MADISON, Wis.–The demographics of credit unions aren’t helping loan volume, which is why CUs must work harder to penetrate younger consumers, according to CUNA’s chief economist.
Mike Schenk, who is also the trade group’s deputy chief advocacy officer for policy analysis, said soon-to-be-released mid-year estimates for credit unions show there continues to be an ongoing, long-term increase in average age of credit union members. Combined with another long-term trendline, a decline in workforce participation, and the two trends are coming together to affect credit union loan volume, Schenk said.
“The sad fact of the matter is older people don’t take out loans at the same pace as younger people do,” said Schenk. “It shows the importance of building relationships with younger members.”
Schenk said the average age of CU members is in line with that of commercial banks.
Another ‘Interesting’ Finding
Another “interesting” finding from CUNA’s mid-year analysis of credit union data show that in looking at trends from 2001-19, people who identified as primary bank customers declined approximately four-tenths of 1%. Over that same period, credit union membership increased approximately 2.8 percentage points, while individuals identified as “unbanked” declined 2.2 percentage points.
“This is in line with a theme we have been focused on for years, ‘financial well-being for all’,” said Schenk. “We can’t say from this data that credit unions were the driving force behind the decline in unbanked, but it’s an interesting perspective and one we will be investigating in a little more detail.”