Financial health: ‘A hallmark of membership’

Credit unions prioritize financial well-being for all because it’s the right thing to do, the smart thing to do, and the relevant thing to do, according to a white paper from the Councils, powered by America’s Credit Unions.

“Financial well-being for all appears to be a hallmark of membership in a credit union,” the white paper reads, noting that credit unions were founded to build financially healthy communities. “By prioritizing consumers’ financial well-being, credit unions make their promise bigger, deeper, and more powerful. The words ‘for all’ remind us that every person deserves financial well-being. Everyone should have the opportunity to thrive financially.”

While credit unions provide these opportunities, financial well-being isn’t universal. All people have variables affecting their idea of financial health, requiring credit unions to deepen member relationships to determine what members need to improve their well-being.

In general, financially healthy individuals tend to have the: 

• Confidence to manage day-to-day finances.
• Capacity to absorb financial shock.
• A partner to meet financial goals.
• Financial freedom to make choices in life.

Many Americans aren’t hitting these marks. The Financial Health Network’s Financial Health Pulse® 2022 U.S. Trends Report found that Americans’ financial health declined for the first time in five years. The percentage of financially healthy adults fell from 34% in 2021 to 31% in 2022, while 55% were financially coping and 15% were financially vulnerable.

However, credit union members are more financially resilient than other consumers. A 2023 FrederickPolls national voter poll found that credit union members are 1.5 times more likely than nonmembers to say they’re “very positive” their financial institution has improved their financial well-being.

The difference between members and nonmembers stems from credit unions’ consultative approach, consumer-friendly pricing, and thoughtful products and services, the research reports.

“People who are part of the credit union movement have chosen to make people’s financial lives better,” says America’s Credit Union CEO Jim Nussle. “Financial well-being for all is an investment in our future. By making ourselves an irreplaceable part of our members’ lives, we become the partner they rely on at every step of their financial lives.”

Improving consumers’ financial well-being doesn’t just benefit people and communities. Doing so boosts credit unions’ bottom line.

Financial well-being can provide a strong and defensible market position for credit unions, according to a quick start guide from Filene Research Institute and the National Credit Union Foundation.

The guide provides an action plan for how credit unions can put financial well-being for all into practice:

• Commit to improving the financial lives of people within their fields of membership.
• Assess your starting point and learn the demographics of your members and their financial challenges.
• Plan how to serve members’ needs by examining everything through members’ eyes and evaluating near- and long-term solutions for member financial health.
• Act, implement strategies, connect with the community, tell the financial well-being for all story, and continuously listen, learn, adjust, and improve.