Credit union member demographics may surprise some

MADISON, Wis. - A just-released demographic study found that credit union members are more likely than non-members to be e-savvy, well-educated, married, and own their own home. The CUNA/PSI Global joint study looked at member demographics today and what they may look like tomorrow. The study found that 21% of credit union members are high school graduates; 24% are college grads with a four-year degree; and 15% have an advanced degree. Among non-members a higher 36% of them have high school degrees, but only 18% have four-year degrees and just 10% have advanced degrees. Credit union members are more likely to say "I do" than non-members. Sixty-six percent of members are married, while 54% of non-members are married. That's an important distinction, according to the study, because married households demand a wider variety of financial products and services. Households that consider their CU as their primary financial institution are most likely (61%) to include a husband and a wife. A whopping 78% of credit union members own their own homes, compared to 69% of non-members, according to the study. Credit union members also do the 9 to 5 thing more than non-members. The study found that 60% of credit union member heads of household work full-time, while just 44% of non-member heads of households do so. One potential boon for credit unions is the dual income household. Forty percent of members live in dual income households, compared to just 27% of non-members. Credit unions aren't doing a great job serving the younger and older segments of adult consumers. Consumers between 18 and 24 years of age make up 3% of members, while they made up 6% of non-members. At the other end of the spectrum, consumers 65 and over make up 17% of credit union members, and 26% of non-members. The study cited a long-term relationship with banks and S&Ls for core services as a reason the 65 and older group is not as inclined to be credit union members. Despite all the discussion about serving low-income members, the study found that 51% of members are part of a household with $50,000 or more in income, compared to 33% of non-members. One reason for this wide disparity, according to the study, could be that members are "more likely to be married, better educated and ages 35 to 54, part of the peak income-earning years." Looking at the lower income segments finds that 9% of members make between $10,000 and $20,000, while 18% of non-members do so. Going further down the income ladder finds that 4% of members make less than $10,000, compared to 13% of non-members. Credit unions may want to bolster their mortgage lending operations when considering that the study found 54% of members live in "family" households (three or more persons), compared to just 35% of non-members. These are the groups that would be more prone to taking out mortgage loans, said the study. Some bad news of the study comes in the area of debt. Debt reduction was the most important short-term financial goal (21%) for every income group studied among credit union members. Next on the list was building a comfortable retirement (11%) and maintaining current standards of living (11%). After that came saving for their children's college education (8%). Buying a car; retiring early; and saving for vacations all scored at the bottom of the list of goals at 3%. As for long-term financial goals, saving for retirement was the top concern with 30% of members indicating that was their first priority. Next came saving for children's college education (7%) and saving more for retirement (7%). Reducing household debt dropped down, with only 4% of members citing that as a long-term goal. Long-term goals are skewed to retirement, found the study, because CU members, like the rest of a large part of the American population, are nearing retirement. Forty-percent of members are between the ages of 45 and 54, and 39% are between 55 and 64. The typical member that considers their credit union as their PFI has between three to four credit union products. That's better than the non-member holding only 2.8 products at their PFI. The study's member satisfaction findings are similar to a recent finding in a Consumer Reports study and past American Banker studies. Sixty-five percent of PFI CU members said they were "very satisfied" with their credit union, compared to 47% of non-primary members. One big blow to credit unions the study found is that 90% of members maintain some type of relationship with a bank. The industry's growing focus on technology, especially the Web as a delivery channel, may be right on target. The study found that 74% of credit union member households own or use PCs, compared to 53% of non-members. Fifty-five percent of members go online, compared to 37% of non-members. When it comes to PC usage, credit union members are ahead of the game, but the online news isn't all good. Only 9% of members report using their credit union's home banking system. While that number is low, just 5% of non-members reported doing online banking. More bad news is that only 12% of members who don't currently use online banking said they would if their credit union offered it. Security concerns, though declining in recent years according to many consumer studies, are not dead in credit union land. Some 45% of members said they feel it is unsafe to make online transactions. The study is based on 3,217 randomly selected household respondents. PSI Global is an independent research firm specializing in the financial services industry. -pgentile@cutimes.com