Building a bridge to relevance

It’s been said that building a bridge is one of life’s great gestures of optimism. Bridges represent connection, stability and progress; they symbolize the joining of worlds. It’s no wonder the bridge is such a powerful symbol, both within the credit union movement and to me, personally.

Bergengren’s bridge to affordable credit

In 1924, the Extension Bureau began publishing The Bridge, a precursor to Credit Union Magazine, under the direction of editor Roy Bergengren. Bergengren was a credit union evangelist who traversed the country to organize, lobby and recruit volunteers. His rally cry included the need for affordable access to credit. Throughout the Bergengren era, credit unions acted as a bridge, connecting millions of middle-class workers to affordable loans. The concept of credit unions “bridging the gap” is depicted on the old Extension Bureau newsletter. While decades have passed since The Bridge’s heyday, credit unions can once again prove their relevance by helping everyday Americans access the land of opportunity.

Bridges are needed now more than ever

Today, tens of millions of consumers need a financial bridge that connects to affordable access to credit and the path to a better quality of life. Each plank on the bridge represents a single step: financial education, skill development, credit repair, regular savings, and better financial management.

History demonstrates that the bridges we previously built to the underserved market worked. Millions of consumers crossed our bridges to financial security and, with that, their credit union became a relevant part of their lives. This relevance was earned through the building of bridges for groups that lacked access to non-predatory financial services. We know this, and we share it all the time: credit unions saved consumers who were left to the loan sharks.

Considering that nearly half of us are not growing our members or loans, I think it’s time we honestly ask ourselves just how relevant we are to the communities we serve. No one will argue that we have among the most competitive rates around, and national survey results continue to show that credit unions are leading the way in satisfaction. If this is all true, why aren’t more of us growing? I’m sorry to say it’s because many of us have become irrelevant.

The road to relevance includes a few bridges

I just spent a couple of days in Detroit visiting my friends at Communicating Arts Credit Union. CACU is a $35 million powerhouse serving low-income consumers living in the city’s poorest communities. The credit union has built strong bridges designed to lead these communities forward. Steps on CACU’s pathway include personal financial counseling, save-to-win programs to encourage saving, help with budgeting, credit repair tools, and a payday alternative that helps improve credit and breaks the devastating payday loan cycle. CACU provides affordable access to credit that results in improved credit, increased savings, and a better quality of life. Here are a couple of examples that demonstrate the credit union’s relevance in the lives of its members:

• CACU offers the “bail out” loan to members who have loans with other lenders, cutting the rate in half. This is important because many of the loans they refinance are auto loans that have high, double-digit rates. Members who have a 25-percent auto loan walk away with a 12.5-percent rate and a monthly payment that is $125 lower. Frequently, this savings is the monthly deficit the members have in just meeting their monthly obligations.
• For the past three years, the credit union has lead a group of community partnerships with the Hood Camp project. Hood Camp brings inner-city youth together for an overnight camping experience that aims to equip them with the tools for “urban” survival, as well as creating a more positive and productive living experience within their communities (their ‘hoods). So what’s the impact on these rough urban neighborhoods? Interviews with branch staff revealed that one of the young men who participated in last month’s camp-out brought his grandmother to the credit union to open an account. The grandmother has never in her life had a “banking account.”
  

Credit unions need bridges too

The National Federation of Community Development Credit Unions (the Federation) is appropriately symbolized by a bridge. The Federation is a very unique association of credit unions that provides safe and responsible financial services to underserved communities. The Federation plays a key leadership role in the development of appropriate products, services and resources that are relevant in these communities. In essence, the Federation acts as a bridge, connecting mainstream credit unions to local underserved communities. With its help, the NCUA has reported that credit unions serving underserved communities are growing loans, members and profitability at a faster pace than Federal credit unions as a whole.

Finding your bridge to relevance

If you haven’t for a while, take an honest assessment: how would closing your doors today impact your membership? I suggest caution when hanging your hat on great rates, lower fees, convenience, and friendly service – especially if you serve a community with scores of financial options. If you’re looking to grow and increase the relevance of your brand, I recommend that you consider reaching out to your local underserved community. Build a bridge to the people upon whom you can make the greatest financial impact and they’ll use it to come back to you again!