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Frequently Asked Questions

Answers to the most frequently asked questions about what’s happening at SECU.

There’s a lot going on at SECU, and we’re here to answer your most pressing questions. See below for answers to the most frequently asked questions about SECU, our Strategic Plan, and the future of the organization.

Financials

Is my money safe and sound? How is SECU prioritizing the financial health of our credit union?

As the nation’s second largest credit union, SECU remains in a strong position to serve members now and into the future. SECU generates solid earnings to create value for our members and support the maintenance of our capital reserves. The return on assets is 1.22% for the current fiscal year.

Classified as a well-capitalized credit union with more than $5 billion in equity and a capital to assets ratio of 10.36%, SECU’s capital levels insulate against a potential economic downturn. Furthermore, SECU maintains adequate loan loss reserves to ensure coverage for higher loan charge-offs in a possible worsening economy, and access to ample liquidity options to meet member and operational demands.

Strategic Plan

What is SECU’s strategic plan?

The strategic plan is a document developed in partnership with and approved by the Board of Directors in 2022 that outlines our vision for the future of SECU. Guided by four strategic focus areas: Member Experience; Employee Experience; Digital Innovation; and Safety and Soundness, the strategic plan lays out our approach to fulfilling the needs of our members, employees, and the rapidly changing financial services landscape.

Why has SECU developed a strategic plan?

Almost every organization has a strategic plan and roadmap to document its intended vision for the future. For SECU, this strategic plan allows us to prioritize efforts, effectively allocate resources and ensure the decisions we make are backed by data and sound reasoning centered on what is best for our membership. Simply put, the data shows that over the last several years, members have increasingly turned to other banks, credit unions, and other institutions for their financial needs. Beyond financials, these trends pointed to the fact that we weren’t always serving members in the way they wanted to be served and that change was necessary. The strategic plan is a direct response to protect and sustain our ability to service our mission, realize our vision, and preserve the values on which we were founded – with members at the center.

How will SECU measure its progress against the strategic plan?

We have set four goals under each strategic focus area that we intend to realize by 2027. The strategic plan details success factors for each goal, but the true measure of success is the engagement and satisfaction of our members and staff. Put simply, these goals are to:
• Create products, services, and outreach that drive member value (Member Experience)
• Increase investment in employees to attract and retain top talent (Employee Experience)
• Service members in the capacity and channel in which they want to be served (Digital Innovation)
• Protect and position the organization for maximum impact (Safety and Soundness)

Is this new strategic plan aligned with SECU’s mission, vision, and values?

Our mission has not changed for more than 40 years, and we don’t plan to change it. SECU has thrived for 85 years because of its ability to adapt to meet the changing needs of the membership we serve. In line with our mission “to be the trusted provider of financial services to every eligible member and to enhance the value of their lives and financial well-being while maintaining our fiscal strength,” we must continue to put members at the center, and the strategic plan does just that. Members expect more from us. Combined with direct feedback from our members and employees about why engagement was declining, the strategic plan was devised to help SECU “Do the Right Thing” and provide tailored solutions to help meet members’ needs with the next 85 years in mind.

Is SECU moving away from serving people of modest means?

No. We are proud to serve a diverse membership that includes people of all financial backgrounds. We unequivocally remain committed to serving members of modest means through competitively low rates, fewer fees, higher savings rates and financial resources. And we continue to increase our funding to support those in need through the SECU Foundation, which puts our motto of “People Helping People” into action around the state. Since the Foundation was established, the SECU Foundation has contributed $235 million in grants, loans and scholarships, including more than $60 million directly invested in North Carolina’s most economically distressed communities.

Is SECU reducing its focus on state employees?

No. State Employees’ Credit Union will continue to put the financial needs of all our members, including our state employees, first in everything we do.

Will SECU expand its field of membership?

SECU will never “allow anyone to join” without belonging to a permissible common bond. Thoughtfully expanding our membership, as we have done in the past, could allow us to serve North Carolinians in underserved and unserved rural communities where other financial institutions have closed. Additional member participation also means we are better positioned to offer members better rates, better services, and lower fees. SECU has absolutely no plans for an “open” field of membership nor are we considering expanding beyond North Carolina. Our focus, as always, remains on North Carolina and providing exceptional service to our members.

Lending Strategy

What is tier-based pricing? How is SECU changing its lending process?

