CUNA’s January 2022 National Voter Poll shows credit unions’ unique makeup and characteristics offer greater financial resilience and higher levels of financial well-being for members and consumers, overall.
According to the Consumer Financial Protection Bureau (CFPB), financial well-being includes both what people do with their money and how they feel about their money. The CFPB’s official definition of financial well-being is “a state of being wherein a person can fully meet current and ongoing financial obligations, can feel secure in their financial future, and is able to make choices that allow them to enjoy life.”
Now within the parameters of that definition, let’s look at the resulting findings from the survey. Of those members surveyed, 88 percent said they believe their credit union has improved their financial well-being. In fact, credit union members are 1.5 times more likely than non-members (by a 44 percent to 29 percent margin) to be passionate about that response, saying they are “very positive” about the ways their cooperative has improved their financial well-being.
Financial well-being: Can’t stop, won’t stop
Credit unions’ very mission has centered on financial inclusion and well-being since their very beginning in the United States in the early 1900s. The movement’s unique member-owner nonprofit dynamic produces clear beneficial outcomes, particularly in times of crisis or economic instability like the COVID pandemic. Take, for instance, these telling statistics from Credit Unions.com:
- Almost 70 percent of responding credit unions adjusted repossession strategies in response to the COVID pandemic
- The total balance of repossessed assets fell 22.9 percent between the first and second quarters of 2020 and has not increased to pre-COVID levels
- Credit unions reported they eased repossession policies if members communicated financial burdens related to COVID
“These numbers paint a compelling picture that the credit union difference improves members’ financial well-being and [advances] the communities they serve,” says Mike Schenk, Vice President of Research and Policy Analysis at CUNA. “Most importantly, this data comes directly from consumers and shows the stark difference between credit union members and non-members. It demonstrates that credit unions continue to do right by their members. Modernizing fields of membership would allow credit unions to do even more to continue to advance financial well-being.”
Moving credit union members forward using the four keys to financial health
Credit union members universally prosper better on the following four key factors of financial health. These results show that – across the board – credit union members prosper better than non-members:
Spending
A full 90 percent of credit union members claim their cooperative makes it easier for the member to manage their financial lives. More specifically, credit union members are 1.2 times more likely to respond “very positively” to the idea that their credit union makes it easy to manage their finances.
Over half of all members (54 percent) who use their credit union as their primary financial institution (PFI) believe their cooperative makes it easy for them to manage their finances. This makes them 1.4 times more likely than non-members to report they feel strongly about the difference their cooperative makes in reducing financial friction and spending money wisely.
Saving
Credit union members are half as likely as their non-member opposites to claim they don’t have instantly-available access to $500 for an emergency expense. Let’s stress this point again: Nearly a third — 30 percent — of all those consumers surveyed in the National Voter Poll claim they do not have at least $500 cash or equivalent available to pay off an emergency expense like a medical bill or car repair.
The ability to maintain a modest emergency cash fund or savings account is highly recognized as a key facilitator of financial resilience and stability.
Borrowing
Having access to credit is vital to financial well-being and resilience. Eighty-six percent of credit union members claim their cooperative makes it easy for them to get loans. Consumers with only knowledge of, or access to, high-cost credit sources like predatory payday lenders are likely going to deal with lower levels of financial health.
Small dollar loans from your local credit union and other small dollar lending products who partner with cooperatives — such as QCash Financial CUSO’s responsible and near-instantaneous mobile Life Event Loan program — can help millions of credit union members better manage budget instability, unexpected financial emergencies, and financial goals.
Planning
Credit union regulatory filings show that 86 percent of credit union members have access to financial education and literacy programs at their credit union. In addition, 79 percent of members have access to formal financial counseling services at their credit union. These services help people manage their money and plan for their future.
In any case, more results reveal that credit union members are two times more likely to use financial education and counseling services. Overall, 44 percent of credit union members are found to use those services, versus only 22 percent of non-members.
Access to such financial wellness services are particularly vital because the financial counseling and inherent planning involved more likely lead to improved financial resilience and intelligence over the long-term. Education and counseling programs boost confidence and increase adoption of strong financial habits like regularly saving money, managing money effectively and wisely, and reducing burden of debt.
