It’s difficult to summarize the state of the average American consumer right now.
Per data collected for September, various indexes show either increasing pessimism or optimism depending on if the topic is jobs, the likelihood of a recession, or how businesses are doing. Although most industry analysts feel OK about things right now, an air of caution is still very present. And with the holiday season rapidly approaching, many consumers are looking to save wherever they can.
Empower Federal Credit Union ($3.6B, Syracuse, NY) serves an area with one of the highest poverty rates in the country. As a Community Development Financial Institution (CDFI), it specializes in helping individuals undeserved by traditional banks.
“We’re seeing more members looking to save money on interest,” says Chris Keller, chief marketing officer at Empower FCU. “They’re shopping around for their home and auto rates to make sure they’re getting the best deals available to them. We try to provide both for our members.”
Similar struggles are impacting members of BCU ($5.9B, Vernon Hills, IL), which currently serves more than 350,000 people across northern Illinois, southern Wisconsin, and the island of Puerto Rico.
In 2022, BCU’s home-grown financial wellbeing program evolved into Life. Money. You. — a CUSO that now serves both members and non-members.
“We’re definitely seeing debt rates and default rates go up — all signs of stress,” says Bjorn Larson, executive director of LMY. “People are having a difficult time deciding what to say no to. You can only cut out so much.”
Laron says the number of appointments LMY is seeing also has jumped significantly this year, from an average of 600 in 2020 to nearly 6,000 in 2024.
After offering financial wellbeing services to members for years, BCU created a CUSO and rolled out a mobile app that guides members and non-members alike through life’s financial milestones. Learn more in “Financial Wellbeing For Members. Financial Wellbeing For All.”
Success Starts With Empathy And Expertise
It’s important that credit union teams have not only extensive financial knowledge but compassion as well. This is something in which Empower FCU takes great pride.
“It can be a hard, humbling experience to come to a financial institution and say you’re having trouble making your payments — this is an opportunity for us to show empathy,” Keller says. “When we make hiring decisions, we look to people with great interpersonal and member service skills. It’s essential. It builds a culture of trust that our members can feel.”
To make sure MSRs’ expertise is up to date, Empower FCU provides continuous education through training and online learning tools. Its management is well-seasoned as well. The average branch manager has been in banking for more than 10 years, ensuring they are well-versed in approaching conversations with members with compassion, fairness, and an eye toward solutions.
“If you ask our employees, they’ll say helping members is their favorite part of the job, regardless of the situation,” Keller says.
Although supporting economically vulnerable members might pose short-term financial risk to a credit union — including higher delinquency and charge-offs — the long-term benefits speak to the heart of the credit union movement.
“What are we really here to do?” Larson at Life. Money. You. says. “Are we here to add memberships and add profits, or are we here to help people? I think you can do both if you do them in the right order. If you help them in an authentic way, especially when they’re in a dire situation, they’re going to want to stick around.”
Quality Service For Customized Solutions
Quality staff, however, is only half the puzzle. Credit unions also need innovative products to meet a variety of member needs.
For members, BCU offers products like an interest-bearing checking account, a rainy day savings account, credit builder loans, and various investment options. BCU also has a free credit score checker, an online budget-building tool, and a savings goal calculator.
Life. Money. You. takes this one step further with its own financial tracking app called MoneyTracks designed to provide in-depth assistance with day-to-day wealth management.
“We don’t always know how people are going to come to us, what shape they’re going be in financially,” Larson says. “That’s why you have to have a variety of tools, and you have to offer things to different types of learners.”
Empower FCU also offers an online budgeting tool for members as well as tools that show them the amount of interest saved. In addition to assistance provided by financial advisors, the credit union also has an extensive online library of resources covering everything from retirement and estate planning to insurance and tax advice.
According to Keller, it’s important to look at a member’s financial situation holistically rather than by piece meal — for example, one late loan payment or over-extended credit card — so advisors can show members how and where they can make more meaningful adjustments to save.
“Make time to hear their stories and concerns so you can offer solutions that meet their needs at that time,” Keller says. “Show you’re really listening to them. If you have products that can help them or alleviate a burden, it helps with overall communication because that communication centers on a solution.”
Time For The Credit Union Difference
When discussing strategies and setting long-term goals, it’s imperative to keep an eye on the big picture. But the individual, everyday impacts these strategies underpin are important, too.
“We had one person come to one of our webinars, meet with one of our financial coaches, improve their credit score, and get their first ever mortgage,” Laron says. “That’s where I think credit unions can stand out. Being willing to work with people like that instead of a cold shoulder mentality where because someone’s struggling, they can’t work with us anymore.”
Empower FCU often opens doors that other institutions would close.
“There was one situation where a member was in great need of appliances — a stove and a refrigerator — for his home,” Keller says. “He was keeping his food outside during the winter so it wouldn’t spoil. He had a 475 credit score, which proved hard for him to get loans from other institutions. When he reached out to us, we were able to provide a CDFI loan so he could buy those appliances and experience a better sense of security.”
With a focus on member-centric solutions, community impact, and digital innovation, credit unions like BCU and Empower FCU are among the financial institutions uniquely equipped to help their members achieve greater financial stability, strengthening the overall financial health of their markets while staying relevant in a rapidly evolving world.
“Our mission is to help our community and boost people up,” Keller says. “It’s in our name. We believe in giving back to the community not only with our products but also by volunteering our time and presence. That helps members feel empowered, too — seeing we’re here and we care.”