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- The Long Hot Summer, not just a motion picture, an iconic motion picture from the 1950s but it is something we seem to be experiencing here in the Carolinas this summer season.

I'm Chris William and welcome again to the most widely watched and longest running program on Carolina business, policy and public affairs scene each week across North and South Carolina.

In a moment, we will start to unpack what the long hot summer looks like here with our panelists.

And later on, he is the CEO of Winston Salem based Truliant Credit Union Todd Hall joins us and we start right now.

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(energetic music) On this edition of Carolina Business Review, Anna Beavon Gravely of NCFree, Antjuan Seawright from Blueprint Strategy and special guest Todd Hall president and CEO of Truliant Federal Credit Union.

(energetic music continues) - Yeah, a movie from the 1950s called The Long Hot Summer.

It was iconic at the time and it does kind of tell the tale of what we're experiencing now.

Anna Beavon, Antjuan, it's a long, hot summer.

Heat, politics, anxiety around inflation, Roe V. Wade gun legislation, I mean, all of this stuff has kind of come together.

Anna Beavon, I wanna, I wanna start with you the idea that the Supreme court has now reversed longstanding Roe V. Wade and now seems to be pushing decisions to states.

North Carolina is different than South Carolina not, not surprising to either one of you.

North Carolina's governors, making accommodations for pro choice.

South Carolina seems to be drawing battle lines on being even more conservative.

Anna Beavon, how does this play out?

And do I have that right?

- Yeah, I think that you framed it up perfectly.

Everything that's happening right now in North Carolina is with November in mind, the governor come out, came out and made his statement, making these accommodations, doing what he can do as, as an executive.

The general assembly has said that they are not gonna talk about it or pick it up until next year so after the election, but really all of this is about trying to turn out people in, in November and try to attract more out of state money to really help and support those Democrats that are running to hopefully be able to gain a majority or at least keep the Republicans from getting a super majority.

- Antjuan is this, is the short answer that this is about politics, that the short game is going to be about politics around RV Wade?

- Before the Supreme Courts decision, it was about policy.

Now I think it's a combination of politics and policy.

Just let me give you some background slash framework table setting.

When I mentioned that the 2016 was the most consequential of my lifetime, it wasn't about Trump versus Clinton.

It was about the fact that whomever was the president was going to have the opportunity to nominate a person to the court that a person turned out to be three persons, three people to the court, to the nation's highest court for a lifetime appointment.

Now we see the results.

And as a result, you see the fabric of this country around issue that have been woven together, very tightly being pulled apart.

And as a result now states, mostly conservative, especially in the south, when you look at the general assembly makeup will make decisions about whether a woman makes a decision about what she chooses to do with her and her doctor, which has always been a privacy decision.

And in South Carolina, like most conservative states, there's always been three exemptions, rape, incest, life, and the mother.

Those three things have seemed to gone out of the conservative window with the posture and the politics that we, the environmental and we live in today.

- [Chris] AB.

- Yeah, I mean, I think you've, again, are doing a great job laying this, this, this table.

I wonder if we're having a great meal at this table, but I, I really do think right now it's largely about politics.

I think the policy piece will come later if it even comes at all.

But a lot of this is really just about trying to gain support, trying to raise money.

And I mean, not to say that there's not an issue behind it, that is critically important to so many people, but right now what's being louder and being pushed forward is the politics piece.

- But AB you know, AB here's one thought, here's where I think this could be a mistake for the conservatives who making this push.

I think voters tend to have muscle memory on steroids in a midterm election.

And the fact is you traditionally have more women, suburban women turn out an off your presidential elections, more so than on your presidential elections.

When I think about the makeup of the Carolinas and around the country, this could have, I think, bad muscle memory for conservatives who want to push this and make this a state issue in states where you have statewide races on the ballot.

It could be really detrimental long term, not just short term, for the conservative party who are making this political push.

- The big piece that I have in the is, is still a question mark in my mind is how will inflation as the topic of many households right now, where women have the predominant purchasing power, I think it's like 93% make 93% of financial decisions in a home.

How is that gonna compare to, to this, this conversation about abortion and abortion rights?

I think that's, what's left to be seen, honestly.

- Okay, let, let me, let me bring it to this and let me use a, another recent epic decision and that's gun legislation.

Do we, and not to be dismissive that RV Wade isn't, isn't a monumental battle or, or, or debate, but there seems to be some hope, some encouragement that if the country can start to come together as, as acute as it is around gun rights, but still start to come together around some controls around guns.

Can we translate that over?

Do you think it's encouraging that maybe the country can start to apply that same type of intel on a road pro-choice pro-life type of debate?

Either one of you.

- I, I, I don't and lemme tell you why while Roe versus Wade will be a factor for some it will not be the final factor or the, the majority of the factors of why people go to the votes to vote in whatever corner they decide, the left or the right corner.

