Knowing I am a passionate advocate of credit unions, my girlfriend called to ask for advice. It seems her son, Tom, went shopping for his first car, determined to buy it on his own merit. On graduating from university, he’d secured a guaranteed job with a highly regarded CPA firm and required a car. With his straight-A accounting degree in hand and bright-eyed optimism, he proudly went shopping to local banks for his first car loan. After being soundly deflated by several rejections, he woefully revealed to his parents: “no bank would touch him”.
Of course, I referred them to a local credit union. I explained with Tom’s limited credit experience, it was possible the credit union would require parents to co-sign. A few days later, she called to share the happy news that all went smoothly. What impressed them the most was how the Membership Facilitator explained the credit union values and principles and his responsibilities as a member. (yes, they call their MSRs “facilitators”!)
When the MSR announced Tom had been granted the car loan, the loan facilitator explained to their son, “Now Tom, the money we’re lending you doesn’t come from the credit union (… insert dramatic pause…) it comes from your neighbors. You see it’s their deposits that allow us to give you a loan. (…insert grin here…) So if you don’t pay it back, we’ll send your neighbors out to collect their money!”
The rest of the story: Fast forward 3 years when her son went through a difficult financial period, the one obligation he never missed was his credit union car payment.
If we take member development seriously, it requires educating members about their role as a credit union member. Doesn’t membership imply a two-way obligation? While I can’t imagine American consumers would accept it, wouldn’t it be interesting if credit unions adopted one Korean model in which potential members were required to take a one-day course in how to be an effective cooperative member before being allowed to join. Another model in Africa, required potential members to demonstrate their capacity to save a minimal amount over 3-weeks prior to being offered membership.
Educating consumers at the first point of contact builds strong member relationships. We know our consumer members don’t want a lengthy lecture about credit union philosophy. So how might we efficiently share credit union values while uncovering the broader picture of members’ life goals and financial habits? The challenge is recognizing the long-term cost/benefit compared with the time required to educate members effectively right from the start.
Have we lost member education opportunities in our urgency to achieve faster member service? How might employee incentive goals be inadvertently dismissing member financial education?
QUESTIONS TO CONSIDER
1. How does your new member information include a conversation about how credit unions are unique?
2. How might we use technology to include questions about member financial goals and spending habits in member on-line applications?
3. How might we use in-person waiting time to give members questionnaires to identify their spending habits and longer-term goals? (One credit union has members complete a simplified budget sheet and financial goals exercise while they wait in the lobby.)