State Employees’ Credit Union has had two CEOs since 1979, when the Raleigh-based institution had about $300 million in assets.
When Jim Hayes starts as CEO this week, he’ll be in charge of a $50 billion institution that has expanded by more than 50% in the last five years. It has more than 2.6 million members and 7,000 employees with offices in every N.C. county.
Given that track record, I asked board chair Bob Brinson why SECU hired an outsider to lead what has become the nation’s second-biggest credit union. Since 2012 Hayes has led Andrews Federal Credit Union, which is based in a Washington, D.C. suburb and has about 140,000 members and $2.2 billion in assets. He previously worked in federal regulatory jobs involving credit unions and savings and loans.
The search committee and board concluded that Hayes had a solid track record, an innovative style and a respect for tradition that made him the top choice of various external and internal candidates.
Brinson acknowledges that the difference in size and scope will be a big step for Hayes, who has led a credit union that mainly serves employees of the military’s Joint Base Andrews since 2012. The Andrews institution was named both the Army’s “Distinguished Credit Union of the Year” and the “Air Force Credit Union of the Year” for its programs to assist military members during the pandemic.
Smaller institutions can be more nimble and innovative than giant organizations and take more chances on new services and products, Brinson notes. SECU “is like a big ocean liner that can be hard to turn because changes often are expensive.”
As an example, he cites the credit union’s mobile app, which he terms effective but needing an upgrade to stay competitive with rivals.
In North Carolina, the $3.3 billion Winston-Salem-based Truliant Federal Credit Union is an example of a smaller peer that has been quite aggressive in geographic expansion and offering new services.
Jim Blaine led SECU from 1979 to 2016, while 44-year veteran Mike Lord has been CEO for the last five years. They helped build a solid staff that doesn’t require a major shakeup, says Brinson, who has been a veteran technology executive in N.C. state government.
Some candidates for the job “were clearly going to come with an entourage of senior executives,” which didn’t impress the search committee, Brinson says. Hayes showed an appreciation for SECU’s track record, which has made it a “jewel of the credit union industry,” he adds. “He indicated he’d like to keep his hands off the wheel for a while” before instituting significant changes.
Still, the board expects Hayes to bring new ideas and vision. That includes a look at examining SECU’s strategy of offering the same loan terms to its members regardless of their financial status. Unlike virtually every other U.S. financial institution, including its peers, the credit union charges the same interest rate to a member with a big net worth as someone who is living paycheck to paycheck.
That strategy reflects SECU’s commitment to fairness and to distinguish itself from for-profit rivals. But it also can make it difficult to offer competitive rates to more affluent members, who may get their homes and vehicles financed at lower rates by rivals, Brinson says. The credit union remains solidly profitable and well-capitalized, but tightening interest rate margins are challenging for all financial institutions.
“We believe that Jim is the kind of person who should be involved in thinking about what would work well for our members and the credit union.”