms. Brady summed up by categorically stating that SECU had no plans to expand membership. None, no way, not-a-bit!  Mark  Fleming, the SECU Board member, seemed to cheer on those remarks, raising no objections. After the meeting, I introduced myself to Mr. Fleming and asked if he were aware of the increasing controversy arising over SECU? He said "he had gotten 2 or 3 emails". I pointed out to Mr. Fleming that the current SECU CEO had stated unequivocally to advisory board leaders that SECU did in fact have plans to expand [here (again!) is SECU's own Fireside Chats video at 22:21 - "We would like to, we would like to expand our field of membership..."].

But the real cruncher to Mr. Fleming was I informed him that I both knew and could document that he personally sat through several Board discussions on expanding membership at SECU. Most egregiously was the discussion - in which Mr. Fleming was directly involved - of using the SECU Foundation as the vehicle to expand SECU membership willy-nilly. The scheme being if any person in the world chose to make a donation to the SECU Foundation, then that "anybody and everybody" individual (or corporation under H. 410!) would be eligible to join SECU. Mr. Fleming said: "Well, I don't know anything about that." Yes he does!

Something is sorely wrong at SECU.  Especially if, SECU Board members are endorsing public statements by senior staff to SEANC members which simply aren't true, as happened this weekend. 

... and even worse, if the SECU Board and senior staff are coercing front line staff - in fear of their jobs - into remaining silent about what is actually coming down at SECU. What's "coming down" are assets, member service, employee morale, and a hard-earned reputation of trust.

And, Mr. Fleming, a "Well, I don't know anything about that" defense isn't going to hold up in the court of public opinion, especially when it is well-documented that you in fact do know better. 

..."courting" disaster?

 

* SEANC = State Employees Association of North Carolina