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Conference 7.286::dcu

Title:	DCU
Notice:	1996 BoD Election results in 1004
Moderator:	CPEEDY::BRADLEY

Created:	Sat Feb 07 1987
Last Modified:	Fri Jun 06 1997
Last Successful Update:	Fri Jun 06 1997
Number of topics:	1041
Total number of notes:	18759

525.0. "White House Credit Union" by AOSG::GILLETT (Petition candidate for DCU BoD) Thu Apr 16 1992 14:40

Ok, nobody has mentioned it yet, so I will.....

Did you hear on the news last night about the White House
Credit Union?  The report mentions that there is a credit
union, owned by staffers and White House members (including
its current residents), and that this credit union had
some $340,000 in delinquent loans, which amounted to a
delinquency rate of twice the national average.  The report
went on to say that in light of the Congressional Rubbergate
scandal, that the white house was taking steps to distance
itself from the credit union.  The reporter seemed confused
over how the credit union could be a seperate entity from 
the white house, even though it had an office there.

I see no parallels to DCU here, but thought instead that
DEC employees, with their legendary low delinquency rates,
appear to be a better credit risk than white house employees.

The report also shows how little-understood credit unions are
by the general population.

./chris

T.R	Title	User	Personal Name	Date	Lines
525.1		NETATE::BISSELL		`Thu Apr 16 1992 16:28`	5
	The Boston Glob reported that the Delinquency rate was around 3% which was twice the national average. Anyone know offhand what the DCU rate is ? is it lower than 1.5% ?
525.2		CVG::THOMPSON	DCU Board of Directors Candidate	`Thu Apr 16 1992 16:41`	7
	>Anyone know offhand what the DCU rate is ? >is it lower than 1.5% ? Referencing note 480.8, the DCU rate is not only lower then 1.5% it's lower then 1.0%. Alfred
525.3	It's a benefit ... no, it's separate	ERLANG::HERBISON	B.J.	`Thu Apr 16 1992 16:52`	10
	Re: .0 > I see no parallels to DCU here, ... Well, it was interesting to note that the White House was saying the credit union was `a totally separate entity', while just days before it had benefit for those working at the White House. Does that remind you of anything? B.J.
525.4		AOSG::GILLETT	Petition candidate for DCU BoD	`Thu Apr 16 1992 16:54`	7
	If I remember correctly, I seem to recall President Cockburn commenting in one of his "Meet the Prez" gatherings that the default rate was less than 1/2%. I think he was talking in specific about member loans, not business loans or participation loans to non-members. ./chris
525.5	DCU members are good risk	SLOAN::HOM		`Thu Apr 16 1992 19:31`	17
	DCU As of 1-31/92 -------------------- % Asset Loans Number 36,584 $ $218,867,611 $/loan $5,983 Loans delinq (2+ Month) % of # 0.8% % of $ 0.6%
525.6	Such a thing as too tight	GUFFAW::GRANSEWICZ	REAL CHOICES for a real CU!	`Fri Apr 17 1992 11:37`	13
	The number quoted in an annual report a few years back was .1% I believe. I will double check on it. While this is very good, it can also be very bad. DCU's 'conservative lending practices' have been so tight that even good credit risks have been turned away. DCU is now paying the piper with insufficient interest income since many DCU members took their very good business elsewhere. Like everything, there are tradeoffs. A credit union should be willing to take a risk on a member once in a while and work with people who might be in a tight situation. If we want a cold, hard bankers approach, there are plenty of places we can get that kind opf treatment.
525.7	risks vs loan rates	SLOAN::HOM		`Fri Apr 17 1992 12:06`	14
	> A credit union > should be willing to take a risk on a member once in a while and work > with people who might be in a tight situation. If we want a cold, hard > bankers approach, there are plenty of places we can get that kind opf > treatment. This is a very difficult balancing act. More risks implies higher default rate which means higher interest rates. You can't have both. What you do want is a review of borderline cases by a committee of peers - common DCU members. (Sound like more participation by the membership.) Gim
525.8		GUFFAW::GRANSEWICZ	REAL CHOICES for a real CU!	`Fri Apr 17 1992 12:18`	16
	RE: .7 Not necessarily true. If the loan requirements are so strict that good loan customers are denied loans, DCU loses interest income and has holds unproductive money. I'm not saying loan money to every Tom, Dick and Harry no matter what their credit rating is. I'm saying DCU's guidelines on what constitutes a good credit risk need to be re-evaluated. And yes, membership participation on the Credit Committee must be restored. That is what makes a credit union a credit union. If the member wants to appeal his loan refusal, then it should be reviewed. DCU members must not feel shafted by their own credit union. It is my firm belief that a credit union that does not shaft its members will generate much good will and loyalty. THAT is what keeps default rates low. People usually don't shaft people, organizations or businesses that have treated them fairly.
525.9		PICKET::KENNERLY		`Fri Apr 17 1992 13:41`	6
	The loans to which this low default rate refers must exclude mortgages since DCU sells them to a secondary market. Is that correct? I would assume mortgage loans are where the biggest amount of defaults have occured in other banks. Perhaps that is one reason why DCU's default rate is so low.
525.10	Tide may be turning now	ERLANG::MILLEVILLE		`Fri Apr 17 1992 15:29`	4
	Now that they have reduced their rates to being slightly lower than banks (Baybank = 8.5%, DCU = 7.9%), that tide may be turning. It turned for me, as indicated elsewhere. My $8700 car loan was moved to DCU earlier this week, with approval 1 hr 45 min after I initially gave them the application.