Project Differentiation

STATE EMPLOYEES' CREDIT UNION

State Employees' Credit Union was chartered in 1937 to provide North Carolina teachers, state employees, and their families access to an affordable alternative in the consumer financial marketplace. Choices were few in 1937; a new idea, a new deal, a new choice was needed. A cooperative, non-profit credit union - owned, operated, and controlled by the membership - seemed to provide the best hope, the fairest approach, the right answer.

SECU has built its reputation on a foundation of core values which it believes will stand the test of time, competitive forces, and changes in environmental factors. Those values are as follows:

We ensure that every member pays the same price

We keep all products as simple as possible

We provide better value

We provide convenience of location, technology, and access

Our bylaws affirm our vision and values by challenging SECU to:

The Credit Union was created to provide consumer financial services to its members. A safe haven for accumulation of savings dollars and a source of low cost credit are the primary service goals. Our vision, however, more broadly challenges the Credit Union to endeavor through any array of services to function as a positive force seeking to produce economic benefits for the membership. Additionally, our values obligate the Credit Union to pursue efforts to educate and inform the membership as to economic alternatives available to them as consumers and the implications and consequences to their financial well-being of each alternative.

SECU seeks to be known as diverse, dynamic, changing, responsive, credible, visionary, educating, fiscally sound - the best. We seek to be the benchmark by which other credit unions are measured.

We seek to be "a thing to behold". Much has been done, much remains to be done.

SECTION 1: SERVICE TO MEMBERS

All of our programs are designed to help the individual member reach a higher level of financial well being. Programs and services are designed to include all members rather than only the most financially fortunate members. Our goal is "shared success". The Credit Union is successful only if the membership achieves success. SECU's members are succeeding. Here's why:

Current services that help improve the economic and social well being of members:

CHECKING AND SAVINGS

Our low cost checking program has only a $1 fee per month. In addition, it earns interest at a rate that usually exceeds what other financial institutions pay for savings accounts. As there is no minimum balance required, this truly is a checking account that can be utilized by all members, regardless of the amount of money they make. Visacheck access is an additional benefit provided at no cost.

Our savings accounts are also designed with both high income and low-income members in mind. The share account only requires $25 to be on deposit and there are no other monthly fees. Our money market savings account only requires a $250 minimum balance. Both of these accounts offer superior interest rates, especially for our less financially fortunate members.

Many of our members use either the checking or the savings account as a place for their employer to direct deposit their paycheck. The employer in most instances requires the direct deposit. If our accounts had fees like other institutions, it would amount to people having to pay to get their paycheck. For employers without direct deposit, SECU provides payroll pick up services - manual direct deposit - for member/employer convenience.

By virtue of membership, a member may cash checks at any one of 135 branch offices. Many of these checks are personal checks, insurance checks, or from small employers. Branch service gives the member access to their money immediately and for free. Otherwise, many members would have to pay a check-cashing service a substantial fee for a simple, basic transaction.

One of the most embarrassing and expensive consumer financial mistakes is the "returned check". SECU provides full overdraft protection to all members from deposit, savings and loan accounts at a transaction fee of 50¢. For members having account management difficulties, account reconciliation services are provided without charge.

For members with special needs SECU offers a full array of enhanced services such as TDD, braille and large print statements, sight line checks, and all-member accessible branch offices.

By offering competitive rates on term certificates with a deposit as low as $250, we enable many people to earn top interest rates for their money on balances dramatically below the minimum balance required at other institutions.

SECU provides a full complement of regular IRA, Education IRA, Roth and SEP IRAs. Additionally, estate accounts are offered for members acting in the capacity of administrator or executor. All accounts are provided without service or administrative fees.

VEHICLE LOANS

We offer an extremely attractive car loan program at all times. By offering features such as no age limit on the autos used as collateral; financing up to four years on all vehicles and five years on most; and offering these loans at a rate that is often the best in the marketplace; we are able to put thousands of members into basic transportation loans without busting their budget or requiring them to pay high interest rates. By charging all members the same low interest rate, we routinely save members thousands of dollars on a single auto loan. This is money that helps the member live a better life and makes the community a better place to live. 110% financing is available to all members.

