So, as it always eventually does in my family, the conversation turned to credit unions.

I have two millennial-aged sisters that are very socially aware. They were raised to serve others in everything they do. The younger one, who thinks credit unions are stingy, even traveled to Washington, D.C., to camp out in McPherson Square during the Occupy demonstrations.

They champion local businesses, serving the underserved and belong to grocery cooperatives.

And yet, the older of the two said she's always meant to join a credit union, but just never gets around to it.

Then the younger one dropped the stingy bomb.

It doesn't matter if a potential member knows the seven cooperative principles by heart. Deny him or her for a loan. When the community bank down the street approves the same application, you've lost that person forever. And without her, you won't get her family members, either.

"What was your credit score," I asked. As I waited for her reply, I mentally queued up my risk-based lending and underwriting principles speech in the credit union's defense.

"Well, it's much better now," she replied, "but back then it was only 715."

Whoa, Sis is B paper?

Houston, we have a problem.

I don't know why the credit union denied my sister's loan application. My guess is that despite her good credit score, as a graduate student with student loans and low pay, she probably didn't meet the debt to income ratio. 

However, she was good enough for the community bank down the street, who gave her that first car loan. Then, a few years later, she needed to upgrade. She went back to the credit union and was denied again. So she went back to the bank, where they were more than happy to give her another loan.

I asked her why she thought the credit union denied her loan and the bank gave her the money, curious to hear her consumer's perspective.

Her answer was intriguing.

Credit unions are cooperatives, she said, so it makes sense they wouldn't want to take risks. That loan money is someone else's share account, so they have to be extra careful when making loans.

Yes, she used the term share and explained the one member, one vote concept to my other sister.

She also reasoned that the bank was friendlier because that's where her parents did their banking, and they know her family on a first name basis at their local branch.

"If I just applied at any branch, they probably wouldn't have approved me, but the people there always make some calls into the main office and help us out," she said.

That sounds like the kind of stories credit unions like to tell about themselves. Unfortunately, those stories might not be true.

Credit unions know they're missing the mark with younger generations, but can't quite pinpoint why. Attracting young people to cooperatives should be as easy as shooting fish in a barrel. Especially millennials, who tend to travel in cooperative packs.

However, even idealistic millennials need more than a stick it to the man philosophy. They want access to products and services. When they are denied, someone at the credit union needs to take the time to explain why and offer advice on how they can gain approval.

Nobody did that for my sister, so she was left to form her own conclusions. Conclusions that benefit community banks and make credit unions look risk averse.

Is your credit union unknowingly turning away young members because of tight underwriting? It might be time to review those metrics and consider taking on more risk. After all, just a few days ago Pew Research Center reported that millennials outnumbered Gen X in the workplace during the first quarter of this year. The generation had already overtaken baby boomers, and now the 35-and-under crowd is the largest chunk of the workforce.

With large student loan balances and delayed careers, millennials probably don't have the credit scoring of their parents.

It sounds like community banks have already adjusted to that new reality. Have you?