(bright synth music) - [Announcer] This is "Carolina Business Review."

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It is not the last stretch, but we are approaching the back straightaway, so to speak, of our high season of summer travel and vacations for sure.

Thank you for supporting the most widely watched dialog on Carolina business and public policy.

I am Chris William, and because of summer, it may still be a little slow around town these days, but it doesn't really mean that there aren't important things to talk about.

And we will.

We will unpack these things with our expert panel.

And later on, the chief executive officer of the country's second largest credit union, Leigh Brady, from North Carolina's state employee credit union.

Stay with us.

- [Announcer] Major funding also by Foundation for the Carolinas, a catalyst for philanthropy, and driver of civic engagement, helping individuals, nonprofits, and companies bring their charitable visions to life.

Truliant Federal Credit Union, proudly serving the Carolinas since 1952, by focusing on what truly matters, our members financial success.

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And, Martin Marietta, a leading provider of natural resource-based building materials, providing the foundation on which our communities improve and grow.

On this edition of Carolina Business Review Vicki Lee Parker High from the North Carolina Sustainable Business Council, Suzy Shannon of the South Carolina Council on Competitiveness, and special guest Leigh Brady, CEO of State Employees Credit Union.

(upbeat rock music) Hello.

Welcome to our program.

You know, personal - a point of personal preference.

Thank you both for driving in because you always do.

Coming in from the middle of the state from, you know, and coming up from South Carolina, we don't take it lightly.

We appreciate that kind of commitment.

So thank you both.

For our pleasure.

Happy to be here.

Happy summer.

We're still summer.

People are still vacationing.

You know, the beaches are packed, but Vicky Lee, like, zoom out a little bit.

You know, tariffs have waned and and ebbed and flowed.

What kind of what kind of anxiety is there about tariffs and how much of the anxiety is actual manifest.

Well, as, as you as you know, there's so many moving variables right now and that creates uncertainty and and when you're running a business, you know, you have enough things to deal with on a normal day of running your business.

You don't really want these added, variables out there that you don't know what's going to happen.

You're build.

You spent years, some businesses, decades to build up supply chains.

And, you know, they've nurtured those those supply chains and they know where things are coming from.

And now there's all this uncertainty around it.

So, you know, some things are stable.

And then the next day they're not.

So I think the biggest the anxiety is around a lot of the unknowns that are still forming around this.

I think initially we heard high numbers when, you know, the terrorists were going to be, you know, certain percentage that hasn't manifested.

So that has alleviated in one respect some regards that it's not as high as what was initially what people were thinking.

However, all the uncertainty is still creating a lot of angst.

You know, we've heard from some folks said the same thing, but they've also said, but our inventory in our supply chains have been able to give us a buffer.

So we're not worried about it.

Now, are you hearing that or for now.

But again, yeah.

When you as a business you're still looking out two, three, five years.

And right now you know, what does that look like.

And some people say, well, let's see what happens.

You know, you know, you're still trying to to plan.

But again, there's just so many, so many unknowns and so many things that are unpredictable right now.

So yeah, it's it may not affect you today, but then there's some people who who got through it.

They had to pay the tariffs.

I mean, some of our businesses had to pay as much as $10,000 to get some of that equipment in hand.

So, you know, they were able to do it the first round.

But, are you going to be able to withstand that if it if there's a second wave?

Susie, the animal spirits of the fear around tariffs and the manifestation.

Same question.

How do you look at that.

Yeah, so when you look at economic engines like advanced manufacturing that rely heavily on just in time inventory models, right.

So they're not going to be pulling on that inventory, you know, those component parts until they actually need them.

But I think, you know, similar to what Vicki Lee said, that, companies but manufacturers, tier one suppliers, anticipated what was coming, sort of looking in the crystal ball and seeing it pretty crystallized what was coming.

And so they sort of preordered, which was great for logistics and moving freight.

Right?

It was it was a kind of a boon to them for a while to be moving very quickly and moving a lot of volume.

But over time, that resiliency is going to start to break down.

And I think you're going to see shifts in how, you know, they may have to open up new warehousing, new distribution centers, keep them closer in and sort of add that buffer, you know, added buffer.

Is there that flexibility in the leaders leadership that you talked to about that can they can they not overuse this term.

But can they pivot that quickly for that?

Some can pivot and absorb.

Some not so much.

I think probably some of those small, small or medium size firms are going to feel the biggest punch on it.

We we've heard this term from an economist recently, Vicky Lee in the the term is low hire low fire.

And they're they're talking about jobs that there's low hiring but there's low firing.

