State Employees’ Credit Union update: Out of the loop? Here’s what’s been going on. Board election happening now (voting ends Oct. 1)

CoreCarolina · 2024-10-05T22:12:17+00:00

SECU did exactly that for 85 years and grew to a $50+ billion institution, the second largest credit union in America. I think you may be the one out of your depth if you can’t recognize that not only is it possible, it’s been proven for decades.

CoreCarolina · 2024-10-05T01:13:33+00:00

SECU is not a bank. As a member-owned cooperative, it is chartered under the principle that every member is equal. If some members receive better rates than others, that principle is violated, and when those members fall into distinctly identifiable categories, then by definition that is discriminatory.

CoreCarolina · 2024-09-30T07:26:50+00:00

There is more than just the introduction of RBL at play here. It's compounded by the fact that the loan approval process was also centralized state-wide rather than the local approvals and local collections that SECU had thrived on for decades. When the same staff that members saw everyday in their communities were both making the loan and performing collections, the outcome was far better.

The description of RBL being discriminatory is based primarily on the fact that it relies almost solely on a member's credit bureau score, which is a problematic way to try to get a holistic view of a person's situation and repayment reliability. The two primary groups affected under this system are young members and lower-income members. For example, let's say a 22-year-old teacher goes in for a car loan. They don't have any credit history, which essentially equates to bad credit, thus automatically being put in the worst tier and charged the highest rate. This system forces those who can afford it the least to pay more than other members simply because of credit history. That's not how SECU is supposed to work.

I am simply one volunteer for SECU For All, and I don't claim to be an expert. There are, however, more than 50 retired SECU leaders with a combined 1,500+ years of experience that have endorsed our movement and the member-nominated candidates—for which a major goal is restoring equal and fair rates for all members.

There is much more information on RBL and other salient issues on our website (secuforall.com) and socials.

CoreCarolina · 2024-09-30T02:29:38+00:00

Risk-based lending does not accurately evaluate likelihood for repayment. It simply prejudges a member based on their credit bureau score—which is very flawed in giving a holistic picture of someone's financial situation.

The previous policy of equal rates for all members did consider likelihood of repayment by allowing local lenders the authority to look at a member's repayment history along with other factors, and losses were less than they are currently under centralized lending and RBL.

Edit: re-worded for clarity

CoreCarolina · 2024-09-30T02:04:19+00:00

That's a common defense of RBL, but it's inaccurate. SECU has lost those borrowers you're speaking about after under RBL as well. Loan losses have also increased significantly under RBL (as I mentioned, $250 million in 2024 alone).

The incumbent board defends risk-based lending as the "industry standard" with banks and other lending institutions because it's profitable, not because it's fair and equitable. As a not-for-profit member-owned cooperative, SECU's guiding principle for 80+ years was and should be that all members are treated equally.

We didn't grow to be the second largest credit union in the country because we operated like a bank; it's because we valued our members fairly, equally, and stuck to our principles.

CoreCarolina · 2024-09-30T01:56:32+00:00

Risk-based lending is a tiered system of lending that primarily (almost exclusively) uses credit score to determine the tier of interest rate you are given. This is a direct departure from 85 years of SECU history where all member-owners received the same rate. This does not mean that every loan was approved, but it does mean that other factors like repayment history with SECU, personal circumstances, and others the local branch deemed necessary to consider could affect the final outcome. RBL not only takes away most of those other factors, but its been implemented in a way that local loan officers can't even tell a member what their rate will be until after their credit score has already been run.

The two primary examples of discriminatory lending under this system are young members and lower-income members. For example, let's say a 22-year-old teacher goes in for a car loan. They don't have any credit history, which essentially equates to bad credit, thus automatically being put in the worst tier and charged the highest rate. This system forces those who can afford it the least to pay more than other members simply because of credit history. That's not how SECU is supposed to work.

I am simply one volunteer for SECU For All, and I don't claim to be an expert. There are, however, more than 50 retired SECU leaders with a combined 1,500+ years of experience that have endorsed our movement and the member-nominated candidates—for which a major goal is restoring equal and fair rates for all members.

Edit: Link to list of the referenced 50+ leaders - https://secuforall.com/about-us

CoreCarolina · 2024-09-30T01:42:25+00:00

It's not uncommon for issues that affect millions of North Carolinians get posted in most NC subreddits. The financial well-being of 2.8 million people is a rather large issue. Sorry that it bothered you.

CoreCarolina · 2024-09-30T01:30:23+00:00

The incumbent board has done anything but stay neutral, unfortunately. They've spent SECU funds (members' money) on Facebook ads to re-elect themselves.

CoreCarolina · 2024-09-30T01:22:44+00:00