What Is the State Employees’ Credit Union (SECU)?

The term State Employees’ Credit Union (SECU) refers to a nonprofit financial
institution that is owned by employees of the state of North Carolina. The SECU was
founded in 1937 and is one of the largest credit unions in the United States by
asset size and number of members. The credit union's main purpose is to provide
affordable financial services to its members including checking and savings
accounts, loans, mortgages, and investment savings vehicles.

How the State Employees’ Credit Union (SECU) Works

Employees of the state of North Carolina founded the SECU in 1937. The union was
formed to provide consumer financial services to state and public school employees
along with their families. At the time it was developed, the SECU had less than two
dozen members and about $450 in assets. As of June 2020, the union's assets grew to
$45.2 billion1 with many as 240 offices across the state that serve more than 1.7
million members.2 SECU has a network of 1,100 automated teller machines (ATMs)
situated in every county in North Carolina.

In order to become a member, individuals must be employed by the state of North

Carolina. Federal employees who work for North Carolina state agencies, people who
work for the state's public school boards, members of the state's National Guard,
certain county employees, and retirees from any of the above also qualify.
Membership also extends to certain family members including spouses, siblings, and
children of existing members. Those who fall into any of these categories can
become members by opening a Share Account—a savings account—with a an initial
minimum deposit of $25.

Qualifying individuals can become members of the SECU by opening a Share Account
with an initial minimum deposit of $25.
As mentioned above, the main purpose of the union is to provide its members with
affordable and accessible financial services. These services include:

Basic banking services: Checking and savings acccounts

Loans: Personal, student, automobile loans, and mortgages
Credit cards
Member deposits with SECU are federally insured by the National Credit Union
Administration (NCUA), one of the two organizations that offer deposit insurance—
the other being the Federal Deposit Insurance Corporation (FDIC).

Over time, the union expanded its offerings to include investment accounts, estate
planning, trust services, and insurance products. SECU’s investment accounts help
members save for retirement and education by providing low-cost diversified stock
and bond mutual funds. Investment advisors assess a member’s goals and risk profile
in order to choose the best mutual fund for the member’s tax-advantaged or taxable
investment account. Members who want to invest in stocks, bonds, or other mutual
funds can do so online or with the help of assistance representatives. The
traditional, Roth, and simplified employee pension (SEP) individual retirement
accounts (IRAs) have no service or transaction fees. These accounts require a
minimum opening deposit of $25.

KEY TAKEAWAYS
The State Employees’ Credit Union is a credit union owned by employees of the state
of North Carolina.
SECU is the second-largest credit union in the U.S.
The credit union provides members with basic financial services, investment
services, and insurance products.
Special Considerations
According to its website, the State Employees' Credit Union actively takes part in
local communities by promoting financial literacy and education as well as other
outreach services.3 Among these is the SECU Foundation, which was founded by the
union's members. Chartered in 2004, it supports community projects in housing,
education, and health care in the state, along with high school and college
scholarships, and special grants. Some of these programs include:

The SECU Commons, which provides housing for homeless families, youths soon to be
out of foster care, and autistic young adults
Good Shepherd, which offers permanent housing to seniors, veterans, and the
disabled
A Chef’s Life, which creates awareness and provides support for local food
producers
The People Helping People Scholarship Program, which sends students to a four-year
public university
The foundation is funded by the $1 monthly service charge paid for by members with
a SECU checking account.

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ARTICLE SOURCES
Related Terms
Credit Union Definition
A credit union is a member-owned financial cooperative that is created and operated
by members and shares profits with owners. more
Bank
A bank is a financial institution licensed as a receiver of deposits and can also
provide other financial services, such as wealth management. more
Federal Credit Union – FCU
A federal credit union is a credit union regulated and supervised by the National
Credit Union Association (NCUA). more
Credit Union National Association (CUNA)
The Credit Union National Association (CUNA) is a trade organization representing
the interests of credit unions in the U.S. more
Underbanked
Underbanked is a term referring to people who use fewer banking services, relying
on cash more than checks, credit cards, and other financial products. more
Building Society Definition
A building society is a type of financial institution that provides banking and
other financial services to its members. moreWhat Is a Building Society?
A building society is a type of financial institution that provides banking and
other financial services to its members. Building societies resemble credit unions
in the U.S. in that they are owned entirely by their members. These societies offer
mortgages and demand-deposit accounts. Insurance companies are often major
supporters.

KEY TAKEAWAYS
Building societies provide banking and other financial services to their members.
They are similar to credit unions and savings and loan institutions, but their
members are typically those in construction trades, real estate, or co-op housing.
Building societies are conservative in their approach to investment and savings as
compared to banks or other financial institutions.
Understanding Building Societies
Groups of co-op savers in the building trades first introduced the term "Building
society" in 19th-century England. These institutions are now major competitors of
banks in the U.K. and are the equivalent of U.S. savings and loan institutions.
Building societies can also be found in other countries, such as Australia,
Ireland, and Jamaica.

Building societies are different from banks. The latter are generally listed on
stock exchanges and accountable to stockholders. On the other hand, building
societies are cooperative groups, completely owned by their members, each of whom
has a vote. Building societies in the U.K. are also not allowed to raise more than
50% of their funds from wholesale markets. On the other hand, banks have a diverse
array of funding societies from open markets to bond issuances to investment in
commercial markets. Some have argued that this is a significant advantage that
banks have over building societies.

That said, some building societies also made the same irresponsible investment
decisions as banks during the financial crisis and had to close down or be rescued
from bankruptcy. The number of building societies in the U.K. has declined from a
high of 55 in 2008 to 43 in 2019.

Building societies have a particular focus on savings and mortgage lending.

Mortgage lending is the act of lending a debt instrument that a specified real
estate property secures in the form of collateral. A borrower is obliged to pay
back this collateral with a predetermined set of payments. Mortgages can help
individuals and businesses, who buy into a building society, make large real estate
purchases without paying its entire value upfront. Over a period of several years,
the borrower will repay the loan for the property, plus interest, until he or she
eventually owns it free and clear.

Mortgages are also known as "liens against property" or "claims on property." If

the borrower stops paying the mortgage, the building society may foreclose on it.

Building Societies Versus Credit Unions

Members (or a "mutual") entirely own the 43 building societies and six credit
unions in the UK, which is similar to the structure of credit unions as known in
the United States. More specifically, credit unions can range in size from small,
volunteer-only operations to entities with thousands of participants. Large
corporations, organizations, and other entities may form credit unions for their
employees and members.

Most credit unions follow the basic business model of members pooling their money
via purchasing shares in the cooperative. In exchange, they receive the ability to
request loans, open demand deposit accounts, and obtain other financial products
and services among each other. Any income generated generally goes towards funding
projects and services that will benefit the community and interests of its members.

In some cases, credit unions can be at a disadvantage to larger banking

institutions if they have fewer brick-and-mortar locations to service clients who
like to transact in-person. Most credit unions will offer online banking and auto-
bill pay but rarely at the level of T.D. Bank (one of the big six banks in Canada),
for example.

Examples of Building Societies

Nationwide was the biggest building society in the U.K. in 2019 based on the number
of assets owned, followed by the Coventry and Yorkshire financial institutions.
Skipton and Leeds rounded out the top five building societies. These groups compete
with each other on the same parameters as other financial institutions, such as
interest rates and number of withdrawals.

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