I think this midterm election will include a buffet of items that will drive people for their reason to be being able to turn out in this election.

And AB while you mentioned inflation, while inflation may be an issue now who the heck knows what and how that will impact by the time we get to the fall of 2022, and inflation may not be an issue we see in the Carolinas gas prices are already starting to come down.

People are starting to make adjustments.

And so while there may be topic of conversation here in this long, hot summer that Chris mentioned in the intro, it could be a short fall, winter around conversation around inflation as we get closer to the election.

- I'm gonna have to go a little bit in an opposite direction for you on this.

I think that the conversation around being able to pay for gas, shopping in grocery stores, I know that of all of the topics that are the buffet of, of items that are there for us to talk about, that's what's dominating all of the conversations in my family, with my friends.

It's really about like apples to apple's comparison on gas, whether they're, we're seeing it come down, just a smidgen, not enough for people to go whew, geez, that's really, I'm glad that's over, but it's really gonna stay around a lot longer.

And I think that's what's gonna be really hard for candidates that are running issues like guns and abortion being able to get some breathing space in this.

At the end of the day, all of these topics are important, but I think what happens in your wallet to your bank account is what's gonna be a driving factor.

- Okay, well, let me ask you both this.

- AB can I shock you on this?

- Sure.

- You and I don't disagree on that part because we, we all, we all believe that kitchen table issues are run today, but here's what I would say to you in the form of a question, I know Chris wants us to move on, but here's what I say to you in the form of a question for those who may feel the way you feel, what if that is not an issue in the fall?

What if things start to normalize and level out, and the, the buffet table seems to be smooth and easy for everyone to end their left and right.

So what does that mean?

What's going to be the argument or what's gonna be the conversation they're driving for, for the opposition part to truth, the Democrats?

And I think that's going to be the question for Republicans in the fall.

- Are you, let me ask you this, Antjuan, are you hearing, are you sensing, do you feel that people are becoming more anxious about their current personal financial situation?

- I, I think there's so much noise in the environment people cannot necessarily hear the lyrics about the reality that we're not just, this is not just an American problem this is a global issue when we talk about inflation, when we talk about prices of gas, when we talk about prices of food, it's not just an isolated thing here in this country.

And I think when people drill down into details, and I know it's hard to do in an environment that's so noisy, you will learn that this is not just something that Joe Biden is dealing with.

World leaders are dealing with the same problems.

And that's why I think as Democrats, the important thing is going to be reminding people where we come from and where we are not to paint this picture everything's perfect, but we could be in a deeper hole, had some things not been in place and had some measures not been in place.

- Anna Beavon and about 30 seconds.

Go ahead.

Go ahead.

- Yeah.

I think that, that rational piece, when you're dealing with people who are seeing in a matter of two years, their life go from being, hey, we've got a rhythm, we've finally gotten our like family budget down to, I have no idea how much it's gonna cost for me to go to the grocery store.

I'm now gonna go to four different grocery stores to find the right thing.

When, when I don't know, eggs and milk are six and $8 like that, that's unreasonable for families.

And I think that is gonna stay in their minds over and over and over again, especially when they go to the voting booth.

- Our special guest was named CEO right at the very beginning of what this public health crisis we called COVID was.

So now it's fair to say two and a half or two, two plus years later, he is now broken into the clear and actually can be on, on the ground in front of team members and in front of their members, if you will.

We welcome to the program, the present chief executive officer of Truliant or Truliant Federal Credit Union, Todd Hall.

Todd, welcome to the program.

And, and let me ask you right from the top, I've heard it Truliant and Truliant, which one is it, which is correct?

- Well, so officially Truliant is the way we pronounce it.

But as long as you're saying good things about us you can pronounce it anyway you want to Chris.

(laughing) - You're a, I think it's fair to say you're a banker and I know some credit union execs may argue with that but you, you know, you've of course interest rates and lending and, and demand accounts are all important to credit unions.

So when you, as a banker or as a financial services executive, Todd, do you get the sense that we are experiencing and maybe in a recession now?

- I don't think we're quite in a recession yet.

There's a number of data points that kind of conflict that so recent job data and things of that nature would would say, we're not in a recession.

You look at the bond market and obviously we're, we're flirting with it being inverted and things of that nature, which would say we are.

So, we don't really believe that we're quite yet in a recession.

I think it's gonna be difficult to avoid as the FED tries to deal with inflation, inflation's the pain point for, you know, our members and our, and, and things that, that we're trying to help with.

So I, I think that it's probably unavoidable that we'll have some taste of recession in the, in the near term, but I don't think we're quite there yet.

- [Chris] Okay.

Anna Beavon.

- Yeah.

