WASHINGTON–Turn a kaleidoscope on the world and credit unions and what do you see? Often, it’s not pretty colors, according to a panel of credit union representatives who shared a wide variety of perspectives but who also agree that with another turn, credit unions can help change that view.
Panelists during the session titled “Kaleidoscope” at Mitchell Stankovic’s Underground meeting, included Maria Martinez, president and CEO of Border FCU; Cynthia Campbell, COO with BALANCE; Lois Kitsch, co-founder of CU Difference; and George Ombado, executive director of ACCOSCA (Africa).
Martinez, who acted as moderator, noted that when you spin a Kaleidoscope everything looks so beautiful, and then when one spins it again, it looks so different. But she asked how much of what is taking place in the world can be presented as a just a beautiful view. According to the panelists, not much.
Here is some of what else was discussed:
Q: How do we turn things around in a positive way?
Kitsch: Through the years I have worked with credit unions in really dire circumstances. Our world is changing and yes, we want this to be positive, but we also have to be aware of what consumers and members are actually facing.
Development issues are global. I spent many years working in Asia and the Philippines and I saw development issues everywhere, and then I came back to America and went holy shit, they're here, too. One in seven Americans is food insecure and these statistics are before COVID, and 49% of Americans don't have $400 in a savings account to actually address an emergency. People sleep in the street in big cities around the world because they don't have access to affordable housing.
So, think about that and your credit union. If you're coming from a place where we need to do this because it generates revenue for us, then you're missing the opportunity to build your business based on doing the right thing.
The first and foremost thing we do in credit unions is provide access to affordable financial services, to loans that members need, loans that are productive in nature that help members actually grow their financial awareness.
OD Conversation Not New
By the way, this whole conversation around overdraft protection we are having now is one we were having 20 years ago. I said to an old friend of mine that you are making the bottom line in your credit union by encouraging irresponsible behavior by your members. Yes, there is a place for overdraft protection, but 20 years later we're still having this conversation about credit unions that make their bottom line by oftentimes offering a product that's maybe not good for members.
Q: What does change mean for Africa?
Ombado: Africa is a continent of 1.2-billion people with a median age of 18. Just like in America, I also see challenges. Climate is affecting us in many ways. I see a continent where the women might not be getting an equal opportunity like men. I see a continent where the young people do not even have an opportunity to do what they're meant to do.
Looking to the Other Side
But if I also look at the other side, in United States of America I know I see a beautiful country. It is the land of opportunity. But I'll also say in America I don't see the black people, for instance, getting more opportunity. When you go into places you get less of people who look like me. In America where there is hope, at times they don't realize that we are blessed. In parts of the world people struggle to get three meals in a day.
I look at these in different lenses. We live on a continent where at one point a country has inflation of 5% and in 18 months the inflation has gone to double digits, 54%. How do credit unions survive in that environment? I also live on a continent where if the unemployment rate goes to 30%, it’s not so bad. We have our role as credit unions to support that particular space.
Martinez: What are some of the issues that you're dealing with?
Campbell: Kaleidoscope is a word that comes from three words: beauty, that which is seen and to examine. The observation of beautiful forms is really what it means.
You can't work a kaleidoscope without light. You are the light in this world.
I've looked in this industry for 19 years. I've had a pretty singular view of this. I've always been for the financial capability of our members, and every job I've had in the last 20 years has a dotted line back to that.
We've come from having just like a single financial counselor in our marketing department. Fast forward 19 years and what I see is financial capability getting weaved in through your credit union. It's (embedded) when you're talking to a member. It's with your employees as you're onboarding them. It's in your collections processes. It's in your lending. When you can't say yes you say, ‘We're going to say yes eventually. This is how we go get some financial counseling to raise that credit score.’
The Need for Measurements
So, when I look at that kaleidoscope and I see the beautiful forms of financial capability in this industry, you guys just keep going. How do you measure that? Like really measure it? It's not butts in seats at workshops. That's a good start and please still report it. But let's use systems. We have data. Let's measure the increase in income, the decrease in debt, the increase in credit scores. Yes, this financial counselor helped 20 people this week, but what has changed in their life?