How credit unions are teaching financial literacy and growing future members
By Carolyn Kimmel
Financial literacy efforts offer several benefits to all credit unions. They cement ties with business partners; they strengthen a brand image of the credit union as a caring member of the community and a financial literacy backer; and they establish a familiarity among residents and business owners.
In other words, these educational initiatives translate to membership growth for credit unions.
“Credit unions thrive on building relationships,” says Margaret Hersh, director of community and business development at DuPont Community Credit Union in Waynesboro, Va., which focuses on financial education for community groups and employer groups. “Everybody is in a credit situation in their lives — either learning about, establishing, building, improving or maintaining credit — and we hope to be the one educating, training and providing the information they need to improve their financial health. That’s how we care for our community."
Tools of Engagement
One way DCCU engages in financial literacy is by conducting a free work-place financial wellness program called “DCCU at Work,” which Hersh says serves as a good recruitment and retention tool for employers. “A financially fit workforce is crucial to a business’s success,” she says. “When there is less financial stress in the workplace, retention is better. Employees are looking to employers for that kind of support.” Such efforts provide an opportunity for credit unions to build trust and visibility in the community. Golden 1 Credit Union in Sacramento, Calif., has intentionally moved away from referencing financial literacy as “member information,” framing it instead as “financial education” that’s available to anyone.
“It’s proven that consumers trust credit unions more than banks, especially since the Great Recession. … People are more likely to take advantage of what credit unions offer,” says Doug Aguiar, chief marketing officer for Golden 1. “Education in an unbiased, multimedia way is part of our DNA.”
When Laura Edick signed up to work with her school’s student-run branch of CORE Federal Credit Union in Syracuse, N.Y., she had no idea it would be a life-changing opportunity.
“Not only did it teach me critical skills on budgeting my money and under-standing finance and customer service, but it also helped me open up more in public speaking and communicating with my peers,” says Edick, one of the first student supervisors of East Syracuse Minoa High School’s Spartan branch.
“These are skills that I continue to use in my career with the credit union and in everyday life.” Today, Edick is a marketing and member development specialist at CORE in East Syracuse.
It’s fitting that CORE makes the education of the next generation such a central part of its mission — it was, after all, founded in 1959 as a credit union for teachers. Th e credit union’s CEO, Bill Sweeney, smiles broadly when he hears testimonials like Edick’s — former (and current) students whose financial wellness and personal lives have been enhanced by his credit union’s educational efforts.
“We’re financial literacy on steroids,” Sweeney says. “It’s not just a day a year that we focus on it. It’s our way of life here.”
Tactics That Work
In order to teach teens and young adults critical financial skills, credit unions find creative ways to engage them, whether through appealing to the technological minds of these digital natives or offering plain old fun and games.
One of CORE’s most successful connections with students was its “For Real or No Deal” game show, a takeoff of the TV show “Deal or No Deal,” Sweeney says. The high school credit union branch offered game show entry chances to students who made a deposit into their savings account, took an online financial quiz or attended an after-school peer education session on money management.
“We had a phenomenal response — over 300 students attended after- school sessions, and we got coverage from our local NBC affiliate, who got Howie Mandel to give us footage advertising the show that we could run in school,” Sweeney says. “Not only was it seen as cutting-edge, it earned us a valuable and accurate perception in the community as being committed to financial education.”
Also in the spirit of pairing fun with finances, South Metro Federal Credit Union in Minnesota brings in Santa and Mrs. Claus, complete with their reindeer, at Christmastime. “If you’re coming to the credit union for fun stuff, then you’ll be comfortable coming here to talk about some of the tough stuff — which is temporary if you have the willingness to build your skills and the guidance we provide to do it,” says South Metro President Don Crofut.
Golden 1 is expanding its virtual presence as it attempts to further its reach and engage the younger population, which favors remote transactions.
“We have podcasts, videos, webinars and learning labs based on question-and-answer modules that are accessible any time of day to anyone,” says Rebecca Delmundo, financial education manager for Golden 1.
A recently launched series of podcasts covers everything from student loans to home equity to retirement planning. A podcast aimed at teens focuses on topics such as money management, buying a car and credit cards. During Financial Literacy Month in April, Golden 1 rewarded online users who completed financial wellness modules with the chance to win a finance-themed gift basket filled with a piggy bank, the game of Life and budgeting books.
Members stopping in at South Metro during Financial Literacy Month left with a pot of seeds and the encouragement to make not only a plant grow, but also their money.
“Financial education is one of our pillars in our mission statement,” Crofut says. It has always been an important component of the credit union way of life, he says, but “we have gotten better at articulating it and providing better tools.”
