SECU: Wall Street's Latest "Charging Bull"?

  

      😎  Or: How To Kill A Unicorn -The "Fee-Bull-minded" Way

 

Article: "When It Comes to Junk ..." [March 4, 2024]

... one segment of the industry appears to be lagging behind: credit unions. 

 "Consumer Reports has frequently recommended credit unions because the earnings they generate are effectively returned to their customers in the form of higher savings [!] and lower lending rates. So it’s both surprising and troubling that some credit unions are going hog wild on junk fees, even as many of their larger for-profit counterparts are trying to kick the habit. "

"On top of all that, we know that overdraft fees and NSF fees disproportionately hit people of color and consumers with lower incomes and less education, [Sound familiar? RBL!] and furthermore that 80 percent of these fees are paid by only 9 percent of customers."

"This may be the most troubling issue when it comes to credit unions that generate big portions of their earnings through fees. As nonprofit institutions with a responsibility to promote their customers’ financial health, they get a pass on many banking regulations (as well as corporate income taxes). Yet some appear to have built their business models around collecting excessive fees from their most vulnerable consumers."

"In this respect, fee income is arguably part of a broader concern: 

✅ That certain credit unions are exploiting their exemption from banking regulations while behaving more and more like banks."

"Aaron Klein, an economist at the Brookings Institution think tank, who has been critical of that kind of mission creep, [commercial lending, anyone-can-join, H410] points to fee-reliant credit unions that have bought NBA stadium naming rights and corporate jets [and yachts?]. “That is not what the credit union movement is about or what it was founded for, ” says Klein."

✅ Would hope that this article - from our "former friends"! - speaks clearly to the SECU "We Are Board" about their destructive policies and practices over the last 3 years. Those "bullish" missteps are not only financially costly as the financial statements reveal, but are also quickly and loudly destroying the positive reputation and trust SECU had established over the preceding 85 years.

1. "As nonprofit institutions with a responsibility to promote their customers’ financial health.    
   
2. "Credit unions are exploiting their exemption from banking regulations while behaving more and more like banks."
   
3. "Mission creep."
   
4. "Disproportionately hit people of color and consumers with lower incomes and less education"
5. "That is not what the credit union movement is about or what it was founded for." 
      

... Yep, it's definitely bullish...!

 

 

 

[link to Consumer Reports - 3/4/2024]

The North Carolina Credit Union Division: What's The "Hold Up"?

... Esse Quam Videri

To: Ms. Kristina Ray

Administrator, North Carolina Credit Union Division

Dear Ms. Ray,

Thank you for your March 6, 2024 response to our letter of February 29, 2024, requesting a copy of the complaint, which you filed on our behalf with SECU in August, 2023.

In response, you provided two informational letters dated July 11, 2023  and August 11, 2023 which we had sent to you. Thank you, but we already had those two letters.

We would again request a copy of the full complaint which you filed on our behalf - described by SECU as  "... the correspondence and other information (the "Complaint") you provided...". It seems reasonable to ask you for  a complete copy of  "our complaint".

This process is now in its ninth month, which seems excessive. We are also approaching an April 9, 2024 deadline for the next meeting of the North Carolina Credit Union Commission, without clear answers from you on these issues.

On September 1, 2023 you sent a letter acknowledging receipt of the August 28, 2023 response from SECU. In your letter you stated: "We are reviewing SECU's response as part of our investigation."

Ms. Ray, if you are unwilling to provide a complete copy of "our complaint", would you please provide us - and all SECU members - at least with the results and final determination of your investigation?  We can not find any record of your decision.

Ms. Ray, perhaps we should point out more clearly that "our complaint" was more about the Credit Union Division's lack of enforcement of the law, than any violation of the law by the Credit Union.

We remain convinced that the Administrator's required, statutory approval of all credit union bylaw amendments has not been properly upheld.  But, over the last nine months, we have not been able to get a firm answer from you on "our complaint" over this lapse in supervision.

We again ask and hope for your prompt, definitive response.

Sincerely,

Jean and Jim Blaine

March 11, 2024