The President's Perspective

​As inflation soars, credit unions stand ready to help struggling members. There is no better time to get involved with “Financial Well-Being for All!”
 

Greetings and Happy Monday!
 
It’s primary day tomorrow in North Dakota as polls welcome voters across the state. There are a number of key district level legislative races that will determine who moves on to the general election in November. North Dakota is an open ballot state, meaning voters may vote in a party's primary regardless of their political affiliation. However, since this is a Political Party Primary Election, you can only vote for the candidates in one political party. Please check with your local county auditor or visit your county election website for specific voting guidance and sample ballots. You can start here to learn more about your local district primary elections.
 
As inflation soars, credit unions stand ready to help struggling members.
New economic news has Americans getting poorer. In fact, many reports today indicate that two-thirds of Americans are living paycheck to paycheck. The May inflation report showed consumer prices up an average of 8.6 percent. That is a 40-year high, and those paychecks are not going as far they did just a few short months ago. The reality is many of our credit union members are struggling today. Is it time (again) for the “financial first responders” to take action to help ease some of the suffering?

Credit unions here in the Dakotas, and across the country, did so much to pitch in and help members navigate through a lot of uncertainty these past two years. When our members are hurting or in a crisis, many times, the credit union is the first they turn to. Being there for your members is really what you do; It’s how credit unions built their reputation and enhanced the “credit union difference” story.

Today, our members are worried about the economy as inflation continues to skyrocket, and folks are just getting by and increasingly struggling to care for their families and loved ones. That’s where credit unions can come in. You are who they run to when they have hardship and need help. Whether it’s a fee waiver, a loan remodification, or even a payment skip, credit unions can and do run towards the crisis to help.  

Many of you have heard the financial tracking term, ALICE (Asset Limited, Income Constrained, & Employed). This is a tool used by groups such as the United Way to collect, analyze, and report meaningful and critical data that can be used to help get folks back on a path to financial stability. So, who are these people? They are today’s middle class, and they are barely making ends meet. You know these people; they are your members. Some of them are even your employees.

As financial service leaders, we need to pay attention to these folks – it’s why credit unions were created in the first place. It’s why we have a special charter. It’s the reason why we are treated differently – because we are different! But mission complacency is our enemy. If we expect credit unions to be treated as “special” in the eyes of policy makers, we need to act special. To be special in the eyes of our members and policy makers, we need to deliver on the “people helping people mission” and the power of “Financial Well-Being for All,” and we need to back that up with evidence and real data.

One of our first steps towards “Financial Well-Being for All” at the association was to learn what credit unions are doing right here in the Dakotas. Early this spring, we surveyed our credit unions to find out specifically what they are doing to help their members who are struggling financially. We heard back from just over 37 percent of our members, and here is what we learned, where are today, and where we need to be in the extremely near future:

• 59 percent said they reach out to members who they know are struggling. 36 percent said no. 
• 68 percent of survey respondents said they send out financial education communication and tips to members. 31 percent said they do not. 
• 63 percent offer financial planning and education workshops. 45 percent are providing classroom financial education either at schools or in the community. 
• Most credit unions that responded are not tracking their financial education and well-being efforts. 27 percent are tracking that information. 
• 81 percent indicated that they do not have Certified Financial Planners on staff. Only 9 percent said that they do have CFP on staff available to help members. Further, only 22 percent of Dakota credit unions have dedicated staff to promoting financial health and well-being. 68 percent indicated they do not have any dedicated staff to promoting financial education. 
• A large majority, 72 percent of respondents offer overdraft protection and a larger number, 78 percent indicate that this is a valuable and necessary resource that members want. 58 percent shared that their overdraft programs are an income generator for their credit union. 
• Only 18 percent are offering payday loan alternative products such a PAL or bridge loans.

While many Dakota credit unions are doing extraordinary things every day to help their members succeed financially, it’s clear that we could do more and achieve even better ROI in our “Financial Well-Being for All” efforts – we should all see the urgent need to pay attention to individual members and find ways to reach out to them and offer help.

Primarily, it really is the right thing to do. There is no question that there is a significant and growing need as inflation and rising costs continue to skyrocket and impact members.

It aligns with the credit union core mission and is fundamental in addressing a basic human need for safety and security. It stimulates credit union relevance in the marketplace.

More importantly, policy makers are increasingly demanding quantitative proof of our credit union mission fulfillment, making it key to credit union survival. The continued threat of our special tax status going away, along with our independence with our own regulator, are very real and possible. Truly, these are some compelling reasons why Dakota’s credit unions need to engage in Financial Well-Being for All – and to track and measure their programs.

Reminder: Dakota Credit Union Foundation financial education grants available.
Speaking of “Financial Well-Being for All,” the Dakota Credit Union Foundation is awarding five $1,000 grants to support financial wellness and education. These grants can be used for either the Zogo financial education app or towards the CUNA Financial Counseling Certification Program (FiCEP). If you are interested in applying for one of the foundation’s grants, be sure to start here by submitting an application by June 30, 2022, and feel free to contact me with any questions.

Those who wish to learn more about the Zogo app can join our free webinar tomorrow, Tuesday, June 14th at 2:00 p.m. (CT). During this one-hour session: Zogo – on a mission to promote financial well-being for all, we will show you how the app works and why it is becoming such a popular educational tool.

Also, as we learned in our member survey on Financial Well-Being, cost was a concern for members in having Certified Financial Planners on staff for members. So, these grants can help cover that cost. Completing the CUNA Financial Counseling Certification Program (FiCEP) earns you the Certified Credit Union Financial Counselor (CCUFC) designation which allows you to counsel members while improving financial results. FiCEP provides credit union employees with the skills and knowledge required to guide members to sound financial decisions.

CUNA National Awards deadline approaching.
There are only 11 days remaining until the June 24 deadline for the CUNA National Awards. As you know, these awards recognize distinguished credit unions that demonstrate social responsibility (the Dora Maxwell Award), the credit union philosophy (the Louise Herring Award), and financial education (the Desjardins Awards). In addition, all our state-level winners are formally recognized during the Summit Awards Banquet each year. Everything you need to apply can be found on our website here, and feel free to contact Deb Kruckenberg with any questions.

Save these dates!
Finally, I am looking forward to connecting with many of you at our late summer events in Fargo, as we’re hosting the DakCU Professionals Forum on Tuesday, August 16, and our 6th Annual Foundation Golf Scramble on Wednesday, August 17th at the Rose Creek Golf Course. More details to come and registration will be open soon, so be sure to watch the Memo for additional information. Meanwhile, mark those calendars!

Have a great week,

DakCU President/CEO