For many years financial literacy has been cited as an area that is much needed and yet we still seem to struggle with what to do maybe even where to start.
An obvious and very relevant place is to start on the subject of Housing Finance. I offer this not because of my position in the industry but based on of all things a dinner conversation I had during my visit to Washington DC and the CUNA Governmental Affairs conference
The conversation centered on younger people possessing exceptional education, integrity and passion for life but lacking the very fundamentals surrounding the growing complexity of purchasing a home and obtaining the appropriate financing.
Financial goals that were given, specifically the “American Dream” of home ownership cherished by the Baby Boomer generation may change as succeeding generations, coupled with demographic trends will make a significant impact on the housing industry.
This weekend I had a lengthy conversation with my own 36 year old daughter who is struggling with decisions about her financial future. In the course of the conversation I was reminded just how many consumers really don’t have answers to two fundamental questions: where to go or who to trust. These are two very important factors when making the most significant personal financial decision of a lifetime.
As a longtime credit union professional, I believe “credit unions” is the correct answer to both questions. Spring is an ideal time for credit unions to make themselves available in an educational context, when first-time and springtime homebuyers begin to stir the housing market pot.
Surveys have validated the use of online resources for locating and viewing properties and/or Realtors prior to getting in the car and looking at homes. We all now know it is going to take a lot more these days to educate literally everyone about how the changes we fret about day in and day out will impact the home buyers and also don’t forget the home sellers, who may turn around and be buyers once again.
I believe credit unions have the knowledge and the trust to balance this equation, so what’s missing? I wish I had the crystal ball for that answer but I can only offer my opinion. Many credit unions are passionate about assisting borrowers with home loans. We have lofty goals and dreams of helping our members be better consumers of financial products, but what they really need is reliable and trustworthy education,
making them better borrowers. Accomplishing this is good business for credit unions. While we may be a bit impetuous, all of this seems is much more difficult with more and more regulations and of course the “other” financial institutions with whom we compete.
Here is where I see the advantage for credit unions. As member-owned, not-for-profit financial cooperatives, credit unions can correctly assert that we are the only housing option that places consumer interests ahead of that of the institution.
The American Credit Union Mortgage Association has used that theme in a recent USA Today ad (amplified in a recent New York Times column that identified credit unions as an ideal, consumer-friendly option for financing a home purchase.) Thinking big, a further alternative would be for credit unions to pool our resources to create timely, real-life messages to consumers emphasizing our consumer-friendly, trust and service. Credit unions should stand ready to not only direct this message to our own members, but also to the wider marketplace through national and local media, as well as print and electronic. Leave no marketing stone unturned. (By the way, don’t forget to put this credit union message in the hands of your local Realtors. They’re a logical and important ally in our effort to reach potential homebuyers.)
Surely one of the many groups in our industry or a collaboration of them can craft the syllabus for Financial Literacy in Home Finance program. I worry if we leave the education to the folks who benefit the most in my mind it is akin to many of our Las Vegas casinos offerings lessons in Craps and Blackjack in the morning and then licking their proverbial chops every evening as the drop boxes fill with cash!
Let’s not wait for others to capitalize on what we live and breathe every day. I am still a little upset that American Express has used “Membership has its Privileges” a phrase that could have been taken from the Credit Union playbook, circa 1990.
I am ready to contribute this effort. Who’s with me?