By Frank J. Diekmann
It’s always perplexing to me to hear how often credit unions seem unsure of which markets to serve next, as if the fintechs and big banks have gobbled up all the loaves of bread on the shelves and there aren’t even an crumbs to be found.
And yet every week CUToday.info is reporting on opportunities—duties, really—in markets that are a lot more than crumbs, they’re entire bread aisles. And it isn't crumbs you should be looking for but people feelling crummy.
Take for instance a number of recent reports based on surveys of everyday Americans who are deeply worried, if not completely stressed out, over their finances. Most recently, a survey of 1,000 U.S. households found people saying they were skipping meals in some cases to have the funds to pay for housing.
Then there has been the creation of what in earlier generations would be considered a select employee group (SEG), except they’re often not employees at all—they’re gig workers. It’s an entirely new class of worker that credit unions have had to adjust to, and probably not all that effectively.
Gig workers will be the first to tell you that the gig brings with it financial worries and little in the way of retirement savings.
One new study sponsored by Legal & General Group, “U.S. Gig Economy, Part 6,” looked into the financial challenges people working in the U.S. gig economy face as they contemplate a post-retirement life.
The sixth report in the study explores the challenges many gig workers must tackle, from being unable to cover an unexpected $1,000 expense to lacking the ability to plan for retirement, according to Legal & General. The study found 53% of the freelancers surveyed thought that gig work negatively impacted their access to savings and retirement plans, while 29% felt that choosing to work this way negatively affected their ability to save.
‘Particularly Difficult Challenge’
“Though they have higher levels of financial literacy than the average American, independent workers find that retirement planning poses a particularly difficult challenge,” Legal & General said. “While the survey elicited a complex array of responses to a question about which financial security benefits they hold, more than three-quarters (77%) of those surveyed said their own personal savings will provide the largest contribution to their retirement income—while 30% of gig workers never expect to retire at all.”
Perhaps America’s credit unions should launch a national effort to reach out to gig workers. After all, helping people most in need is supposed to be at the core of the credit union gig.
Hey, CFPB, What About This Junk Fee?
Credit unions are rightly worried over just what the CFPB has planned for “junk fees,” as the Bureau seemingly considers any fee to be junk. But maybe Rohit Chopra and the gang should also be taking their magnifying glasses to the junk fees being charged to credit unions (and their employees).
Case in point: the Aria hotel in Las Vegas. It was host to a recent fintech event that drew a pretty good turnout from CUs. When checking in, guest are informed they will automatically be billed $150 a night for “incidentals.” They already have your credit card, so why they need to automatically stick it to you for these undeclared “incidentals” isn’t mentioned.
That is, until you realize that with approximately 4,000 rooms that $150 comes to about $600,000 a night, or a decent-sized credit union at $219 million a year. While you get the money back at check-out, that $219 million is essentially funds its guests are loaning—free--to Blackstone Group, the owner of the hotel, on which it earns interest/returns.
I guess they’re right—the house does always win. No wonder they’re singing arias. Almost makes me nostalgic for the old days of the $35 “resort fee.”
Let Them Eat Cupcakes
Speaking of the Aria Hotel, the faux-ivy covered booth you see at right was located inside the trade show at the recent Fintech Meetup event. There was no sign other than that you see, “Ring for a treat.” If you rang the bell a mysterious hand would emerge through the ivy and give you a free cupcake. (Maybe that’s where the buck fifty goes.)
Yes, But How Do You Feel?
Charles Munger, the billionaire investor and businessman who is vice chairman of Warren Buffett’s Berkshire Hathaway, is 99 years old. Which means he’s seen it all before and doesn’t really have the time or patience to see it again, especially sketchy investments. So, when Munger decided to speak out on cryptocurrency, he got to the point.
Writing in the Wall Street Journal, Munger called for stricter crypto regulation. “In some cases, a big block of cryptocurrency has been sold to a promoter for almost nothing, after which the public buys in at much higher prices without fully understanding the pre-dilution in favor of the promoter,” opined Munger, who added all this “wild and wooly capitalism” is much like that described in a remark often attributed to Mark Twain, who was thought to have said that “a mine is a hole in the ground with a liar on top.”
Wretched Excess’
“Such wretched excess has gone on because there is a gap in regulation,” Munger continued. “A cryptocurrency is not a currency, not a commodity, and not a security. Instead, it’s a gambling contract with a nearly 100% edge for the house, entered into in a country where gambling contracts are traditionally regulated only by states that compete in laxity.”
So, it appears the MungerCoin is out.
I Don’t Get Out a Lot
A recent survey on how people make payments for in-person, in-store purchases found that 2% of those surveyed reported not making an in-store purchase during the prior six months.
Wait an Hour? Unbearable
The need for speedy—actually, instant—transactions when serving members/consumers today has been a frequent subject of coverage in CUToday.info in recent years when it comes to everything from account openings to loans to payments to repossessions.
So, I was particularly struck recently when I heard this bit from George Carlin.
“Can anyone explain to me the need for one-hour photo finishing?” asked Carlin. “ You just saw the…thing! How can you possibly be nostalgic about a concept like ‘a little while ago’.”
That observation/comedy was shared in 1996.
I can only imagine what his reaction would be to outrage many feel over slow Internet speed or getting impatient while waiting for the person who just shot the group selfie to send it to the group chat.
Frank J. Diekmann is Cooperator in Chief of CUToday.info and can be reached at Frank@CUToday.info. Mr. Diekmann is also author of several new book, including the brand new “The Last Lyric,” a humorous satire about a murder investigation at the Rock & Roll Hall of Fame in which every line of dialogue is either a classic pop/rock song title or lyric. Available on Amazon, Apple iBook, Barnes & Noble and Smashwords. Mr. Diekmann is also author of a non-fiction compilation of the very best & worst he has seen and heard in covering more than 500 CU meetings and conferences, “501 Name Tags: How Everything You Need to Know About Business Can Be Learned at a Conference & Forgotten in the Trade Show.” It is available on Amazon, Barnes & Noble, Apple, Lulu, and Smashwords