"Our earnings came in strong at $209 million, and while that’s quite a bit lower than the $587 million of the previous fiscal year, I’m happy to report that the lower earnings resulted in more money in the pockets of our members in the form of higher deposit rates." The full text of the email to all SECU members dated 8/27/2024 can be found here on the SECU website.
She conveniently left out of her message that due to mistakes by the Board and Management there would have been much more money available to pay out to members in the form of higher deposit rates.
If they had:
1). Not borrowed $5 billion from the Federal Reserve Bank at a cost of $169 million in interest. Had they instead just raised deposit interest rates higher and faster, they would have retained the $5 billion in deposits that ran out the door to other institutions. $169 million could and should have been paid out to members in higher deposit interest rates! SECU would have retained the deposits and our members would have benefited from the higher rates; instead, the Federal Reserve Bank benefited!
2). Collected rather than charged off $250 million in loan losses because they centralized past due loan payment collections into one Call Center which was an utter failure. SECU loan losses should have been $100 million and likely would have been if they had let the 275 branches collect the loans from their local members as the practice had been for decades. That’s an additional $150 million that could have been paid out to members in the form of higher deposit rates.
3). Not had to realize a loss of $43 million on sales of Investments to provide liquidity to make loans and pay out the $5 billion in deposit withdrawals that should never had happened in the first place. That’s $43 million more!
That’s a total of $362 million ($169+$150+$43 = $362 million) that should have/could have been paid out to members in higher deposit rates in 2024 but wasn’t!
These are major operational blunders by management and the Board which our members are paying for in the form of higher loan interest rates and lower deposit interest rates.
SECU members deserve better! They should be demanding better!
Mike Lord
Past SECU CEO, CFO and 46 Year Employee
Be the difference. It is your credit union, vote for the member-nominated candidates.
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