So coming in just before COVID and then coming out of, out of COVID question mark, I am wondering is there a chilling effect that you've seen with people preparing for what's coming in the future with the FED raising the rates?

How is that impacting your, your members, people coming to you for, for solutions?

- Yeah, they, I, I do think that there was a little bit of lulling through, you know, all the stimulus that was, was, was given out during, and, and I think stimulus was good and I think it helped a lot of people in, in difficult times, forbearance and things of that nature I think were, were necessary.

So, I do think that the, the, the rate of inflation rising so quickly, gas going to, you know, almost $5, things of that nature, squeezed people that we weren't, you know, some of our members and, and our communities weren't quite prepared for the challenges of food cost and, and gas cost and then other household expenses and things of that nature.

I do know that they're resilient, you know, it's not the first time we've been in challenging times.

And the, the beauty of being in the credit union space is that we're here for guidance, so, you know, our, our mission is to help improve financial lives.

And, and these are the times where people usually turn to us to say, hey, can you help me with cash flow?

Can you help me with this particular debt?

How do I manage to, you know, put food on the table to replace the air conditioned unit that just broke down?

Well, it said 95 outside all, all those different scenarios.

So, I do think that there's a little bit of a shock effect for some coming out of what we were experiencing for the past two years.

But, but I think that, you know, everybody, everybody would come outta that well, ultimately.

- [Chris] Antjuan.

- Todd, I have a three legged stool kind of question, first and foremost, what type of pain slash gain have you seen from the start of COVID and your tenure at the bank to now?

Because there's been some transitions or we say in yoga, there's been some obvious adjustments, both in the economy and with the clientele you serve.

My second thought process is as we ease out of this, because we know these things don't last forever, what does the cooling or the chilling effect look like, looks like post all this in particular for an institution like yours?

And then thirdly, what does the housing look market look like both now and what is it going to look like post all this?

Because while people made a lot of gains, all those gains, realistically from everything I read cannot necessarily be sustainable.

So that's my three-legged stool I want you to stand on.

- Okay.

Alright.

Lay it on me, man.

So first off I think that, you know, going through COVID and stimulus, we saw our members save more.

So it, they, they did have bigger balance sheets.

You know, there were forbearances like we mentioned earlier, so they didn't have rent payments or, or mortgage payments that particularly they had to make.

So they, they stockpiled some of that in, in, in savings and money markets and things of that nature, which helped them get through.

Now, we're starting to see that begin to diminish as they're, they're getting into a spending environment with inflation like we just, we just talked about, but I do think that they're in a little bit better shape going into a challenging economic environment that we're gonna have, that the question will be how long does it last, you know, does the FED get inflation, you know, under control reasonably quickly and not have to, to, you know, continue to be highly aggressive beyond the next few months on, on interest rates, things of that nature.

You know, the second part coming out of it, we are starting to see delinquencies, you know, the delinquencies were for lack of a better word, almost non-existent during stem, you know, the, the COVID timeframes, every, every banker, you know, would tell you that every credit unions would tell you that we're starting to see those rise, but not in, in, you know, scary trends, more returning, haven't gotten there, but starting to return back to what will pre-COVID delinquencies look like, which tell us that our members are beginning to, you know, be back in, in, in a kind of normal environment as it responds to their ability to, to cash flow and, and, and manage debt and, and live accordingly.

And then, you know, going forward for the institution, like many, we are benefiting from the increase in rates, in our net interest margin, so we, we make more money on all that liquidity that we've accumulated over the last few years now that the FED's paying more on that.

And so I think that for Truliant and other, other institutions that are out there on the consumer side of things, we're in a really good position because this is when people come to us.

You know, when things are really good, not so much when we need some help, when we have some advice, we need a way to figure out how we get through some difficult times, certainly turn to, to places like Truliant and, and we're well positioned for that, well known for it and, and I think that we, we have a really diverse organization.

So, you know, I've been here for 10 years.

We had a really nice transition plan with my predecessor, Mark Chafer.

And, and so responsibilities were well transitioned and it was very smooth for myself in the organization, but we diversified aggressively over the past five or six years, so, you know, the different revenue streams that come to Truliant in various scenarios are beneficial to us you know, we're not heavy on long term, low interest rate, fixed mortgages on our, our balance sheet, for example.

And we, we, we generate a good bit of in the small business administration arena, we generate a good bit of, of income through that piece.

So, I think that for us the next couple of years should bode well, the question being inflation and what might that and how that might impact members behaviors, you know, with regards to, to, to need.

- Thank you.

- Let me pick up on what the third thing Antjuan brought up about housing.

Do you get, you get the sense that we are, and I know everybody talks about in migration in the Carolinas, that's gonna do a lot to bail us out of issues that may or may not happen, but at some point trees don't grow to the sky, right Todd?

