What the public gets wrong about credit unions matters

What you don’t know about how the public perceives credit unions may come back to bite you.

That’s because the public believes a lot of false facts about credit unions.

And that just may be costing you members.

Here’s the reality: just about every credit union leader believes he/she knows what people think about credit unions.

But check to see if you have this right.

We have the facts at hand. Big New Jersey credit union Affinity recently retained the respected Harris pollsters to survey public beliefs about credit unions, and it has shared the findings.

Affinity headlined its release on the poll results this way: “New Study Reveals: Misconceptions About Credit Union Membership.”

The takeaway: many Americans just don’t understand credit unions.

Harris found that only 16% of U.S. adults use a credit union as their primary financial institution. That means five in six do not.

Some 30% of us say credit unions are hard to join.

Nearly 50% of us think banks offer more products than credit unions.

55% believe credit unions don’t have mobile apps.

Nearly 60% think credit unions don’t offer mortgages.

Blunt question: whose fault is it that so many of us believe untruths about credit unions?

The truth is that many, many credit unions—particularly the bigger institutions—have backdoors into membership. Credit unions also have broadly defined fields of membership. Live anywhere in Arizona and be over 55, and you can join Arizona Central Credit Union, which this writer has, in fact, done. I also get in for belonging to a church (Catholics, Baptists, and LDS qualify). There are many more ways to get in and, nowadays, that’s become the norm. For what it’s worth, I’m also an Affinity member, a status I won by making a nominal contribution to a charity.

This false belief—that credit unions are tough to join—is probably the most harmful. But it’s just one of many misconceptions.

Often, credit unions—particularly larger ones—match banks product-for-product. Affinity, for instance, offers mortgages, car loans, mobile banking, and biometric log-ins—pretty much all the tools at banks.

That message just is not well understood.

That’s why Affinity shared this research:  “This research confirmed for us that the industry as a whole has more work to do in educating the consumers on the products and services uniquely offered by credit unions,” said Kevin Brauer, Affinity’s CFO.

Read that again: credit unions have a job to do in getting out their word.

As for what credit unions should do differently, Brauer said: “It’s not so much a matter of doing things differently, rather it’s more about educating the public to what we’re already doing. For example, according to our poll, nearly 50% of Americans believe banks offer more than credit unions, when in fact, we offer not only the same, and often times better, products and services. We need to help consumers understand those offerings and see them as viable options over the course of their personal finance journeys.”

Brauer added his take on what credit unions should do to better educate the public:  “This should truly begin at the local level, with individual credit unions educating their current members and those in their area on not only their services but what it means to be part of a cooperative structure.”

Another viewpoint came from Preston Packer, director of sales and marketing at FLEX, a core system developer. “I’m not surprised there are misconceptions. Somebody’s not doing their job.”

Packer added: “Marketing inside credit unions is almost nonexistent. Some do it very well.

Most struggle.”

As for who has the job of getting out the word about credit unions, Packer said: “Individual credit unions have the responsibility. They have to do a better job.”

Kirk Drake, the author of CU 2.0, pointed to a telling factoid that underlines how credit unions have stumbled in getting out the facts: “Despite better service, better rates, more convenience (i.e. atms/shared branching) and better trust – we have only gained marginal market share since 2008…which is terrible given we should be having a field day against the likes of BofA, Wells Fargo, etc.”

Drake, too, thinks that the job of communicating the facts of the credit union story come down to the individual credit union.

Ask yourself this: are you telling prospective members about your credit union difference?

The reality is you cannot rely on the trade associations, or on the leagues, to tell your story. They may help, and that’s appreciated. But what will change public perception of your credit union is telling your story.

Make that a top-priority job. And the next time there’s a poll, we just may see more encouraging—informed—public opinions about credit unions.