The statistics on consumer financial well-being — or lack thereof — are troubling: Two-thirds of Americans — 187 million people — are “in poor financial health,” according to the Financial Health Network. They struggle with day-to-day finances, have little or no financial cushion for emergencies, and are unprepared to seize financial opportunities for safety and mobility.
Those who struggle are no strangers.
- Main mission of credit unions promotes the financial well-being of members.
- Financially Healthy Consumers benefit communities, employers and credit unions.
- Objective of the board:
Fostering the financial well-being of all requires an organization-wide commitment.
“These are our employees, our families and our neighbors,” says Gigi Hyland, executive director of the National Credit Union Foundation. “We, as not-for-profit financial cooperatives, need to focus on moving that needle. When we come together, we can and do have a positive impact nationwide.
Promoting the financial well-being of members is the primary purpose of credit unions. “The Federal Credit Union Act states that credit unions were created ‘to promote savings and credit for provident purposes’ as a condition of their cooperative structure and federal tax status,” says Mike Schenk , Chief Economist of CUNA and Deputy Director of Advocacy. “It’s just another way of saying we’re here to promote financial wellness. This is the main mission of every credit union.
Financial Wellness for All™ is also a core part of CUNA’s advocacy strategy (“The Advocacy Army Takes Charge,” p. 34). Credit union advocates share stories and data with lawmakers about how credit unions improve the financial lives of their members.
“Policymakers on both sides of the aisle care about this because they care about the health and well-being of their constituents,” Schenk said. “They are interested in improving the lives of their constituents, and credit unions work hard every day to improve the financial lives of American consumers.”
The CUNA Board of Directors adopted a statement of unity at the 2021 CUNA Government Affairs Conference that reads in part: “Improving the financial well-being of people is at the heart of the mission and structure of American credit unions”.
Credit unions have a long history of caring for the financial well-being of consumers with programs tailored to the needs of their communities and membership areas.
You can’t ask for anything better than community leaders who talk about what your credit union has to offer and share it with those in need.
A “triple victory”
BCUs in Vernon Hills, Illinois, relies on a corporate partnership strategy to grow its financial wellness initiatives, says Ken Dryfhout, vice president of strategy and growth for Credit Union Assets of $5 billion.
BCU “goes deep with a small number of large corporate partners for the benefit of their employees,” he says. “Workplace banking offers the best opportunity for a ‘triple win’. It’s a victory for the members, who are in better financial health and more confident. This is a victory for employers, who have a more engaged and less stressed employee. And it’s a win for the credit union because members are better positioned to engage with the full range of solutions we offer.
New members begin their financial wellness journey with BCU by taking an eight-question Financial Health Network survey.
“The assessment includes simple questions such as whether you pay your bills on time,” says Dryfhout. “A lot of ratings use the credit score as an approximation, but the financial health score is much more comprehensive.”
BCU provides sponsor company employees with multiple financial solutions so they can go “end-to-end in their financial lives,” he says. “We can help companies understand the financial needs of their employees by analyzing assessment data and providing guidance to identify the appropriate solution. We also take this to execution.
Raising members financially also benefits the credit union.
“If you improve the position of members, whether from a creditworthiness perspective or in terms of increased engagement and confidence, they will have higher savings balances and be able to participate in wealth management services and investment,” says Dryfhout. “They could refer friends and family and become credit union promoters.”
Workplace banking offers the best opportunity for a “triple win”.
Abondance savings fund in Radcliff, Ky., has built its reputation for financial wellness primarily around student financial literacy. This priority has shifted to making members’ financial well-being an overall part of its strategy.
This pivot became even more visible when Abound renamed its recovery area “member solutions,” says Jake Darabos, director of finance and administration for the $2 billion asset credit union.
“This name change was due to financial well-being,” he says. “It’s not just about collections anymore; it’s about finding solutions for members and helping them in the long term.
Every Member Solutions employee completes CUNA’s Financial Advisory Certification Program to become a Certified Financial Advisor. “We will eventually expand this certification to include some of our Member Service Representatives and Branch Managers because our members need people who can advise them and put them on the path to financial stability,” says Darabos.
Abound is also developing partnerships to extend its reach. “Our partners connect us with community resources beyond our members and challenge us to improve our content,” says Hollie Sexton, Public Relations/Financial Education Professional. “Our community partnerships connect us and spread the word for us. You can’t ask for anything better than community leaders who talk about what your credit union has to offer and share it with those in need.
Among those partnerships is an online webinar series that the credit union has developed with Baptist Health Hardin, a local healthcare provider. The groups developed the program at the start of the pandemic when social distancing restrictions were in effect.
The Virtually Well series shares advice on physical and financial health through live events and on-demand videos featuring doctors, dietitians and financial education professionals. Sessions are available through Abound’s YouTube channel.
“Baptist Health Hardin chooses topics based on investigations and patient care,” says Sexton. “We do the same based on trends and what we see with member services.”
Building a thriving YouTube channel remains a challenge, but Darabos likes to share how one view and member interaction can make all the difference.
“Hollie worked with a member who watched one of our YouTube videos and asked for help,” says Darabos. “This member was not well placed. She had a job she didn’t like and the stress was affecting her physical health. Hollie met with her once a week for eight weeks and put her on the right financial path where she could leave her job for another and be happier, healthier and more financially stable.
These relationships are immeasurable, he adds. “We assess success one member at a time. Seeing drastic improvements for individual members is all the validation we need to keep doing what we do.
FOLLOWING: Significant Moments