And you've got, you've got loans on homes, and I know those are thoughtful loans, but at what point do we flatten out on either housing sales or housing values and, and how do you, how do you figure that calculus into whatever Truliant is looking at down the road?

- Yeah, so obviously like everybody are the, the, you know, mortgages have the trend is, is downward and beginning to flatten, for us, it's, it's kind of flattened.

I think the bigger question for the housing piece is inventory.

You know, we're gonna certainly, you know, with all that we've got going on economic develop lines, both in, in North and South Carolina, you know, inventory is a challenge and, and, and for us, one of our, our aggravations in the, in the housing market is the number of homes that are bought by investors to be then rented out, you know, I think the numbers talk about 40 some percent of home purchases and, you know, the, the near term are investors, a lot of them corporate, you know, investors buying homes to then put in the rental market.

Well, how do, how do we overcome affordable housing in that environment?

So I think that's a bigger challenge and I know the only way to probably overcome it is congressionally and, and that, that could be a challenge, and, but I think it's more, you know, the inventory, availability for people to buy a home at, at a reasonable price.

We believe prices will, will begin to moderate, interest rates will have some impact on that.

You know, rates are in the low fives right now, given what's happened in the tenure lately.

So, but I, I do think that that inventory is a big crux.

- [Chris] Okay.

Anna Beavon.

- Yeah.

I, as you were talking, the first thing that came to my mind were young people.

So, Gen Z is getting older Millennial is Millennials.

(laughing) You love or hate 'em, there's no middle ground, but they, about 19% of them own homes.

And during the time of COVID, they spent a huge amount of their, of the stimulus money paying off debt to sort of catch up to previous generations who have done a better job, or haven't had as much debt.

And so are you, of your members and the people who come to you for, for solutions and help, are you seeing more or less young people who are like trying to, to do a little bit more, to be more than, more part of that 19% that owns homes, or does it perpetually rent?

- We do.

So, you know, most recently we, we, we are starting to trend younger.

So we are starting to engage with younger generations that are moving into home buying, you know, marriages, starting a family, all those points that have challenges to it, right?

That, that some guidance is, is valuable.

So we are seeing it.

I think that a lot of them are still burdened with what you just described, you know, a significant debt from a number of different areas and then the cost of housing as it is now.

And so, we, we have affordable housing programs, the first time home buyers that really is around have you had, you know, owned a home previously in the past three years, things of that nature to help folks with that, that significantly lessen or do away with down payments and mortgage insurance premiums and things of that nature.

But that, those generations at the moment, I think are a little bit shocked.

You know, I think it's, there's not a lot of inventory.

You wanna get a starter home in, in the Carolinas, you know, it's not, it's not a buck 75 anymore, you know, it's like three 50 or four.

Right?

And so, you know, I do think that they, they are struggling a bit to, to find an avenue for that.

- Okay.

Antjuan.

- Todd, Todd, Todd, as the tectonic plates continue to shift both politically and economically, not just in the south, but across the country.

How do, what, what advice would you have to lawmakers and leaders about the wealth gap that continues to widen?

You see the haves go up and the have nots continue to go down and that there's no, there's no such thing as a real middle anymore.

So what, what would you say to this idea or conversation around the wealth gap?

Because that's a reality that talk about young folks that we are gonna face when you add student loans to the conversation, when you add the rising cost of goods and services, et cetera.

- Oh, for sure.

You know, we believe the solution, one of the, one of the solutions to that is quality in employment for folks so they can make a, you know, quality wage and begin to, to, you know, save, invest, buy homes, things of that nature.

And so, I think there needs to be an effort to take jobs where those people are versus, versus saying, hey, we we'll make jobs available to, to those folks.

And, you know, for Truliant right now, we, 51% of our employees live in low to mod census tracks.

So, you know, we hire within the communities that we are here to serve, but we need to do more than that.

So we, we are investigating things like taking jobs to, to low mod communities, opening space there, creating training labs and creating jobs that they, you know, that are on bus lines that are within walking distance or biking distance, things of that nature versus saying, well, we've got jobs for you, but we're uptown, so if you can get to us, you know, we're, we're glad to, to have you, but congressionally, I, I think that there has to be more effort to it.

I think that there's a great deal of money being put into the system, you know, from, from corporations around affordable housing, you know what we're talking about, you know, raising people out of poverty, you know, education's a key early education, certainly a key to that, or, you know, quality jobs is certainly a key to that.

- Okay.

Todd, I wish we had more time because you get a, you get a pass on other easy questions like Roe V. Wade with loan forgiveness.

- [Todd] Thanks, I guess.

- Please come back so we can pepper those at you too.

But Todd, thank you and best of luck going forward.

Nice to see you.

- Absolutely.

Thanks so much for having me.

- Anna Beavon, good to see you.

Antjuan, be careful.

Have a good summer until next week.

I'm Chris William here.

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