How to minimize delinquencies while increasing member engagement

Credit unions should embrace financial wellness platforms that automate debt management and payments.

Financial wellness tools, member engagement and deposit growth strategies in a microeconomic environment are dominating discussions for financial institutions, especially credit unions.

Loan demand is slowing as interest rates rise. Delinquency rates are also ticking upwards amid inflation, according to the National Credit Union Administration. Many consumers are wiping out their savings to pay for bills. For those that lack or have exhausted their savings, credit card debt has seen the sharpest rise in decades. Consequently, consumer debt has now surpassed $17 trillion, up nearly $3 trillion from 2019.

Adding to this tsunami, 43 million Americans have had to start repaying their student loans again, and many of them say they can’t afford it. In fact, 40% of those who had payments due in October missed their first payment, according to the Department of Education. This isn’t just a problem for recent graduates who may have the option to live with family to cut down on expenses like housing. Nearly 70% of all student loan debt is held by Gen X (age 41-56) and millennials (age 25-49).


continue reading »