Voting started Tuesday for the State Employees Credit Union board, with a second year of contested elections and questions about the group’s willingness to answer spontaneous member questions at the October annual meeting.
The voting comes as the second-largest U.S. credit union reported a $209 million surplus in the fiscal year ending June 30. CEO Leigh Brady called the performance “strong” though “quite a bit lower than the $567 million” earned in the previous year, according to an Aug. 27 fiscal-year report.
In July, the SECU’s board’s nominating committee recommended four incumbent directors be re-elected. That prompted dissident members to nominate four other candidates.
Voting is allowed through an online portal or a paper absentee ballot through Oct. 1. SECU’s 2.8 million members can also vote at the Oct. 8 annual meeting in Greensboro. The credit union has about $50 billion in assets.
The incumbent candidates are: McKinley Wooten, an assistant secretary of the N.C. Department of Revenue; Bob Brinson, a retired state information technology employee; Mark Fleming, a retired vice president of government relations at Blue Cross Blue Shield of North Carolina; and Stelfanie Williams, a Duke University administrator.
The challengers are former SECU managers Susie Ford of Cary, Julian Hawes of Winston-Salem and Kirby Parrish of Johnston County, and Jean Blaine, the wife of ex-CEO Jim Blaine.
SECU’s lower earnings stemmed largely from its decision to raise rates on money market accounts and certificates of deposits, which has benefited members with about $500 million in added payouts, the group said in response to questions. The change followed declines in assets and deposits, marking a reversal from years of steady growth at the Raleigh-based institution. It remains well-capitalized.
SECU also was hit by an increase in the provision for loan losses because of higher charge-offs and a new accounting rule that requires recognition of “estimated expected loss for the entire life of the portfolio,” the credit union said. Previously, the methodology involved one or two years of expected losses.
At last year’s annual meeting, members elected three new directors: Michael Clements, Barbara Perkins and Chuck Stone, while ousting three incumbents favored by the board. The move stunned credit-union officials nationally given SECU’s prominence and historic success.
Should the four unendorsed challengers prevail this year, relative newcomers would hold a majority of the 11-member board. It traditionally has included prominent state government executives who live in the Raleigh-Durham area.
This year’s annual meeting will include a 60-minute session in which leadership will respond to questions submitted in advance by members. Jim Blaine says that is “simply an extension of the suppression of members’ right to speak,” following a bylaw change last year that added a two-minute limitation on comments with no discussion permitted.
Many corporate annual meetings include open question-and-answer sessions. SECU officials said they welcome questions and believe the new approach gives the group “time to pull together data and information to give a complete answer at the meeting.”
They also noted that “in some years, prior CEOs told the members what questions they should be asking and proceeded to answer those questions.”
Former CEOs Blaine and Mike Lord, who led SECU between 1978-2021, disputed that comment. “Members have brains and can ask any question they want. It’s their credit union,” Lord said. Prompting member questions “never occurred while I was there,” Blaine said.
SECU officials cited minutes from the 2007 annual meeting in which then-CEO Blaine “commented that he has two fears regarding the Annual Meeting: One is that no one will ask questions, and, two is that someone will! With that, he explained that he had “stacked the deck” for everyone by providing an initial list of questions he believed members should ask about their Credit Union.”
Over the past two years, Blaine has published nearly daily web commentaries citing declining financial performance and questioning decisions by the board. In particular, he has cited a March 2023 shift in auto and consumer loan policies that added tier-based lending. The change enables members with stronger credit histories to receive better loan terms.
Earlier this year, the board reduced its tier-based pricing structure to three tiers from five to ensure “fair and competitive rates for all members, while also analyzing credit risk in the current economy.”
The previous SECU “one price for all” policy was unique among U.S. lending institutions, and provided members with a B-minus to C-plus rate, officials say. Now, those with the weakest or no credit histories receive a C rate, while other members get more favorable terms.
