 A perspective is a point of view based on how one processes facts and experiences. The purpose of this column is to give our members a better perspective of the true value of ownership in Space Coast Credit Union. Many of our members see themselves as customers and nothing more. That is OK, because if they are pleased with the value they receive as a customer then we are serving their financial needs well. But the real value of the credit union is revealed by understanding the way our overall perspective guides how we serve those needs.
Why is it important to understand this perspective? Because that understanding helps you to know who you can trust.
There is much media coverage about the troubles in the home loan market due to sub-prime lending. Your credit union never engaged in such practices, which enticed people into home loans they could not afford through very low initial costs, followed by quickly-escalating rates.
At the apex of the housing boom, there were many who criticized our unwillingness to engage in these practices, which were reliant on home values continuing to escalate at an incredible pace. SCCU did not offer such loans because we did not think it was the right thing to do, even though that position was undertaken at expense of our short-term earnings. We stood by our fundamental principal that we will not generate revenues based on a lack of understanding by our members because, from our perspective, such behavior does not serve the long-term interests of our members.
The same goes for auto lending. For years, SCCU has provided vehicle financing at dealerships because it is convenient for our members to secure their car financing where they purchase their cars. Along the way, we have refused to engage in “buy rates,” a practice where a lender agrees to “buy” the loan from the dealer at a particular rate, and then allows the dealer to charge a higher rate to the customer and pocket the difference. The customer, of course, is never informed of this arrangement. Our unwillingness to conduct business this way has resulted in the lost opportunities for tens of millions of dollars of our members’ vehicle financing business, because some dealers direct that financing to lenders who allow them to make more money. Nevertheless, we will not conduct business this way because, from our perspective, it would not be right to facilitate our members paying millions in extra interest without their knowledge.
Even though we resemble other financial institutions in the products we offer, our cooperative structure creates a fundamentally different perspective. Because we are not controlled by for-profit stockholders, nor are we publicly traded, our perspective is not limited to the short-term profits that investors demand.
Our perspective compels us to strive to deliver long-term value within the households of our members. This drives us to act for long-term member benefit, even when the members may not recognize it at the time. You can rely on us not to have traps and lures to ensnare consumers into home loans they cannot afford to maintain, cars they cannot afford to drive, credit card debt they can never hope to repay, or fee structures they cannot avoid.
We do not always do things right, but we always try to do the right thing. We do not view our members as customers, but as valued owners. This perspective guides what we do, and how we do it.
Douglas R. Samuels
President/CEO
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