Plain Blaine: State Employees' Credit Union has soared to $30 billion in assets by keeping it simple and bucking conventional financial wisdom.

• Author: Mildenberg, David
• Position: N.C. Banking

Not every bank CEO writes a blog that criticizes his main regulator as either "irrationally risky" or "simply irresponsible." Not every banker thinks that everyone --Warren Buffett or the average Joe down the street--should get the same loan rate. Jim Blaine is a maverick who relishes picking fights. He's also among North Carolina's most successful bankers over the last 40 years, heading an institution that has grown faster than peers while taking less risk. He doesn't have the brand name of McColl, Crutchfield or other North Carolina banking-industry legends. But none of them expanded his business 80-fold without making a single acquisition or leaving the state borders. None led an institution that wrote off less than one-third of 1% of its loans during the most severe economic downturns. None has offices in each of North Carolina's 100 counties. Blaine, 65, the CEO of the State Employees' Credit Union since 1979, hates being called a banker, and under its cooperative ownership structure, he isn't paid like a bank CEO; he received about $850,000 last year. But collecting consumers' money and lending it for cars and houses sure sounds like banking, especially to competitors, and particularly when almost $30 billion is involved.

SECU has soared while bucking many of the most basic assumptions underlying finance in 2015. It's become gospel that people with poor credit should pay higher loan rates than the well-heeled; that someone investing $5,000 should get a higher interest rate than someone putting aside $500; that banks should collect $3 every time a customer from another bank uses their ATMs; that the extra yield of quasi-government agent securities such as Fannie Mae are worth the risk versus sticking to U.S. Treasury securities. Blaine has spent his career debunking those ideas and others, putting him outside the mainstream of the credit-union industry, and farther still from commercial banking. He'll be the first to tell you: "It's working. We've got loyal members, low costs and universally available service."

The credit union had 25 offices and $335 million in assets when Blaine took over. It had 254 offices and $29.5 billion in assets as of Dec. 31, second largest nationally among credit unions and bigger than all but three North Carolina-based financial institutions. Virtually every North Carolinian lives within 20 miles of one of SECU's 1,100 ATMs, which nonmembers may use without a charge from the credit union. (Their own bank usually collects a fee.) It is owned by its 1.9 million members, including more than 500,000 who never worked for the government. It's roughly the same size as the No. 3 bank, Raleigh-based First Citizens Bancshares Inc., and it is at least five times larger than each of the state's eight regional banks with assets topping $2 billion, including Raleigh-based Yadkin Financial Corp. and Greensboro-based NewBridge Bancorp. Unlike those companies and many other credit unions, SECU doesn't make business loans, other than for some duplexes and small real-estate ventures that regulators classify as commercial. That's why Blaine doesn't consider his credit union to be a threat to the state's banks. With their eye on SECU's $27 billion in deposits, North Carolina bankers vehemently disagree and have fought for decades to limit its membership scope and force it to pay corporate income tax. The bankers have consistently lost, though politicians could change their minds, N.C. Commissioner of Banks Ray Grace says. "Jim has won so far, but it's like a terrorist who you repeatedly repel. He only has...