SECU Members Vote for Incumbent Board Members, Saving Controversial Risk-Based Lending Policy

Members of the $56.4 billion State Employees Credit Union (SECU) resoundingly voted for four incumbent board members, signaling the approval of the board’s controversial decision last year to implement risk-based lending policy versus a single low loan interest rate offered to all members for decades, at the nation’s second largest financial cooperative.

Four self-nominated candidates, who strongly opposed the risk-based model, challenged the incumbents at SECU’s annual meeting held Tuesday at the Kory Convention Center in Greensboro, N.C. Approximately 1,100 members attended the meeting and about 600 people watched it on a non-interactive live stream feed.

The incumbents and their final vote count included: Robert Brinson, 56,217; Mark Fleming, 53,974; Stelfanie Williams, 62,392; and McKinley Wooten Jr., 59,869. They will each serve for another three-year term.

The self-nominated board candidates and their final vote count included: Jean Blaine, 22,205; Susie Ford, 31,009; Julian Hawes, 31,203; and Russel Kirby Parrish, 28,600.

More than 8,000 members signed a petition to get the four challenger board candidates on the ballot. Members who opposed the risk-based lending model were well organized and set up a website and social media sites to encourage members to vote for their board candidates.

SECU also encouraged members to vote and promoted the incumbent candidates, recommended by the credit union’s nominating committee, on social media.

At last year’s SECU annual meeting, members voted for three self-nominated members to the board, which ousted three incumbents over the board of directors’ risk-based lending decision instead of maintaining the 87-year policy of providing a single low loan interest rate for all member loans based on collateral or loan term.

During her remarks at this year’s SECU annual meeting, Board Chair Mona Moon said the board strived to offer the best possible loan rates to serve all members.

“The previous one-price-for-all strategy prohibited us from doing that, which is why the board approved a tier-based pricing model for auto and consumer loan products,” Moon said. “While we chose to start with a five-tier rate structure based on credit scores, our board has consistently and continuously monitored the impacts of this model. And over the past year, we compressed those rates into an improved three-tier model. We also rolled out a discount loan program for qualifying current and retired state of North Carolina employees on our closed end consumer loans, adding even more value for our base membership. We’re excited to see members who were borrowing elsewhere come back to SECU for their lending needs.”

At last year’s annual meeting, SECU’s President/CEO Leigh Brady reported that from July 1, 2021, to June 30, 2022, SECU members borrowed $54.3 billion, but $41.8 billion of that $54 billion was borrowed somewhere else other than SECU. And 70% of those borrowers were high credit tier members.

At this year’s annual meeting Brady said borrowers are now coming back to SECU for loans because of the tier based pricing model. She reported at the end of Q4 in 2021, SECU’s member wallet share of consumer loans and credit cards was under 20% compared to more than 35% at banks. At the end of Q4 in 2023, however, SECU’s wallet share of consumer loans and credit card increased to more than 25% while banks declined to 29%.

SECU’s tier-based pricing model took effect in March 2023.