by: Matt Rookard, president & CEO of the Louisiana Credit Union League
NEW ORLEANS — Many experts think that the U.S. is heading toward a recession. With the upward pressure on fuel prices, consumers are being squeezed at the pump, at the grocery store and beyond. Sixty-four percent of households are living paycheck to paycheck, according to a recent LeadingClub report. Those families are the hardest hit when rapid inflation takes place.
Louisiana residents are even more likely to be struggling during this economic downturn. With the second-highest poverty rate in the U.S. (18.5%), communities throughout the state are trying to identify ways to reduce their daily burden.
Credit unions are poised to provide a hand up. In fact, providing for members during tough times is embedded in the DNA of credit unions. The history of credit unions dates back to the early 1900s, when many citizens were not considered “bankable.” To solve for this, credit unions were formed by communities to serve communities. “Not for profit, not for charity, but for service” has been the guiding principle since those early days.
What does that mean for consumers?
First and foremost is ownership. A credit union is owned by its members. In addition to being a nonprofit, credit union operations are set up to benefit you as a member. Whether it be dividend payments, rewards programs or lower rates on loans, credit unions revolve around your interest, not the interests of private shareholders. In fact, the Credit Union National Association (CUNA) reported that over $12 billion in benefits were passed along to credit union members in 2021 alone.
Second is the focus on the financial well-being of their members. Credit unions are not built to sell you products. They are built to help you succeed financially. Many do this through Certified Credit Union Counselors (CCUFC) who provide no-cost financial guidance. By creating a solid foundation, long-term membership at a credit union can be a powerful tool in setting you and your family up for financial success.
Last, is the availability of credit union staff. Imagine if your finances started spiraling downward, perhaps because of a job loss or, like today, rapid inflation. Now imagine being able to visit with your mortgage holder to discuss ways to navigate the process. It sure beats calling 1-800 numbers and “self-servicing” your call through a directory. Many credit unions will proactively create programs, such as a “Skip-A-Payment” option where members can miss a payment without damaging their credit score. And most are open to modifying loans, budgeting or finding other ways to help you navigate your issue.
Whether you’re working with your local credit union, a small community bank, or even a large financial institution, it is crucial to be proactive in managing your finances. Any time your financial situation changes, and you realize you need help, reach out to your financial services provider(s) as soon as possible to discuss your individual circumstances and possible solutions. Credit unions, especially, will offer a financial “life preserver” and point you towards safer waters.
Credit unions were built for times like this.
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