Putting Families Back on Track

United Federal CU helps members and non-members set their budgets and stick to them.



United Federal Credit Union, $794 million, St. Joseph MI, started a complementary budget counseling service in 2003. Judy Baker initially started working with distressed members to help prevent bankruptcy filings. Due to its initial success, the program was expanded to include those who recently lost their jobs, requested budgeting assistance, or any member or non-member experiencing financial distress.  According to Baker, “Many people don’t communicate with creditors when they are financially challenged. I tell them that this is not the answer and encourage them to contact their creditors and to utilize the counseling service.”

Publicizing the Program 

It actually started internally with credit union employees. Once the program was explained to the staff, they were excited, and took it upon themselves to spread the word. Employees started to listen and pay attention for signs that a member was financially distressed, and they would refer them to the Budget Counseling Service. News about the service has spread by word-of-mouth in the community. Many heard about it from family members and friends, but local news media also picked up on it.

While the program gets the majority of its referrals from credit union employees, it also receives them from local financial assistance programs, churches, community organizations, local businesses, and even other financial institutions. A non-member would be encouraged to join UFCU, but credit union is primarily focused on assisting these individuals. According to Baker, “Many of these non-members ultimately joined the credit union simply because United was willing to help them during their time of need.”

Once a member is referred to their service, Judy sends them a budget counseling packet to gather some basic information about their average monthly income, living expenses, bills, and outstanding debt. Judy is assisted by another employee who handles many of the initial calls, mails out the packets, schedules sessions, and tracks referrals. After the information is collected, a counseling appointment is scheduled. Because the credit union serves such a widely dispersed geographic area, most of the contact is facilitated through phone and email, but face-to-face appointments are scheduled if possible. Before the appointment, Judy identifies the individual’s most pressing financial needs using the information provided and uses this to frame the discussion.

Working toward a Solution

Judy works with each member to develop and enact a plan to help them become financially stable. According to Baker, “Sometimes the answer is simply cutting out unnecessary expenses, shifting resources, or providing the member with a healthy focus.” Her interaction with each individual varies widely. She is in daily contact with some, and weekly, monthly, or yearly contact with many others. There are some members that only need to come in once to get help setting a budget; there are others that she chats with on every payday to help them control their expenses on a consistent basis.

The credit union can work with members to extend certain types of loans if they meet specific criteria. If the member was recently laid off or has been unable to work due to medical reasons, UFCU can work with the member to extend the loan. They typically grant a two or three month extension and make sure that the member can feasibly afford the loan at the end of the extension period. Judy can also work with her clients to help consolidate existing loans, but she examines what caused them to fall into debt initially. If mismanagement of their personal finances was the primary cause for their distress, she will use alternate approaches before consolidation. She has found that these individuals usually need help understanding the basics of budgeting and personal finances before any further steps are taken.   

If an individual is in a situation where they have a large amount of credit card debt, Judy is not licensed to contact outside debtors. However, she will refer clients to a few specific credit counselor agencies. She identified several reputable agencies in each state where UFCU has a presence and formed relationships with them. Judy identified these agencies through contacts that she made participating in a regional bankruptcy task force and seeking recommendations from other credit unions. Each of the companies was thoroughly examined and Judy she regularly communicates with them to make sure that the referred clients are being treated fairly.

Judy personally helps each client initially follow their financial plan, but she takes steps to ensure that they grow to be self-sufficient. Eventually Judy makes the clients personally accountable for his or her own finances. They have to be proactive and initiate contact with the Budget Counseling Service and maintain their plans themselves. Making the client more accountable for his or her actions is a very important part of the process. If a client is hindered by medical conditions that do not allow them to accept additional responsibility, Judy will maintain primary control of their financial responsibilities (e.g. stroke victims).  

No Lack for Clients

Judy currently works with approximately 300 individuals intermittently and receives about 100 new referrals per month. If a member that she has previously counseled faces financial hardship down the road, they often contact Judy. “They always contact us again because they know that we are here to help them through their financial challenges,” says Baker.  


UFCU tracks the potential losses that the credit union would face if the members who use the Budget Counseling Service declared bankruptcy. These losses are estimated at $2 to $2.5 million. One of the first questions that Judy asks her counseling clients is whether they are contemplating bankruptcy. The answer to this question helps shape the advice and also informs the credit union that they should be cautious about offering lending solutions to members who are considering it. The vast majority of those who come to the Budget Counseling Service do not file bankruptcy, resulting in a win-win situation for everybody.

In the current economic atmosphere, financial assistance services are needed now more than ever. Referrals to the Budget Counseling Service have doubled since September 2007. There are not many budget counselors out there for UFCU members to utilize, and the credit union found that they could specifically improve the lives of their members and those in their communities by offering such a service. It also positively differentiates UFCU from other financial institutions in their service area. Judy Baker brings a large amount of passion into her occupation, “It is not just a job for me, this service helps people, and it gives you a chance to demonstrate how much you really care!”

The goodwill generated for UFCU by the Budget Counseling Service in the communities it serves is not easily quantified, but is tangible nonetheless. Over the years, Judy Baker and the Budget Counseling Service at United FCU have assisted countless members and non-members at a time when they need it most. 




July 7, 2008



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