02/02/23

Happy Groundhog Day.

The North Carolina State Employees’ Credit Union is such an integral part of our state that it’s often taken for granted.

There’s nothing like it across the nation, I learned, while studying the $53 billion dollar enterprise for a story in the February Business North Carolina. In the ninth-most populous state, SECU dwarfs peers nationally other than he national Navy Federal Credit Union. California, Texas and New York have much smaller government-employee credit unions compared with SECU which has 2.6 million members, or a fourth of the N.C. population.

SECU is also very profitable, with capital that exceeds regulatory requirements. It has limited interest-rate or credit risk. It caters to member-owners because credit unions don’t have stockholders. 

SECU is a maverick. It offers the same rates for deposits and consumer loans for all customers, regardless of their net worth or financial status. Michael Jordan would get the same savings account interest and pay the same mortgage rate as the person sweeping the Spectrum Center floor. Other financial services company use credit scoring to offer better rates to wealthier customers.

Self-Help Credit Union co-founder Martin Eakes, a progressive-leaning expert on banking, calls SECU “the single best credit union in America, serving working-class people in every county in North Carolina.” 

But a couple of years ago, SECU’s board of influential state-government executives concluded privately that some change was needed. They want SECU to rethink how to balance its historic focus on core state employees with desires of more affluent members, many of whom also trade with other financial institutions. The board also favored making business loans and adding better technology.

In 2021, the board hired a veteran credit-union industry executive and regulator to usher in changes. New CEO Jim Hayes rolled out plans for new deposit and loan pricing strategies, business lending and improved technology. The pending changes have received little publicity.

The BNC story describes why two former SECU CEOs, who dominated the organization’s strategies over the last four decades, are vehemently opposed to the board-mandated changes. They say the moves will negatively affect a majority of existing customers and SECU's culture.

Former CEO Mike Lord, who preceded Hayes, says SECU can grow effectively by lowering its loan rates and raising its deposit payouts for all customers, rather than creating tiers.

A veteran industry consultant sums it up this way: Will SECU remain distinctive or follow the track of many other credit unions, which increasing look like stockholder-owned banks?

David Mildenberg
dailydigest@businessnc.com 

He helps people move up

Pasha Maher worked for Bank of America and LendingTree in Charlotte early in his career but wanted to make more of a social impact. The founding partner of Stiegler EdTech is passionate about helping people move up the economic ladder, following the example of his parents, who emigrated to Richmond, Virginia from Iran because of that nation’s political turmoil.

His father started off as a housekeeper, while his mother worked as a waitress. Both later attained professional careers and supported Maher, who is a 2013 graduate of the University of South Carolina.

“I wanted to make the American dream more accessible for other folks," he says. So with support from LendingTree CEO Doug Lebda and others, Stiegler EdTech was formed to create a 24-week training program to prepare students for tech careers. About 160 students, with an average age of 31 and previous annual income of about $21,000, have completed the courses and taken jobs with average starting pay of $55,000. Nearly 90% come from diverse populations that are underrepresented in the tech industry. 

With support from Ally Financial, US Bank and others, Stiegler EdTech pays each student $17.500 as part of the program.This eliminates excuses by students for not having time to focus on their studies, Maher says.

In this week’s Chatter with BNC podcast, I discussed Maher’s experience at the company, which is expanding into Detroit and MInneapolis, where Ally and US Bank are headquartered, respectively. It’s an interesting approach to workforce development. Previous expansion plans were delayed by the pandemic, but Maher and his partner, Tariq Bokhari, envision the potential for major growth.

The company name comes from the late Rick Stielger, who was a key architect of LendingTree’s software. He died at age 47 in 2004.

More growth on tap in center-city Charlotte

 More than $6.9 billion of apartments, offices and various projects are planned for Charlotte's Uptown and South end areas, according to the new "State of the Center City" report from Charlotte Center City Partners, Axios Charlotte reports.

Carroll joins Sanford Holshouser

Today's number: 100

Raleigh-based Curi Holdings agreed to merge with Edina, Minnesota-based Constellation, Inc. another medical liability insurance company, to create a business with more than $2 billion in assets and $400 million in annual revenue. Terms weren’t disclosed. Curi CEO Jason Sandner will lead the combined company, pending regulatory approval.

Old Dominion Freight Line said Kevin “Marty” Freeman will succeed Greg Gantt as CEO on July 1. Gantt has been the Thomasville-based trucker’s top executive since 2018, overseeng nine straight quarters of double-digit growth in earnings per share. Freeman joined Old Dominion in 1992 and has been chief operating officer since 2018.

Durham-based Wolfspeed will construct a new semiconductor production facility in Germany, adding to expansion plans recently announced for a plant in Chatham County. ZF, a global tech firm based in Germany, is buying “hundreds of millions of dollars” in Wolfspeed stock in a deal to help fund the latest facility.

Chinese manufacturer and exporter Henglin Home Furnishings is expanding in the U.S. Leading Henglin’s efforts will be former United/Lane Furniture executives Todd Evans and Ruff Thomas, who together have more than 40 years of experience in the industry.

State Insurance Commissioner Mike Causey said a settlement has been reached with insurance companies that will allow rates to increase an average statewide of 9.9 percent for rental properties starting in June. Last August, the N.C. Rate Bureau requested a statewide average 42.6 percent rate hike for dwelling polices spread over two years.

Rep. Keith Kidwell (R-Dare) has filled a bill, the Service Customer Equal Value Time Act, which would require that if your doctor or repair person cancels your appointment on short notice, they would have to pay you for your time. Should the bill become law, any service provider who charges customers if they cancel an appointment or are late would have to pay customers back if services are canceled or late.

One of Fayetteville’s new lawmakers, state Sen. Tom McInnis, wants North Carolina to consider converting Interstate 95 into a toll road to raise money to maintain, upgrade and modernize it. If there is a consensus in the legislature, McInnis expects a law would be included in an omnibus transportation bill.

A North Carolina Department of Transportation board recently approved acquiring the alongside the Cape Fear Memorial Bridge that was once slated for mixed-use development. Local and state transportation officials are studying how to approach a replacement of the aging bridge.