By Frank J. Diekmann
There were two recent headlines that got the top-of-page treatment, but it seems most in credit unions read and remember the wrong one.
The first headline—and it appeared more than once—ran on top of all the stories about how the credit union tax exemption survived the tax reform debate, first in the House and then in the Senate. Like the around-the-clock coverage of the Chilean miners being rescued, there were breathless updates from the Washington trade groups each day that no changes to the credit union tax status were included in the legislation—although those dastardly congressmen might come and grab it at any minute.
That very same week another headline appeared that deserved a capitol dome’s worth more attention than the tax exemption stories received (let’s be honest, the exemption was really pretty much exempt from any real threats), but sadly, received a chorus of crickets: A lot of credit union members are hurting.
That very same week congressmen couldn’t find a microphone fast enough in which to say the words “helping working class Americans,” the National Credit Union Foundation released some findings about those very same working class folks. More than half (58%) of members, the research found, say they are struggling financially.
The NCUF findings weren’t just based on some group of community development financial institution CUs. The Foundation said the combined survey sample size was more than 28,000 people. “The importance of this work is that we’ve known that national statistics show a real need to help consumers stabilize their finances,” said NCUF Executive Director Gigi Hyland. “This work shows those same results but with credit union member populations.”
A striking finding about the nearly six-in-10 members who are finding a lot of week left at the end of the paycheck is that, as the NCUF noted, while financial health is correlated with age and income, there are financially struggling members at all age and income levels.
Racing to Grab the Keyboard
No doubt there are some in the credit union community who have read this far and are already involuntarily reaching for their keyboards to remind me, as we so often hear and see in letters to Congress and responses to bankers’ op-eds in the newspapers, that the tax exemption isn’t based on serving poor people or people of “modest means,” but instead on the “cooperative structure” of CUs.
Indeed, it is. But what is it that people inside that structure are cooperating over? It’s supposed to be about mutual self-help, the hand up over the handout, as you’ve no doubt heard, applauded or even said yourself. If you’re one of those (few) credit unions that actually tells members what a credit union is, you may have it spelled out right there on the walls of your branches (and you should). But what are you doing about it?
“Measuring member financial health metrics alongside business metrics enables credit unions to understand whether they are making a quantifiable difference in their members’ financial lives,” said Hyland in a statement accompanying the release of the NCUF research.
Well, are you? Are you making a quantifiable difference in your members’ lives? That question isn’t just deserving of one headline; it’s deserving of many, and on an ongoing basis. It’s the headline that should be on top of every report you read, every PowerPoint slide you create, every meeting room you walk into and out of.
A 2018 Resolution for You
The credit union tax exemption represents hard dollars based on a soft, qualitative ideal. Here’s your chance to make it quantifiable, not just in the ways inside the credit union that are noted by Ms. Hyland, but across the credit union community.
With the headlines from the tax exemption “victory” still fresh in everyone’s minds, I’d like to challenge individual credit union leaders and the leaders of the trade groups to make it a 2018 Resolution to remind the country where those exempt dollars go. Hey, if you’re going to talk about being in the people helping people business, then help the people who could use it.
That would be a victory from which no one would be exempt.
Frank J. Diekmann is Cooperator in Chief at CUToday.info and can be reached at Frank@CUToday.info or @FrankCUToday.