You’re not cool unless you’re fiscally responsible

With millions of impressionable young consumers watching on, Google boldly turned its back on the payday lending industry, banning the most aggressive providers from advertising on its website.

While it’s clear Google believes payday lending can be deceptive or harmful, one also wonders if the tech giant’s move is tapping into an emerging Millennial belief – that fiscal responsibility is cool.

We see this notion manifest in multiple ways. Millennials rent purses rather than shell out the cash to own them; we stream videos rather than buy DVDs; we catch rides with Uber drivers rather than finance a used car. Sixty-three percent of Millennials don’t have a credit card. Forty million of us live at home with our parents.

There is, however, expected to be some unfortunate side effects of these trends. In turning away from traditional products and important milestones – like making a rent payment on time every month – Millennials may be delaying the development of healthy credit.

For a generation with big financial aspirations, this could cause problems in the long run. Nearly half of parents in their early thirties plan to pay for their children’s entire college education. Just 16 percent said the same 10 years ago. What’s more, Millennials place a lot of importance on luxury items, with nearly a third (more than any other age group surveyed) saying that having luxury items is crucial to attainment of the American Dream.

Savvy underwriters, fintech lenders and others who see the writing on the wall are looking for ways to help Millennials achieve their dreams even with delayed credit establishment. They are innovating the decision-making process to accommodate for the choices, behaviors and lifestyles of Millennials. Of course, new credit scoring models that are both ubiquitous and compliant are not something likely to happen overnight.

In the meantime, credit unions are in a unique position to influence Millennial thinking. In fact, one could argue that with their consumer-centric philosophies, they are compelled to do so. Challenge your teams to find ways to adapt your products and services to the frugal aspirations of what is one of your most important consumer segments. Help them see how growing into a credit card responsibly or saving for a mortgage down payment isn’t giving up on their Millennial ideals; rather, it’s pushing them closer to the achievement of their goals.

At the same time Google – a brand trusted and admired by Millennials – banned payday lenders, it also called financial services core to people’s livelihood and well-being. Your credit union can play a huge role in the attainment of that well-being given the right set of Millennial marketing and growth strategies. Just remember to stay true to your core mission and values as you develop those strategies. After all, many credit unions were frugal before frugal was cool.