From Your CEO — Summer 2020

So much has happened in the last few months—almost every SESLOC member has been impacted from the pandemic, the swift collapse of the economy and the strain of social unrest due to inequality. The cooperative philosophy of credit unions has always supported the notion of equality for all members: one member, one vote, one voice. There are no stockholders. Our earnings are used to keep rates  competitive and fees low, and to provide financial access to all.

That philosophy was never demonstrated more clearly than over the last ninety days. We processed payment deferments on $75 million in member loans, helping so many forge a path through the pandemic, mitigating some of its impact.

We funded nearly $6 million in Paycheck Protection Program (PPP) loans to 160 entities in the community. I am proud to share that our average loan was about 25% of the size of the local bank loan average. As a credit union, our motivation was not to maximize fee income from granting these loans, but to help our locally-owned small businesses and non-profit organizations. Our friends and neighbors are the faces behind these businesses, making the Central Coast so special.

SESLOC began offering assistance loans before any government agency required it, and we also complied with mandates from the federal CARES Act and the state FFCRA to help our employees. Financial institutions are highly regulated institutions, and as with all sectors in America, the circumstances forced us to implement quick solutions with shortened due diligence. Our own regulators strongly encouraged us to act quickly to rebuild the economy in our region. We’ve been committed to doing the right thing since day one of this pandemic. However, given the growing number of class action attorneys in California and the uncertainty of state and federal mandates, we do feel that future protection from frivolous lawsuits is a safe precaution. Recently you received an update to the Arbitration Agreement. This wasn’t meant as a negative action toward you. This language is intended to protect you, the membership, and the credit union from potentially paying large legal settlements from your Net Capital due to the speed of implementing mandated programs during a time of crisis. SESLOC is now further protected from being dragged into frivolous class action lawsuits.

These last few months produced a silver lining: one of the most outdated regulations in this age of technology has been Federal Regulation D, which limited your withdrawals and transfers from
savings (online and electronic overdraft) to six per month. Tied to old reserve requirements, it was a hard argument to sustain when the Federal Reserve moved the overnight rate to one basis point. This regulation was temporarily repealed in April of 2020.

In close, we are all learning to change a little more. Let’s change in the right way, with respect and kindness. May you all stay safe as we continue on this journey through the pandemic.

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