Generation Why? Why Today’s Youth Should Be Today’s Members

Generation Y is increasingly socially conscious. As they mature, this large segment of the population will look to put their money where it matters. What can credit unions do to respond to this growing need for investments that help the community?


"Credit unions do help their members but I'm not sure they really help the people who need the most help in the community."

A 25-year-old recently made this statement during a conversation about finances. Trying to explain why he had decided to leave his hometown credit union, he said he felt that a community development bank in his neighborhood was able to make more of a difference in the community than credit unions could. He wanted to feel his dollars were helping those around him.

My friend’s interest in helping his community was not as surprising as it would have been 10 years ago. Recent studies have shown an increasing level of social awareness and responsibility among young people. One 2005 study by UCLA’s Higher Education Research Institute found that two-thirds of college freshman felt it was essential to help others in need and measured the sense of social responsibility among this group as at its highest level in 25 years.

This socially conscious member of Generation Y thought that he could better help his community by joining a bank. This came as a surprise to me. As a fellow Gen Y-er, I understand the need to feel that your money, however little you have, makes a difference. As someone who works with credit unions on a daily basis, I’ve become familiar with the wonderful things they do to serve their members and communities. I wondered why credit unions were not the immediate choice for those who want to make a difference.

Banks Capitalize on Increasing Social Consciousness

In the past few years banks have capitalized on the trend of increased social responsibility. Perhaps the most widely recognized example is ShoreBank, headquartered in the South Side of Chicago. Their "triple bottom line" mission statement emphasizes "people, planet, and profit" through community redevelopment. For example, since their founding in 1973 they have financed the building of 45,000 affordable housing units.

Here in Washington, DC, socially conscious citizens like my former credit union member can invest funds in City First Bank, one of several community development banks across the country. City First’s website, the first point of contact for many Gen Y-ers when making financial decisions, emphasizes their position as a bank invested in the underserved communities by funding affordable housing initiatives and small businesses. Thanks to their involvement in the Certificate of Deposit Account Registry Service, select banks can offer their customers up to $30 million in FDIC insured deposits. The deposits are then loaned out to other member banks that use the funds for redevelopment projects.

Credit Unions: The Original Community Developers

What my former credit union friend didn’t realize when he made the move to a bank was that credit unions are heavily involved in their communities. From the beginning, the credit union story has been one of helping the underserved, and this remains the case today. Recently in DC, three credit unions partnered to serve the underprivileged minority population in Adam’s Morgan, one of the neighborhoods also targeted by City First bank. Today many members have savings and checking accounts for the first time in their lives and have escaped the cycle of payday lending with affordable alternatives. The story of Accesso credit union is one that could inspire many Generation Y youth to join credit unions.

As members of Generation Y mature, the way we envision finances may change. Some of us are not at the stage where we have money to invest. However, my friend who now belongs to a bank points to an increasing segment of the population that credit unions have an opportunity to build relationships with. Generation Y has been accused of lacking focus, having short attention spans and being spoiled by MTV and 24/7 access to technology on demand. These accusations may or may not be true. However, we are passionate-eager to take our place in the world as a new generation of leaders. Many want to invest in something that will make a difference and is bigger than us. How will you respond?





Nov. 13, 2006


  • This past weekend I attended a community-based think tank and discussion forum that explored causes, effects and potential remedies to the ailing U.S. Economy. The dialogue ran the gamut between emotionally charged and highly informative and even enlightening. In the end, I was persuaded that you and I can be part of the solution, that it does not have to be difficult and that we could actually start to see real benefits for ourselves and our families.

    The U.S. is immensely rich in natural resources and an enterprising population at all socioeconomic levels. Despite the message in the media that shortage of resources is due to unsustainable supply (resources) and demand (population growth) ratio, I was convinced that, more than a scarcity issue we have a resource distribution issue in this nation. While the supply-demand problem is all too real it is also true that now, more than ever in our history and even more than in the 1920s, we have a wealth gap on a collision course with history. (Think world revolutions!)

    However, it was suggested that just two citizen-based collective actions combined can help restore the U.S. economy back to health. In fact our entire socio-economic future could potentially shift beyond sustainability toward a more regenerative balance and a higher civilization. These two remedies are:

    1. Tax Reform Legislation: Banks, large corporations and the super rich must pay their fair share. There is no rational reason why you and I, the dwindling middle class, have to pay up to a 40% tax rate while banks, corporations and the super rich pay only a 15-19% tax rate. With the advent of the internet and information age, all previous theories that the super rich can save the economy through job-creation and industry have been almost completely discredited. Even the poster-child of the super rich, Warren Buffet is telling us to "Stop coddling the rich!"

    2. End the era of private-interest banking conglomerates: You and I, middle class America can take corrective action. Money talks. Big banks' sole purpose is to make money from other people's money. Today, because of a government bail out and a secret money infusion by the Fed, banks are sitting on record amounts of cash, OUR cash. What can they do with it? They can continue to sit on it or try to lend it in hopes of making more money. "For what?", you may ask. For private profit, that's what. Furthermore, our money is not 100% safe in private banks. In the Stock Market crash of 1929, people banged on the doors of closed-up banks unable to get their money to feed their families. The money was gone and there was nothing anybody could do about it. In today’s fear-based economy EVERYBODY, individuals and institutions alike are holding on tight to their money. It is as if nothing is moving.

    So, what is the second solution? Taking all our money out of the big banks and into community-based, socially conscious credit unions can potentially change the world. If we do so, we can immediately start to see a higher return rate on our dollars and an easier way for non-profits to fund projects and, hopefully, generate human and capital resources. A credit union is a financial cooperative institution "of its local members, by its local members, for its local community of members."

  • Interesting that it was a credit union member switching to a bank for its values. The question really is how can credit union better demonstrate their difference, especially the elusive Gen Y?
  • Indirectly this story highlights the downside of CUs becoming more bank-like--created room in the market for for-profit institutions to establish social responsibility bona fides. Collectively we need to be thinking of how we can do bold new things to create value. Price and service alone are not going to see us through!
  • We should not be looking at this problem in terms of "let's help some underserved people so that people will know we're involved in the community." Instead, we should be doing the right thing just for the sake of doing the right thing. That is what the whole credit union movement was founded on. I do not think mass numbers of Gen Y'ers will be moving their accounts because their credit union is not active enough in the community, so this should not be a money issue. Unfortunately, many credit union leaders tend to worry more about the tax issues behind social responsibility than the ethics behind it. This probably is not a popular comment on this site, but as a fellow Gen Y'er with 8 years of credit union experience, I thought I would contribute my two cents.
    Mark K.