When's the last time you considered a credit union for your banking or loan needs?
Perhaps the better question is: When's the last time you truly felt like your bank had your back?
After the financial crisis and subsequent economic downturn of the last several years, consumers and businesses alike have struggled to adjust to the new normal. Furthermore, According to the 2015 Edelman Trust Barometer, public levels of trust in business are at its lowest since 2008. Which basically means that the aftermath of the recession, and all of its various fear-inducing facets, still lingers.
It would make sense, then, that organizations would be best served to focus on enhancing their "net positive contributions" to society in order to earn the trust of consumers. While big brands seem to do this fairly well, as established Corporate Social Responsibility programs assume a significant amount of time and focus (and are often attached to government and public affairs initiatives), the financial services sector has seemingly struggled to make the necessary shift toward a "pro-consumer" mindset.
In other words, people (and businesses) aren't completely convinced that their money is safe or that the industry itself is doing everything in its power to protect and provide services which put people - not profit - first.
Enter CO-OP Financial Services: a financial technology company that supports 3,500 credit unions and 60 million members by providing a cutting-edge suite of customizable tools and services.
Last week, the organization announced "CO-OP Purpose", an initiative that combines social mission with innovation. Samantha Paxson, CO-OP's Chief Marketing Officer, sums it up nicely:
"The program extends our commitment to 'people helping people' and includes financial literacy education outreach, philanthropic and charitable giving, new ways of collaborating with colleagues and consumers, and access to research on the business case for corporate social responsibility."
This certainly doesn't sound like the status quo for the financial services industry.
Intrigued by the news, as a business owner and consumer, I wanted to understand more about the actual function of credit unions (financial institutions owned and operated by members as a financial cooperative) and how something like "Purpose" would actually have impact. In other words, could CO-OP put it's money where its mouth is? So I reached out to Paxson and dug a little deeper.
And let's just say that credit unions are no longer off my radar. Here's why:
#1 - Member based
All account holders are members, with collective total assets used for banking purposes. Credit unions are not-for-profit entities, meaning that their purpose is to service the best interests of membership rather than maximize profit margins.
#2 - Easily accessible, benefit rich
There are 57,000 credit unions around the world, including 6,400 in the United States. Many of these credit unions belong to ATM and branch networks and share their resources (something that banks don't do), which allows easy access to ATM usage without fees, and enables visits to thousands of participating credit union branches as if the member was right at home.
#3 - Lower rates and fees
In general, credit unions are known for their lower loan rates, lower fees, even greater access to free checking (offered by 70% of credit unions). This will vary from credit union to credit union, but the very nature of the credit union as a not-for-profit organization with members positions it as a better pro-consumer choice. Need more reasons to check out credit unions? In a recent Consumer Reports survey, customers give credit unions a 93% "highly satisfied" rating compared to 69% for the four major banks.
#4 - Viable financing option
Credit unions offer much more than simply depositing your paycheck and collecting interest. You can take out a loan to finance a car, home or other item through a credit union. Even if the credit union is not your primary financial institution, it can still be an option for your lending and financing needs. Credit unions are about ensuring you get in the best possible loan to ensure you don't get deeply into debt or financial hardship. They are not about selling you into the highest rate so they make money.
It's our job, as consumers and business owners, to educate ourselves about the best options when it comes to our finances. That being said, this is a much easier task when our financial future is in the hands of those who seemingly have our best interest in mind, not simply their own.
I applaud CO-OP for leading the charge and galvanizing credit unions to amp up their social mission focus; and I would likewise argue that providing services that prioritize people is Purpose enough for me.