This week’s blogs are video excerpts of wisdom from prior credit union leaders. (best seen in browser mode)
They still speak to our present circumstances as their core messages are timeless.
Grantng credit is the primary function of a cooperative. In the last 20 years risk based pricing has become the dominate practice for consumer loans. It appeals to conventional wisdom. Those who have financial success should not pay the same rate as those who have blemished credit.
However, credit unions were supposed to be a paradigm shift from the free market theory that anyone should have credit available-at the right price.
Jim Blaine, former SECU (NC) CEO, believes the initial credit union lending approach is core to the cooperative model. Risk based pricing for loans discriminates against those who most rely on credit unions for a fair deal.
In this three minute video from 2010 he provides his logic. Although retired in 2017, he continues to expand his arguments with recent studies in his blog SECU-Just Asking.
One interpretation of Jim’s approach is in this 2010 GAC interview with Wayne Vann, CEO of NavyArmy Credit Union (now Rally CU). His two keys: putting a pulse to every loan and the autonomy of lenders to make decisions. (1.14 minutes)
(https://www.youtube.com/watch?v=rSXa3T8iGTY)