What Keeps Credit Unions from Teaching Money Skills

Barriers to Financial Education

Part V of CUNA's Financial Literacy Task Force 2007 Survey of Credit Unions' Financial Literacy Activities

Of course there are legitimate reasons why credit unions don't have formal financial education programs for their members. In often boils down to staff resources, time, and no money. Credit union operating margins are shrinking, so it is not surprising that many say they have neither the time nor the money to provide this service to members.

But credit unions have to ask themselves whether not helping members manage their money is a good move at a time when members may need the help more than ever before.

Reasons for providing programs

Fig. 1

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If a credit union wants to become a member's primary financial institution, it needs to do more than provide convenient transaction services. Becoming a trusted resource for financial education will build a stronger financial relationship with members and that is the primary reason credit unions spend their resources on financial literacy.

In addition, credit unions see their programs helping reduce members' financial problems. And finally, credit unions believe these activities are "the right then to do" for their members (Fig. 1).

Fig. 2

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It is interesting to note that credit unions with assets of $10 million to $20 million are more likely than any other asset group to offer financial education to reduce members' other financial challenges.

Beyond this, however, there are no market segments that stand out as being noticeably more (or less) likely to provide financial education for any given reason.

Barriers to providing or investing more

Regardless of whether a credit union offers adult financial education or youth financial education, the biggest reason for not offering a program is the inability to devote sufficient staff time to such programs.

Fig. 3

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Additionally, there are a number of credit unions that believe their adult members are not very interested in personal finance (Figs. 2 and 3).

Smaller credit unions ($10 million to $50 million) are more likely to cite insufficient staff expertise as the main reason why they do not offer a financial literacy program.

Next: Strategic Plans for Financial Literacy