We want to be the “go-to” trusted financial provider for all our members, serving all their financial needs. Offering competitive lending rates is part of that. Tier-based pricing is a standard credit union industry best practice, which involves estimating the likelihood that a loan will not be repaid as agreed using a member’s credit score and reflecting that probability in the loan’s interest rate. SECU has long used other measures of risk to set different interest rates on loans, including the term of the loan, type of collateral and more. SECU is now adding the member’s history of repaying other credit obligations—as measured by their credit score—as another factor in assessing the likelihood of a loan repayment.

How does tier-based pricing impact SECU’s membership?

Based on evaluation of past lending relationships with members, we know our membership has strong credit and will get better rates on loans from SECU under tier-based pricing. As opposed to charging all members the same rate, which has historically been higher than many financial institutions, tier-based pricing allows us to lower rates for new loans for the majority of members, while still offering highly competitive rates to our members with lower credit scores. This change better enables us to meet our mission of being the trusted provider of financial services to all our members.

How will SECU members with low credit scores be impacted by tier-based pricing?

Borrowers with low credit scores represent a small, and important, segment of SECU members. Our members with low credit scores will still be able to take out loans from SECU at highly competitive rates. Unlike some other credit unions and most banks that will not lend to borrowers with low credit scores at all or will lend with very high interest rates and fees, we are committed to protecting access to loans with competitive interest rates for members of all credit status. We are also very focused on developing other ways to continue to help the small and important portion of our membership whose struggles are reflected in their credit scores.

Will SECU offer Business & Commercial Lending?

SECU members from around the state, engaged in small business enterprises, continue to articulate a demand for small business services, particularly in rural areas with fewer and fewer alternative banking options. We are continuing to evaluate how SECU could meet this specific need but have no interest in the mainstream commercial lending or deposit services currently serviced by banks.

Credit Scores

Why is SECU using credit scores?

Credit scores help virtually all credit unions and other financial institutions across the country better understand the likelihood a particular borrower may default, while minimizing the impact of a potential default on the credit union – and by extension the membership – as a whole. It is important to know that credit scores are determined by several factors, but the biggest factor is how often a borrower pays their statement balance on time. If a borrower regularly misses payments, their credit score decreases. Other factors that go into credit scores include the amount you owe, the amount of time you’ve had credit, how often you apply for new loans, and the variety of credit products you have.

Will the existing interest rate on my current loan change because of my credit score?

No. Existing loans will not be repriced, and members will keep the same rate unless they choose to refinance.

Are credit scores reliable indicators of credit risk?

Yes. SECU is using FICO® Scores, which are reliable and objective measures of credit risk and are the most widely used credit scores among top financial institutions, including credit unions and banks.

Do low-income borrowers have lower credit scores?

Not necessarily. The relationship between income and credit score is the result of many factors. A high income does not guarantee a high score any more than a low income guarantees a low score. Understanding how credit scores work helps empower members to develop good credit, which is why we are so focused on making sure all members, regardless of income, have access to financial education and other resources to grow their credit scores. It’s important to note that income is not reported on your credit report and does not directly impact your credit score.

How is SECU helping members with low credit scores?

SECU is heavily investing in financial empowerment for members, with 1,037+ financial counselors across our branch network and new financial education resources currently on our branch website with more on the way. All members will have access to financial tools and guidance aimed at helping them budget and control spending, build better credit, and understand a range of financial topics. We also provide several loan options tailored to members with low credit scores to ensure every member has financial opportunity at SECU.

Digital Innovation

Is SECU going fully digital?

No. SECU will always maintain member access to in-person branch services. We are always evaluating updates to our digital systems and processes to help keep pace with the rate of innovation, while being careful to align expanded digital capabilities with true member needs. While there have been paradigm-shifting, game-changing advancements in the fintech space, we are resolute that these innovations will never fully replace the need for in-person engagement. We believe in the power of “People Helping People,” whether that’s understanding new systems, navigating new processes, or enabling better decisions about their money. Above all, we see our role as keeping an unwavering focus on member needs and letting those lead our case for innovation—not the other way around.

Is SECU going to close branches or decrease the focus on its branch network?

Absolutely not. One of SECU’s primary differentiators and what sets us apart is our people and our 100-county branch footprint. SECU is not SECU without the member experience we deliver through our branches, and we are looking for more ways to gather feedback from those of you on the frontline, working with members day to day, to guide our future path.