Looking For A Ray Of Hope... And Accountability.

 

Ms. Kristina Ray, Administrator of Credit Unions

November 19, 2023

Dear Ms. Ray,

We are writing to request a response to our letter to you dated October 25, 2023. In that letter we requested clarification from you on the following 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 earlier 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."

Your October 19, 2023 response failed to address directly the two questions asked. This will be our third request of you as Administrator for a clear answer on two simple questions. We would like to also point out that our first inquiry with you on this matter was on July 25, 2023.

We believe the answers are clear given:

"G.S. § 54-109.4. Amendments.(a) The articles of incorporation or the bylaws may be amended as provided in the bylaws. Amendments to the articles of incorporation or bylaws shall be submitted to the Administrator of Credit Unions who shall approve or disapprove the amendments within 60 days."

"G.S. § 54-109.12. [Credit unions] ...shall be subject to the management, control and supervision of the Administrator of Credit Unions as to their conduct, organization, management, business practices and their financial and fiscal matters."

But despite our belief Ms. Ray; as the Administrator of N.C. Credit Unions, you are the one State official designated with the statutory authority to interpret credit union laws and regulations. We simply ask that you do your duty in your role as the Administrator on behalf of the people of North Carolina

We would appreciate a timely response. If you intend to refuse to respond further would you please let us know. Thank you.

Jean and Jim Blaine

... third times the charm?

 

SECU - Moving In The Wrong Direction On Loan Administration: "We Have Met The..."

  Lots of controversy among members about the direction of SECU. 

Much has to do with the real and increasingly apparent declines in assets, in member service, in employee morale, and in the reputation for fairness the Credit Union had earned. Plenty of signs that these drops in quality are not just a matter of opinion or a mere difference in outlook - or culture. These are hard and soft dollar losses across many measures of performance and productivity. 

✅ Members are receiving less from their credit union while paying more - often much more.  

Easiest example is in loan performance. You probably have noticed much mention in the comments about the major Board and senior leadership snafu, resulting from the less than astute "centralization" of SECU loan administration and collections.

Previously, the origination, monitoring, and collection of loan accounts was managed at the branch where the loan was made. By utilizing the strong bond between local loan officers and local member borrowers; if problems arose, the local staff had the ability to work with members to find positive solutions. And again yes, unexpected, bad stuff does happen to some very fine members; and yes losses do occur. SECU historically had enjoyed one of the lowest loan loss (charge-offs) ratios among peer credit unions.  

  At 12/31/2021. SECU's charge-off ratio was .19%, about 2/10s of 1%! Even though the current SECU Board would lead you to believe that SECU borrowers were a bunch of n'er-do-well, non -"A-paper" slackers!

Take a look at the cost of that management "centralization" error to you as a member. When the current regime came into leadership in late 2021here were the delinquency/loss stats they inherited: 

 ✅ At 12/31/2021 

# of Delinquent loans:   12,148

$$$ Delinquent 60+ days:  $352,881,000

Total Charge-offs for year 2021:   $50,473,000 

 ✔ Results after the "centralization snafu"... losses up by over $45 million - up over 90%!

✅  At 12/31/2022

# of Delinquent loans:        25,909

$$$ Delinquent 60+ days:  $556,172,000

Total Charge-offs for year 2022: $95,535,000 

✔ But it gets even better!  Take a look at charge-offs so far in 2023...

✅ 1/01/2023 through 9/30/2023: 

Total charge-offs for the first 3 quarters : $122,000,000 

... it would appear that total charge-offs at SECU for 2023 will be 3 times the level of 2021 prior to the centralization of loan administration by SECU management. 

... SECU does seem to have reached "industry standard" on this one!