The Value of CUs: If Only Gen Y Knew
As a journalist, I usually don’t dive into a new job as an expert on the subject matter I’m asked to report on. Instead, I become one, by reading articles and interviewing experts, whether the topic is technology or fashion. This job is no different. I went into it with only basic knowledge of credit unions, and over the past three months, my knowledge has deepened. And the more I learn, the more I realize: There really is no downside to CU membership for my generation.
One reason why I’ve assumed Gen Y would favor a national financial institution over a small, community-based one is the branch and ATM access factor. However, I recently met with the 28-year-old founder of the Portland, Ore.-based Young Credit Union Professionals, who informed me of CO-OP Financial Services’ CO-OP Network, which provides members of more than 3,000 participating credit unions with surcharge-free access to more than 28,000 ATMs in the U.S. and Canada, including 9,000 deposit-taking ATMs and 5,500 ATMs located at 7-Eleven stores.
That means a 20-something credit union member will have easy account access should he or she decide to move to a new city or take that out-of-state summer internship. And with the advent of mobile banking apps, remote-deposit functionality and robust online banking tools, there’s really no need for in-person branch visits.
Another quality of credit unions that Gen Y undeniably appreciates is their high level of customer service. During our meeting, the YCUP director mentioned that most credit union members can reach their CU's CEO by phone. How likely would it be for a consumer to talk directly to any executive level employee at, say, Chase?
My impression is that Gen Y prefers locally owned, mom-and-pop businesses over corporations. When it comes to shopping, we know we’re far more likely to find unique items, more personalized service and maybe even special discounts at an independently owned store than at a chain store. As an example, when I’ve had to write a product-based story for a publication, such as a holiday gift guide, I always visit local shops, where the owners are accessible and happy to be included in the story. (At a store like Macy’s, I’d have to go through a corporate media department for an interview.)
The final credit union attribute that should appeal to anyone, not just Gen Yers, is the likelihood of scoring a lower rate on a loan. When I told the YCUP leader that my auto loan has a 6% interest rate, he said he was certain a credit union could refinance it down to about 3%. Especially during a time when jobs are scarce and the price of necessities like gas and groceries keeps rising, going with the lowest possible interest rate on a loan only makes sense.
What’s keeping more Gen Y members from becoming credit union members? The problem could be PR. Many may not know what a credit union is, and with downsizing and budget cuts, most CUs can’t afford the flashiest, most expensive advertising spot.
If credit unions worked on developing creative ways of getting their message out to Gen Y, their young membership pool might start getting bigger. Because my guess is that once they understand there is no down side, they’ll be sold.