Carfacts, Web Carbook, and NADA valuation services are available to all members at no cost. An informed consumer is the best defense against unscrupulous sales practices.

UNSECURED LOANS

SECU still makes the $50 personal loan face to face when the member needs this service. Our minimum interest charge for a loan remains 50¢! No, the Credit Union doesn't "make money" on a $50 loan, but putting members first is the distinguishing hallmark of a non-profit credit union.

Our Visa program offers a low rate, 25 day grace period, no annual fee, and fees much lower than the vast majority of credit cards on the market. We have all seen examples where major national lenders charge fees which make a borrower pay back many times the amount they originally borrowed, with most of the money going to pay the late or over limit fees these lenders charge each month. This is another example of SECU's refusal to exploit the unfortunate in order to add a few dollars to the bottom line.

Computer loans for bridging the digital divide are available at a fixed rate of 7% for three years up to $2,500.

MORTGAGE LOANS

Our 100% first mortgage program is designed to put first time homebuyers with good credit and job stability, into a home without having to save a down payment. A competitive rate is offered and closing costs are often the only money a deserving member must take from their savings account. The Board has committed $250 million to this program.

The Homestead mortgage program offers the opportunity for first time homebuyers to obtain a home and even pays almost all of the closing costs. Deserving members can pursue the American Dream even if they have not been on their jobs for a long period of time and have had minor credit problems in the past. SECU provides 100% financing plus closing costs! The Board has committed $50 million to this program.

The Credit Union's adjustable rate mortgage programs require no private mortgage insurance, a policy that saves members money each and every month to spend on their families and in their communities. Origination fees are capped at $750.

We offer, with three years of good payment history and demonstration that the home is less than 90% loan to value ratio, an automatic reduction in the interest rate on loans originally at 95% LTV or 100% LTV ratio. This helps members by not forcing them to undergo the expense of refinancing their homes in order to enjoy a lower interest rate.

SECU pays interest on all mortgage escrow accounts.

We participate in the North Carolina Mortgage Certificate Program which provides qualified members with mortgage payment assistance.

CONVENIENT ACCESS

SECU operates 135 full service branch offices reaching every part of North Carolina with personal service and local decision making. We're there!

Our ATM network of 650 machines is very highly convenient to every member living in North Carolina. Our machines allow access to accounts without an extra fee tacked on to each transaction. These machines are good for everyone in the community, not just SECU members. SECU does not surcharge anyone for ATM access.

Phone Branch, Voice Response System, 800# access, fully interactive website - 7x24 service, 365 days a year!

OTHER SERVICES

Notary, stock signature guaranty, savings bonds, payroll deduction, and funds transfer - all without charge. Travelers cheques, money orders for minimal fees.

Golden Circle program of services for senior members and a College Package for the younger set.

Our policy of not charging different rates to different members demonstrates SECU's heart is in the right place. We have steadfastly refused to embrace risk based lending and thereby exploit our poorer members by charging higher rates to them just because we can. Moreover, by paying strict attention to limiting our expense to asset ratio, we are still able to offer rates that the most financially stable of our members find attractive. By saving all our members money, we help the community while other lenders would charge as much as they can without ever thinking of the good of the member or the effect on the community.

Our presence in the community causes other lenders to charge less for loans and to pay more on deposits in order to compete with SECU . This is good for the entire community, whether one is a member/owner or not.

NEW SERVICES PLANNED FOR THE COMING YEAR

The Fat Cat Youth Account will provide a special package of services and financial training for members up to 12 years of age.

Boats, motorcycles and manufactured housing programs will be revamped to be more relevant and affordable to current member needs.

College Vision Fund - A tax deferred savings program for college provided in conjunction with the State of North Carolina.

Insurance products designed for coverage of vehicles, homes and long term care.

IRNET, through the World Council of Credit Unions, offering reasonably priced international wire transfer services.

Trust Services in conjunction with several other credit unions to provide trust and estate management services to the average member at a fair price.

Add a mobile ATM unit.

SECTION 2: MEMBER EDUCATION

SECU has always considered member education to be an integral part of our commitment to improve members' lives. We have consistently covered consumer issues and advice through newsletter, brochures, periodicals and our website. Employees are encouraged to play an active role in communicating with and educating members.