Providing Member Value
One of the most valuable financial literacy resources to members of South Metro is the availability of a certified financial counselor, who helps both those with transitory financial difficulties and those who never had the building blocks necessary for financial health, Crofut says. The counselor provides honest, proactive solutions and education — all confidential.
“Credit unions are about helping people,” he says. “People appreciate that they’re not a number or the sum total of one bad situation they got into. We are empowering our members to take action and making sure they have the ability to plan their success, review it and move forward.”
South Metro recently launched a self-directed, interactive program called MoneyEdu, which helps members set goals and track financial health over time. They can share results with the certified financial counselor for further personalized coaching.
Empowerment through education is perhaps most powerful when credit unions are advocating for at-risk groups such as disadvantaged families and senior citizens. For example, DCCU offers financial education to people staying at community homeless shelters.
“Something has happened, and they want to improve their situation with meaningful employment and better financial skills,” Hersh says. “We help them down the path of understanding what may have gone wrong and how to arrive at a more stable path of financial fitness.”
DCCU shines a light on elder financial abuse by sponsoring an annual symposium for law enforcement, local financial institutions and social workers. Topics covered include local elder statistics, red flags regarding financial abuse, how to report suspected abuse, how to deliver documentation and how investigations are handled.
“This has helped us forge contacts within our community so that when we locate local elder abuse, we can deal with it more effectively through law enforcement and adult protective services,” says Hersh, who noted that credit union employees go through enhanced training to spot red flags. “Those red flags apply to many vulnerable populations. It may not be the credit union’s role to pursue it, but we may be the first to identify it.”
Supporting minorities is in South Metro’s DNA. Its charter sponsor was a Native American tribe, the Shakopee Mdewakanton Sioux Community, and the credit union continues to serve Minnesota’s large Native American population, Crofut says.
Reaching the Next Generation
When it comes to engaging with young people — many of whom make deposits and pay bills remotely — it’s important to look for a good connection point, leaders say.
CORE opened central New York’s first student-run credit union in 2005, and it has helped dozens of other credit unions branch out to schools since then. “We turn our students into educators who can teach their peers about good money management,” Sweeney says.
In addition to operating its school branch offices, CORE reaches youth in several ways:
- Through its Financial Literacy Book Mentoring Program, high school students collaborate with elementary school teachers to teach financial lessons using financial literacy-focused books such as The Berenstain Bears’ Trouble With Money.
- With a CORE representative on hand, high school students teach community adult seminars on topics such as finance, budgeting, ID theft and responsible use of credit.
- High schoolers become IRS-certified to offer volunteer tax return preparation to low- and moderate-income people, again with support from a CORE representative.
- CORE dispatches its high school branch staff to 10 area elementary schools to talk about spending, sharing and saving.
Virginia requires a personal finance class for high school graduation, which affords DCCU the opportunity to send in guest speakers. Guest executives also speak about money management in college business classes, Hersh says.
One of the ways Golden 1 Credit Union educates students is through a unique hands-on “Financial Wellness Challenge,” an interactive simulation of life situations that takes place at school.
“We give each student a spouse, salaries, etc., and they have to budget for everything they need — a car, a home, food — and come out with at least $1 in their checking account at the end of the day,” Delmundo says. “It’s our way of bringing financial education to them.”
Golden 1’s branch at Fresno State University gives students hands-on work experience that can translate into a job. “I learned high-level organizational, time management and communication skills, and I had the chance to apply my marketing course work to Golden 1 events promoting financial literacy and our products and services,” says Gene Pisano, now Golden 1’s social media administrator.
Credit union executives say it’s important to not only offer education, but also products and services to help young people learn firsthand how to manage their money. Golden 1 engages youths as young as 13 with products that contain built-in safeguards, such as a debit card with daily limits on withdrawals according to age and a checking account with no minimum deposit or monthly fees.
Above all, financial literacy efforts give credit unions the privilege of guiding subsequent generations, and potential new members, to be financially savvy citizens — like Sydney Franco, a college junior headed into the medical field.
“Personal financial literacy skills are not usually taught in school, yet they are the one thing that would be universally helpful for all students,” says Franco, who helped establish the CORE branch at Cicero-North Syracuse High School. “[Th e school branch] gives students a unique experience to learn these skills early on, which will allow them to be successful later on, no matter where life takes them.”
And investing in Franco’s generation symbiotically cultivates a healthy future membership for credit unions.
“We don’t use our student branches to send home equity loan brochures with each student for their parents,” Sweeney says. “This isn’t a direct business development tool. But if you do it correctly, it can be a good indirect business development tool. It creates a persona, an image of the credit union as a trusted financial adviser that is genuinely concerned about educating kids.”
Carolyn Kimmel is a freelance writer and editor based in Pennsylvania.
This article was published in the September-October 2019 edition of The NAFCU Journal magazine.
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