Feb. 28, 2008 at 1:47pm

There's a difference?

Posted by Melina Young in Strategic Communications, Talking to Members
Comments (8)

While doing some research last week I started thinking about the credit union difference and the Generation Y audience that credit unions are striving to convert to member-owners. I am a member of this tech-savvy generation – I’m 22 – and I can honestly say that before I started working with JayRay I was pretty fuzzy on the difference between credit unions and banks.

Keep in mind that I am a member of two different credit unions and also have some accounts with a bank that, as Mike pointed out in his recent post, my parents started for me when I was about 12.

There are two possibilities here:

1. I’m one in a million and most people my age know the difference between credit unions and banks.
2. There is a disconnect and most people in the under-25 crowd have no idea that there even is a difference, let alone the specifics of it.

So I went directly to the source and surveyed two of my friends. The result was less than optimal. Both friends graduated from college and are very intelligent, well-rounded individuals.

• Melinda, who has worked in real estate for several years, said, “A credit union deals more with cars and houses and purchases where you need to get your credit checked.” She could not name one credit union, but recognized BECU when I provided the name.

• Nicole, who only has accounts with a credit union and has never used a bank, did not know the difference either! Her guess was that credit unions are owned or sponsored by companies and banks are private. She could only name BECU (her own credit union).

This result has me a little worried. In my time working with credit unions I have become a true convert. The difference is awesome – but the target audience doesn’t know or understand how beneficial it would be for them to make the switch. Or even how to take advantage of the credit union they are already a member of.

I plan to do some more research among my peers and educate them along the way, but what can the credit unions do to get the attention of this generation? Common Wealth’s Young and Free account has the right idea. What are you doing to reach this group? Have you had any success?

Comments (8)

I am one of those rare people I guess that do know the difference (or at least one of the main differences) between the banks and credit unions. Credit unions are “member owned.” But what does that exactly mean…or better yet…translate too. Your friend was somewhat correct in they deal with “loans” and alot of that is word of mouth referrals that its better to go get your loan through a credit union because you get a better rate. But the education on why you get the better rate is a point that is always overlooked…or not taught. For the most part, marketing of credit unions has not focused on credit union benefits. Other than the occasional “you now can be a member” tagline… there are very few recollections I have of any credit union marketing outreach to the public. I think a focus on educating all the benefits of the credit union experience would help the credit unions immensly…and since the credit unions are member owned…it will help the people that are, or want to be members.
2/28/2008 at 12:15 pm
1 | Left by Jason | Aug. 27, 2008 at 1:40pm

---

To really know and understand a credit union is to love a credit union. I once had an idea for a campaign called, “Why are credit union people so crazy?” It’s true, even if you’re not a member you probably know someone who is, and typically that person loves her credit union. Look at Jamie. But that’s getting off topic. I’m still convinced the way to the kids is through their parents. Financial education is not part of school curriculum, and kids certainly aren’t talking about it amongst themselves, so what else is there? Parents.
2/28/2008 at 5:07 pm
2 | Left by Mike | Aug. 27, 2008 at 1:41pm

---

Great thoughts! Mike, I agree that parents are a key link to financial education in today’s youth, but perhaps the easier way to reach the kids is by incorporating these important life lessons into the school curriculum. This has already started through programs like Junior Achievement and Credit University, but is this enough? To really reach all kids and prepare them for the future, is it necessary to make financial literacy a required course in our public schools?
2/29/2008 at 9:22 am
3 | Left by Melina Young | Aug. 27, 2008 at 1:42pm

---

Melina,

Sounds like you and Mike should join the financial literacy coalition Jump$tart! Stacy Augustine from the Washington Credit Union League got me involved a few years ago.

Check into joining http://www.wajumpstart.org and the national is http://www.jumpstart.org.
2/29/2008 at 9:43 am
4 | Left by Jamie Chase | Aug. 27, 2008 at 1:43pm

---

I think you’ve nailed the most basic problem in credit unions today, there is no difference to the end user.
3/11/2008 at 4:03 am

5 | Left by CU Skeptic | Aug. 27, 2008 at 1:45pm

---

[I should initially add the disclaimer that I am from Australia, although after reading through many posts on different CU blogs (I'm a first timer here), the themes I'm mentioning should be familiar to you]

I think that in the end, the difference between CU’s and banks is becoming smaller and smaller. Sure, we trumpet ‘good service’, ‘better rates’, ‘lower fees’, and ‘more personal banking’… etc etc

But honestly, quite honestly, most CU’s are not sticking to the rhetoric. My CU included. Fees are getting more expensive. Internal Beuracracy gets more political. Execs are further and further away from the frontline.

If we want people to notice and be aware of a difference between credit unions and banks, we have to create some tangible and meaningful difference AS WELL AS marketing it well.
3/16/2008 at 2:53 pm
6 | Left by James | Aug. 27, 2008 at 1:49pm

---

CU Skeptic,

Haven’t you heard?

Credit unions saved consumers $11 billion last year.

That’s a pretty big difference to the end user and to the communities where those people reinvested that money. That’s why people volunteer for credit unions. The issue here is just bridging the gap to help the next generation understand it.
3/11/2008 at 3:35 pm
7 | Left by Jamie Chase | Aug. 27, 2008 at 1:52pm

---

Great conversation!

I lead a credit union team to deliver a comprehensive financial literacy program to 200 students during the 07-08 school year in South King County (definately a credit union difference!). We began the process with several diverse high school student (non-member) focus groups and forums with the district's career & technology teachers (52). Here are a couple of our learnings.
1. 80%+ students stated they learn thier financial planning skills from thier parents. ALARMING considering only 13% of adults balance thier check book monthly, high debt loads and negative savings rates.
2. Students expressed a desire to learn how to manage money, stating overwhelmingly that they would participate on thier own time.
3. A majority of the students all ready had a checking account and debit card.

I agree with the comment that it should be the parents responsibility to teach thier children, but having served in the CU community since 1985, I know that many parents don't know, what they dont know, and need education as well. Educators will consistantly tell you they do not have the time or resources to provide it, but agree with the need. The answer? public private partnerships focused on education and awareness.

Final food for thought on the need. A recent study pointed out the College Administrators state that they lose more students to poor financial decisions than to any other reason, including acadamic. The average college sophomore has an average of 3 credit cards.


8 | Left by Scott B. | Sep. 13, 2008 at 10:10am

Name:		Remember me
Email:
URL:
Comment: *    No HTML, http:// will auto-link

* required    Comment Guidelines

JayRay reserves the right to delete any comments that violate the following guidelines.

Comments should:
Stay on topic--or at least close.
Be brief and to the point.
Be cordial and professional.

Comments should NOT:
Endorse or promote any person, product, or company.
Disparage or defame any person, product, or company.

Please note:
Dissenting views are encouraged. Insulting language is not.
All comments with embedded URLs will be reviewed before posting.
These guidelines are subject to review and change at any time without notice.