CURRENT PROGRAMS THAT SUPPORT MEMBER EDUCATION AND ADVOCACY

The SECU newsletter, GRASSROOTS, is published twelve times per year and includes financial information, tax tips, and consumer advice.

WWW.NCSECU.ORG, the Credit Union website provides a variety of financial calculators, vehicle pricing guides, reference links, as well as full SECU product information and individual member account access.

Each branch provides a community bulletin board for local member use.

New employee packets are available to all state and public school departments and agencies.

Presentations and seminars are held for new employee orientation, benefit workshops, and employee retirement planning sessions.

Working with the public school systems the Credit Union offers teacher intern programs, job shadowing for students, career day presentations at high schools, and programs ("Choices: Increasing Your Options") designed to help children stay in school.

Job fairs are regularly conducted through the statewide community college system and through our universities.

Employment for high school students is provided through high school cooperative training programs.

Checking account management services are conducted regularly in middle schools in conjunction with our check printer.

NEW SERVICES PLANNED FOR THE COMING YEAR

Investigate National Endowment for Financial Education (NEFE) program supplied by CUNA.

Investigate the Jump Start national financial literacy program.

Develop full consumer insight information on the true costs to consumers of check cashing services.

Develop an effective credit counseling/debt management service for members.

Create an SECU Foundation to assist members and other North Carolinians with affordable housing and other community development opportunities.

SECTION 3: INVOLVEMENT/GOVERNANCE

SECU is a cooperative owned and operated by its members. Volunteerism is the essence of the spirit of the Credit Union. Helping others helps us grow as individuals and as an organization. Purpose above profit, and above self-interest assures that ethical principles - doing the right thing - always come first at SECU.

CURRENT PROGRAMS THAT SUPPORT INVOLVEMENT/GOVERNANCE

SECU is governed by a Board of Directors of 11 members who serve without compensation. The Board sets the policies under which the Credit Union is managed. All Board members are elected by the membership at the Annual Membership meeting.

The Board has altered the voting procedures to enable all members to put themselves forward as a candidate for director. Candidates need only be members with another member willing to second the nomination.

All members, regardless of their financial holdings, have only one vote.

Loan Review Committees composed of member volunteers retain the final loan decision review authority at the Credit Union. Members seeking a loan are always ultimately able to have their loan request brought before their fellow members for determination.

Each Credit Union branch has an Advisory Board composed of eight volunteer members who meet quarterly to discuss the operation of the Credit Union in general and the branch office. SECU has over 1,000 Advisory Board members.

Volunteer Advisory Board Members. Advisory Board members also assist the Credit Union by distributing information, recruiting employees, assisting with problem resolution and arranging presentations with local agencies. Advisory Board members host new branch "open house" ceremonies, employee/member appreciation day events, and serve as a liaison to the membership. Advisory Board members have been known to shovel snow, build shelves, wrestle with flooding toilets, help move, repaint, and change the air filters!

SECU annually conducts a member survey to determine the effectiveness of service delivery and new member service needs. Member satisfaction levels have exceeded 98% over the last two years.

Through both the newsletter and website members have an opportunity to voice concerns through the "Tell Us About It" feedback system. Each member comment is answered by the SECU President or a senior staff member.

SECU enlists active, involved members to routinely check on the quality of service through a "secret shopper" program. Employees receive direct, immediate feedback on how their service efforts are perceived.

NEW SERVICES PLANNED FOR THE COMING YEAR

Develop a "key contact" program which will identify and recruit a committed member volunteer in every school, department and agency in North Carolina.

SECTION 4: DIVERSITY

SECU has a diverse membership, a diverse group of volunteers, and a diverse staff. Our Credit Union is excellent proof that competence, creativity and compassion come in all shapes, sizes and colors - no ifs, ands or buts!

CURRENT PROGRAMS THAT PROMOTE DIVERSITY

Leadership training means operating an organization on a fully fair and impartial basis for both members and staff. SECU is a values based community servant.

Advancement based on merit; merit being who works the hardest and smartest.