And we got a recent the most recent about a week ago now number was slower job growth.

But still job growth is that does that square with you.

Is that what you said?

I think I saw even this morning where they're looking at revising some of the the job growth.

The previous reports.

So yeah, I mean we have to remember before heading into the world of tariffs and everything, we had a strong economy.

So there was still a strong wind at our back.

Initially.

And so we're still, we're still riding on some of that.

So we have again, these two layers going on.

But we did have a pretty robust economy with I growing a lot of things going on in the digital world.

So there are a lot of industries that are still pushing, you know, fought fairly strongly.

So we still have that wave that we're riding as well as we, you know, riding this undercurrent is how I kind of look at it with what's going to happen with the tariff, with all these other things.

So, so with the jobs, I look at it that way.

You know, we still got the strong economy.

So that's still growing.

But then you've got this all this other anxiety under, under underwriting that that are going to make those job numbers mixed.

So the jobs in South Carolina, how do you tease out the difference between is I just called it low, high or low fire.

And really the kind of jobs that are needed for things like Scout motors is just one of them, you know, the upstate, and it doesn't even include the upstate.

And what's going on in the low country.

So do those numbers distort the hiring?

So it's interesting.

So our Department of Employment workforce just put out the June jobs report.

And I love the characterization of hot temperature, hot job market, where we tended to see the growth was in the services sector over the goods sector, which I think is is pretty common, that you're seeing throughout the southeast as well.

And but where we saw the growth was on the private sector side.

So I think we're going to see kind of a diminishing number on the public sector jobs, the federal jobs with some of the federal employee cuts, but even some of the state local government jobs, as well as some of that down shifting of public funding, begins to happen from the downstream from from DC.

But, you know, construction is really big.

And so when you talk about recruiting companies like a Scout Motors, where you're going to see a lot of new housing permits, a lot of big thousands and a chunk of housing starts, you're going to see construction.

Those construction jobs kind of go up.

So I think you're going to kind of see this wave where it's going to vacillate maybe away from some of the goods dominant job to some of the services sector.

Jobs may leverage off something that Susie just said.

And that's just hot temperature and jobs hot temperature.

And, you know, in in temperature.

So I was here, it was snowing.

This is how long ago.

This a few months.

Ago.

Well, but so talk about hot.

North Carolina, third time in four years.

And I think that's the first time that's happened in is long.

As CNBC's been ranking the states for business, North Carolina has been number one again in the most recent, temperature ranking, if you will.

Yeah.

Is there a dark side of that, though, the kind of growth that that comes on the back.

Side of that?

There?

It definitely brings us challenges.

You know, you see that ranking and you're like, yes.

But yeah, we, you know, you still have to look at the housing costs.

With that ranking, the housing costs are continuing to grow, go up.

So those who are local, are seeing that challenge and are facing that challenge.

A lot of the jobs that we are seeing created are people who are moving there.

We still have thousands of people that move in, you know, into at least our particular area every day.

So it is bringing a lot of challenges, and it's also the challenge of trying to maintain that country, feel that maintaining the the green, the trees and, finding that balance of.

So a lot of people are concerned about you just, you know, they're, forests that are just wood there one day and they're gone the next.

And so it does bring a lot of challenges with that growth.

So that number is great to see.

And that ranking is great to see.

But yes, there's a lot in the background that people are having to deal with.

Yeah I wish we had more time to dive into that.

Please stay with us.

We're going to bring our guest on, before we do that, coming up on this program again, Tom Barkin is the president of the Richmond Federal Reserve.

Tom has been around the block now for a while and knows a little bit about how fiscal policy and monetary policy certainly works.

We will again unpack things with, President Park and also coming up on the program, College of Charleston president, Doctor Andrew Sue will also be, joining us once again, more and more, you hear the term banking when referring to credit unions.

However, while they both offer essentially financial services, there are fundamental differences between things like ownership, purpose, post rates, fees and community involvement between banks and credit unions.

We welcome now the state employee credit union.

Chief Executive Officer we welcome Leigh Bradley- Brady.

Sorry, Im sorry I'm thinking so much about the difference between banking and credit means you are.

You sit on top of the second largest credit union in this country.

I mean, that's a it is a massive credit union.

When you talk to your members, which are about 2.8 million, and coming off the dialog, we just had do hearings.

I do your concern.

Do you hear?

I'm not worried about it.

What are you hearing?

Well, of course we we hear concerns all the time, so.

But but really, from the economic side of things, I think that what we see and we look at factors like, our deposits still coming in are, are people still taking out loans?

And both of those things are still happening at our credit union.

