A strong credit union must integrate fully within the communityit operates, especially if there are fundamental edification needs.Is your credit union a guardian of financial literacy,philanthropic about educational programs, and a strong partner foreducating the community?

Findings suggest that early education in schools, withappropriately trained teachers, armed with properly designedcurriculum, can be effective, especially if the socio-economicfamily aspects are addressed and schools partner with unbiasedprivate or public-sector providers.

There are numerous supporting explanations for this statement.First, studies suggest that financial education improves measuredfinancial behaviors in elementary, middle, and high schoolstudents.

Second, research demonstrates that early education is crucial aswell as having properly designed curriculum and customizedprograms. Furthermore, waiting until high school is too late whilefinancial education programs such as Financial Fitness forLife, I Can Save, Money in the Middle andJump$start have demonstrated past positive results.

Third, the literature suggests behavior improvements carryforward into peak earning years with increased savings rates andhigher net worth for educated students as compared to otherstudents. Not surprisingly, financial education is a key predictorof financial knowledge and financial knowledge is a key predictorof financial behavior.

Fourth, families play a distinctly important role in financialeducation given the socio-economic correlations found instudies.

Last, the National Association of State Boards of Education inits 2006 report recommended, among other things, to leverageprivate/public partnerships in the fight against financialilliteracy.

Although a macro problem, the solution to financial illiteracyoften lies at the local level. Schools are the ideal deliverychannel for financial education as suggested by the literature.Yet, teacher training and teacher confidence in financial conceptscan be a roadblock to successful financial education in theclassroom. Other impediments from the research include suitablecurricula and a lack of resources.

Moreover, due to potentially competing interests and differingvalue systems, pupils studying financial education may suffer fromlow perceived intrinsic value, a lack of motivation to learn, or amuted desire to retain the skills.

Sadly, the research also suggests that unscrupulous firms maycapitalize on consumer vulnerabilities and during “teachablemoments” when delivering commercially developed financialeducation.

Therefore, not only are member-owned financial cooperativespotential local partners as suggested by the NASBE report, one canalso logically infer that credit unions are superior partners ashonest corporate citizens, altruistic organizations and unbiasedexperts in the communities they serve.

Besides the teacher and student factors, there are at leastthree additional factors related to low financial literacy. Productrelated issues such as complexity, punitive defaults, misalignedsales incentives, and confusing disclosures often impedeunderstanding.

Next, larger educational system factors such as minimalstandards, insufficient requirements to implement those standards,or minimal testing requirements may exist.

Finally, and most importantly for this article, there are thesocio-economic factors such occupation, income, education level,place of residence, access to financial services, language, andmonetary values and norms than can plague families, the samefamilies of the most at-risk students.

Ergo, besides ensuring that a credit union's products andincentives are welfare enhancing to members and lobbying forstronger educational standards in the school systems, credit unionscan synergistically tackle the socio-economic challenges offinancial literacy in the community while generously supportingschool efforts.

More explicitly, credit unions should undertake a dual approachand provide robust community and school outreach programs in theirlocal areas. These programs and the aforementioned partnershipendorsement are excellent opportunities for all credit unions, anda call to action.

So, how can credit unions help? Solving the confidence issue andthe intrinsic motivation problem are two keys. For example, lowconfidence is caused by a lack of knowledge. A lack of knowledge isrelated to a lack of training. A lack of training for teachers iscaused by a lack of availability.

Here, teacher workshops, resource support, school visits,matching funds for student accounts, donations, a school-to-schoolmobile branch, and opening mini school branches are some ways tohelp.

Students need to be taught why financial literacy is soimportant and rewarded with age-appropriate prizes, gifts, fieldtrips or skill development. Additionally, targeting thesocio-economic correlations is very important. Credit unions cansponsor community outreach groups and invite additional creditunions, libraries, community centers, civic organizations,churches, and other applicable opinion leaders to collaborate.

Moreover, credit unions could train community volunteers toreach out and educate individuals about financial topics. Creditunions should also hold community workshops, incentivizeindividuals for completing programs, provide language translationservices, offer individual counseling and lead community awarenessand social marketing campaigns through various channels.

In summary, is your credit union undertaking enough socialresponsibility for those who can least afford to make a pooreconomic choice?

If financial illiteracy is a local issue, which is likely thecase, then credit unions can make a difference through schoolpartnerships and strong community outreach programs. Taking thisaction will not only create lasting public value in the community,it will improve credit union legitimacy and most importantly,lives.

Anthony W. Montgomery is a senior director for aglobal non-profit in Nashville, Tenn., a former credit unionexecutive and currently pursuing a doctoral degree ininterdisciplinary leadership from Creighton University in Omaha,Neb.