Promote from within whenever possible.

Encourage success. SECU has produced 18 current credit union CEOs.

Policies and practices which treat all members equally.

Alternative career paths within SECU for employees with differing abilities, training, and backgrounds.

NEW PROGRAMS PLANNED FOR THE COMING YEAR

Spread the word that equality works!

SECTION 5: COMMITMENT TO THE CREDIT UNION MOVEMENT

SECU is a true believer in the philosophy of "People Helping People". We attempt to practice what we preach and preach what we practice.

CURRENT ACTIVITIES THAT SUPPORT THE CREDIT UNION MOVEMENT

SECU operates a proprietary shared ATM network (CASHPOINTS) providing cost effective access to North Carolina credit unions without a surcharge.

SECU shares facilities and services with the Local Government Employees' Credit Union ($250 million assets) and the North Carolina Press Association Credit Union ($2 million).

SECU has assisted in the establishment of the Latino Credit Union (assets $2 million) which is designed to serve the growing Hispanic population in North Carolina. SECU provides operational, training and data processing support for the Latino Credit Union.

All ATMs and forms are available en Espanol.

SECU helped secure an historic marker recognizing the establishment of the first credit union in the Southeast at Lowes Grove, North Carolina.

After Hurricane Floyd, SECU provided cash, loan, and facility services to Glaxo Credit Union, First Flight Federal Credit Union, and St. Luke Credit Union, which were all damaged in the subsequent floods. SECU also provided loan extensions, replacement checks, and emergency loan services to SECU members following the devastating floods.

SECU is a principal fund raiser for the North Carolina Credit Union Foundation, particularly its Prevent Child Abuse and Pediatric Bone Marrow lab projects.

Support is given to the North Carolina Credit Union Network Cooperative Ad Campaign. SECU also participated in the CUNA National Values Campaign.

SECU is a charter member of the Filene Institute.

SECU staff has worked in supportive roles with the North Carolina Credit Union League, First Carolina Corporate Credit Union, the North Carolina Credit Union Foundation, NLAC, Fannie Mae, CUES, Federal Reserve, and NASCUS.

SECU has committed certificate of deposit funds to numerous small credit unions in need of liquidity support.

NEW PROGRAMS PLANNED FOR COMING YEAR

Develop SECU Foundation to help support credit union movement activities.

Review investment in the Community Investment Fund (CIF) of the National Credit Union Foundation.

Push for national support for Anti-Predatory Mortgage Lending Regulation/Legislation.

SECTION 6: PUBLIC SERVICE/CORPORATE CITIZENSHIP

Public, community service is part of what we're supposed to be - as a Credit Union. We are what we claim to be - members, staff and organization.

CURRENT PUBLIC SERVICE ACTIVITIES BEING PURSUED BY SECU

Assisted with passage of Anti-predatory lending bill in North Carolina. Now advocating for national support for this issue.

Conduct a statewide voter registration drive with the State Employees' Association of North Carolina (SEANC).

North Carolina Ergonomics Resource Center video development on using ergonomics to reduce work place accidents and injuries.

Equipment, answering machine, furniture and fax machine donations to city, county, civic clubs, schools and other credit unions.

Availability of SECU Facilities for use by governmental agencies, schools, charities, and non-profit groups.

Richard Caswell Award sponsorship for state employees with over 45 years of service.

Sponsorship of the North Carolina Employees Memorial Awards for employees who lost their lives while serving the State of North Carolina.

Free account verification for departments of social service.

Prevent Child Abuse in North Carolina van ("Winnie") parking and storage.

DMV and DOT cash management programs reducing costs of funds handling for these two state agencies.

Charities, programs, involvement:

And, Kiwanis, Rotary, Altrusa, Lions, Optimists,

And, church, synagogue, mosque, temple, shrine,

And, coaching, little league, soccer, volleyball, cheerleaders, chess,

And, school tours,

And, carwashes!

And, and, and ...

SECTION 7: CLOSING

SECU intends to effect social change, to build better lives through a faithful commitment to the welfare of each individual member and the membership as a whole.

NEW PROGRAMS PLANNED FOR COMING YEAR

Why not change the world?