So while our membership has also ticked up, we are this anomaly and not everybody can join our credit union.

So we just discussed the 2.9 million.

So we'll probably in about six months I think probably hit 3 million members.

But most of that is coming from family.

And I think that they are seeing the value.

So when you talk economy, you are are looking at where can I get the best value.

And I think that that's where credit unions are coming in, and specifically our credit union for sure.

With what's let's dive down just a little bit.

The difference between banks and credit unions can be seen, I think in a lot of communities, just being around them for, for as long as I have and everyone else as the difference between this community involvement, that seems like that's a pretty big lever that you have.

We absolutely have that and are thrilled to have community involvement.

We have branches in all 100 North Carolina counties have 275.

And then we have this unique member funded foundation.

And that is really our philanthropic arm for our members to give back to those communities.

So our foundation, they, our members pay a $1 a monthly maintenance fee on their checking that $1 for 99% of those is routed to the SCC Foundation.

Over $21 million a year, given that has been in existence since 2004, and we have just cussed probably about $320 million in giving to North Carolina communities.

And that's in addition to the supply drives.

But just finish that up for the governor's office as well.

And, and toy drives and, and any other walks that we're doing to raise funds.

Heavily involved in community efforts.

Vickie Lee?

It's good to meet you.

So good to me.

I've been following you for quite some time, so it's good to meet you in person.

What?

Our business members.

I've hear them talk a little bit more about credit unions and and, being able to go to credit unions with their businesses.

And so I know I'm not sure where you are with your plans, but can you talk a little bit about it?

I know there are some credit unions that are starting to broaden the services for businesses, because typically credit unions have been known for, for the for individuals and for families.

But what are plans to or if any, to help businesses and do more for small business owners?

That's a great question, Vickie, and one of the most requested services that our members have for us right now, they want small business services.

We are still a consumer only credit union, and small business services is not on the horizon right now because we're upgrading systems.

Once we do that in several years, we are going to take another look at that and plan to implement those small business services.

We have so many members specifically state employees who retire, and they start a second career, so to speak, with a small business in mind.

And they would love to have those services in state employees.

We just can't offer them yet.

It's on the horizon.

So.

Yeah.

Leigh, so you mentioned the robust, engagement, in their communities and it certainly sounds like, you've been blessed with assets, to support those, efforts.

Certainly the, the southeast region.

But North Carolina, South Carolina in particular, particularly hard hit with Hurricane Helen.

Just sort of curious about some of the involvement and support in those efforts.

Yeah, that's a, another wonderful question.

And our, our foundation donated close to $9 million towards Hurricane Helene relief.

But I'm so proud of our teams because we hit the ground running.

Really?

That Friday after the storm hit.

And we were we're doing everything from mobilizing cash because people cash was king during that time.

And, and figuring out how do we get supplies where they are needed the most.

So each of our branches served as collection sites.

We partnered with agencies like the Salvation Army to make sure that we got those in to the communities where they were needed, and then we we loaded up vans from our central locations and we took those, so our even though some of our branches had no electricity, certainly no network connections, they found a way to serve members.

We even had a credit union out of Tampa, Florida that lent us a mobile ATM unit, of all things.

And, it had Starlink on it.

And so their disaster recovery guy drove it up to us.

We drove it to the mountains.

And in the first weekend distributed 70,000 in cash.

So, so volunteering our our teams are still volunteering each and every day.

And, and our, our employees, they also collected funds for their peers who were hit because we did have employees affected as well.

But clearly.

Clearly your effectiveness in community is it's a it's a again, it's a big lever for CCU.

Community banks have said, that that's unfair and I'm greatly over overstating or understating it.

But community banks said it's not fair that you have a certain tax status and it makes it an unfair advantage for them.

Has that gotten has has that, argument gotten worse or gotten better under the current administration?

And in general, how do you how do you debate against that?

Well, and obviously, the big beautiful bill, they were looking for ways to pay for those continued tax cuts.

Right, right.

And ways and means that everything was on the table, including credit union taxation.

And so it was a pretty serious issue this year.

But I think that we were able to, and rightly so, demonstrate the difference of a credit union.

So in terms of it's not just giving back to the community, but those we don't have shareholders, we have members and those members own our cooperative.

But the dollars that we make go back to helping our members, for instance, low fees.

If you look at all of our fees across the board for State Employees Credit Union on an annual basis, it equates to about $20 a year.

And that, you know, that includes that dollar.

So I mean, it is incredibly low.

So credit unions are really about a different model about giving back.

I say we like to keep money in our members pockets where it belongs, and they pay taxes on those funds that they keep in their pockets.

I'm not saying you don't do this because I'm sure you do.

How do you, as a CEO of an organization, whether it's tax status, is the way it is or what it is, and how do you remain competitive in financial services?

Grow your enterprise, but still be fair to the letter of the law is the tax status of a credit union.

I think that's focused on our growth organically and focus on sustaining and developing new relationships.

So for us, I think that is what will sustain and grow our credit union.

So people are looking for that, that local individual who if you and look digital absolutely is increasing technology.

We are having to make enhancements in technology.

But the fact is, if you have an issue, you want someone to call to talk to you or you want to go inside somewhere and solve that problem, and we deliver that when others don't always deliver that.

Thank you.

Yeah.

I think similar to Chris question, because you mentioned you have these, branches in the rural areas in all 100 counties and it's sort of outside.

It's like, well, how are you able to do what the big banks are not able to do?

So what is kind of your special sauce?

What is it that makes you able to sustain these branches in these, these rural communities where other others are the, banks or pull it out?

Yeah, I think from from our standpoint, I always say our people are our secret sauce.

Those people live in those communities.

And it is commitment of our volunteer board of directors that we remain in those communities.

You're not always going to be profitable, but that is not our model.

So we are a not for profit cooperative.

So it may not be that you're profitable in this community, but someone else is sustaining that community for you.

So we plan to keep all of our branches open.

That is at least under my tenure.

So that is certainly the plan.

You know, in terms of long range, what's going to happen in the industry?

Who knows?

Because a lot has changed in the financial services industry even since Covid.

From the technology side of things, from financial services providers.

But in rural communities, I can tell you that those are some of the busiest branches that we have.

Not all of them have access to broadband in those rural areas.

So, that is where our focus is going to continue to be.

And I think relationships with the people will certainly sustain.

And family, family memberships have grown dramatic over the years.

Susie, question.

Certainly you mentioned technology.

You mentioned the rural areas and certainly broadband availability and, and the take rates, always an issue.

But as we see, you know, maybe satellite technologies, other technologies where you don't need plant in the ground, in those high kind of higher level dollar investments.

What do you see on the horizon when, maybe a member driving through their hometown doesn't see the marquee in the building?

Because everything is sort of been lifted up into into the cloud.

Yeah, they're it's a fabulous question, Susie.

So we have been really building kind of some of these, what I would call ancillary services for the volunteer of time.

And so things like our investment services or we have our own life insurance company, we have a property management company, we offer estate planning and trusts.

So all of those things are going to help sustain the typical transaction model.

May not be sustained, let's say 20 years from now.

But you also have to remember that as individuals age, sometimes they are not able to do certain things as well.

So you need to what we call meet them where they are.

And maybe that's in life and continue to offer that vast array of services.

So we have, what we call credit service organizations.

Our Cue service serve our members and they serve no members as well with those investment products and those financial advisors, they can come in.

And that's, I think, what it's going to help sustain us.

We have about a minute left.

How do you leverage a, and how early is it in the process?

Well, for us, it's it's fairly early, but, I will tell you, I think that a, has been around much, much longer time for people who claim, I mean, the macros of years ago.

That's what I might call I do, we have just started leveraging it in our organization pretty well.

But really started more from the member facing side with voice authentication in our contact center.

So you call in and you tell the system what you're calling for.

But if you agree to have your voice recorded, and then the next time you call in within seven seconds, we have identified that it is Chris and we already know you've told us what you want.

So that saves about, on average, 45 seconds in the member service time.

Has it has it resulted in literally is probably not a fair question.

10s.

Has it resulted in not hiring or layoffs at all?

Well, look, we have we've had a hiring freeze for quite a while.

I, actually put that back way in 20 to its critical positions only.

And if you look at our full time staff, we are running with about 30 more individuals.

Okay.

Fair enough.

We'll leave it at that.

Thanks for being so game.

Nice to see you.

Thanks for making the trip and always Lee and hope you come back.

Absolutely.

Okay.

Thank you Susie, thanks for driving in from Columbia.

Always a pleasure.

And did you drive in from Raleigh Wood or did you drive in from Greensboro?

Raleigh actually came in from Asheville this time I was in another event.

So thank you.

Good to see you.

My pleasure.

Until next week, I'm Chris Willi - [Announcer] Gratefully acknowledging support by, Martin Marietta, Truliant Federal Credit Union, Foundation for the Carolinas, Sonoco, Blue Cross Blue Shield of South Carolina, High Point University, and by viewers like you.

Thank you.

(upbeat rock music)