Holly Fearing
Hello everyone and welcome to the Filene Fill-In. I'm Holly Fearing with Filene. The Filene Fill-In is the podcast where we fill you in on what's been going on here at Filene's home base and out and about in the financial services world. Today's conversation is about financial well-being. Well, actually, to be more specific, financial well-being for all. Before we get into it and the resources, strategies, and subject matter experts that we have for you today around how to advance financial well-being as a strategy at your organization, I want to share some data about why. Why this is so important and why we're talking about this. We believe that everyone should have the opportunity to thrive financially, but data shows that many people don't have that opportunity. More and more people across the income spectrum face hurdles in building financial stability and security. The financial lives and livelihoods of consumers, both credit union employees and members, have changed over the past decade and for a substantial portion of households, day to day financial struggles remain profound in the face of persistent financial fragility and inequity. According to the Financial Health Network's U.S. Financial Health Pulse, two out of three Americans are not financially healthy and stark disparities remain across gender, race, ethnicity, and income. Over 60% of credit union members are struggling financially, as well as more than 60% of credit union employees. The majority of struggling households lack access to effective daily financial systems, find it challenging to weather financial shocks due to limited liquid savings and credit options and are not well positioned to pursue long-term financial goals.
Over 60% of credit union members are struggling financially, as well as more than 60% of credit union employees.
This is not new information, and it is frustrating to feel like this persistent problem will only continue to persist or worsen in today's social, economic and political environment. But there are things that credit unions can do and are doing to make a difference in people's lives, one member at a time. If you don't believe me, ask any credit union about it, I'd be willing to bet that every one of the nearly 5,500 credit unions in this country have hundreds or thousands of examples of how they help their members thrive. This isn't work that we can be passive about, nor is it work that we can count on others to do. It is the work to be done by credit unions and it is to be done right now. Follow along with this interview by downloading the guide we reference at filene.org/557. There are several themes that will emerge when credit unions start to think more creatively about who they are not yet serving and how they can serve them, interesting things begin to happen. Let's get to it.
(3:00) Okay, everyone. Thanks for joining us. So recently, Filene and the Foundation collaborated on a resource for credit unions, demonstrating the power of a people first strategy in helping to solve many of the common challenges they face around sustainability, growth, talent acquisition, and retention, just to name a few. It's very apparent today that people want to and even need to feel financially secure and know that they're on a path to financial health and well-being. Putting this consumer sentiment at the center of credit union decision making and product service delivery, not only supports a credit union's business goals and mission around advancing financial health and well-being through responsible lending products, higher savings rates and financial education, but it also helps credit unions navigate supercharged digital transformation in a financial industry where fintechs have completely changed the competitive landscape. Credit unions no longer own an obvious advantage on service or relationship banking. So, what's a credit union to do? That's why for today's podcast, I've brought on Michelle Christie, Senior Manager, Financial Inclusion and Impact, at the National Credit Union Foundation. She brings a wealth of knowledge and boots on the ground, tangible experience on how credit unions are and continue to advance financial well-being for all whom they serve. Thank you and welcome to the podcast, Michelle.
Michelle Christie
(04:34): Thank you, Holly. Thanks for letting me be here with you.
HF
(04:36): Yeah, of course. So let's start at the start. I want to make sure that we're operating under a common understanding of the term and not just repeating it without thinking about what it really means. So tell us what does financial well-being mean?
MC
(04:53): I'm so glad you asked that because you may have heard a couple different things, right? That it's what you do with your money, how you feel about your money. Some people may have misused terms like financial literacy is the same thing as financial well-being. Well, you know, all of that is true, but the important part here is that financial well-being for all means, yes, what do I do? How do I feel about my money, but also being inclusive of the people and that's all people, right? So regardless of your income level, your neighborhood, perhaps even just demographics, right? Age, what have you, all of that is financial well-being for all and those terms like financial literacy, financial education, inclusion, those are all a part of financial well-being.
HF
(05:36): Okay, great. So I understand that. Now tell us more about why is it so important and what happens to individuals and communities when they lack financial well-being?
MC
(05:47): Awesome. So I'll start with this and kind of like an example. So for instance, if someone's misunderstood about the difference between debit and credit, that's more of a financial literacy topic, but that may impact what they do with their money. And in the same respect, if that person doesn't know the impacts of core credit practices, like financial education topics, that may impact how they feel about their money over time and their financial well-being is affected negatively because of those choices, because of those practices, because those parts are not in place. But of course, in intervening with education and literacy, empowerment, that all helps guide people to do good and feel good about their money, ultimately bringing them to a positive financial well-being.
HF
(05:47): Awesome. So clearly, you know a lot about this topic. I'd love for our listeners to learn a little bit more about you before we go too deep into this topic. So can you tell us a little bit about where did you gain your passion for helping people gain financial independence and just a little bit more about your expertise in helping credit unions make impact through their work?
MC
(06:54): Sure. So I actually gained my passion for helping people to gain that independence while teaching in the health industry. So at the time I was teaching physical and nutrition classes to a group of older adults, and this stands out pretty prominently because this what shifted my change from health to financial health. And this was actually in my own neighborhood where people shared that they were not able to make better decisions on their diets or what have you, because of their finances and I thought, well, how can I teach health without having that financial health aspect in the conversation? So I started working at a credit union that allowed me to share that message of financial wellness with communities across the state and by doing so day after day, I could see the lives and honestly, generations change over time because they now had the education. They have the tools and resources to make those better financial decisions, which I knew from the background, would ultimately help shift or make a change for the better, in other elements of their health, be it, you know, physical, mental nutrition, those sorts of things. And I learned with all of that, that regardless of the issue, you know, oftentimes it's going to involve money. It's gonna involve your dollars and your cents. So having that experience really did help.
HF
(08:10): Yeah, that's really interesting cause I know Filene does research on this. Many organizations have seen that there is a really strong connection between physical health and financial health and so it's really interesting that you kind of experience that in the practice of both physical health and financial health issues.
MC
(08:30): Absolutely, that connectivity, I think will show itself more over time, especially in the recent few years where, or even now, right? Making the choices between getting to work, going to work and gas prices soaring, those sorts of things, that can really change the household, change the impact in the household for people for a long time.
HF
(08:50): Yeah, absolutely. Okay. So let's talk about the opportunity here for credit unions. So what really are the opportunities to be had for credit unions that focus on advancing their members' financial well-being?
MC
(09:07): Goodness, there's so many opportunities! I think just building relationships with your member, right? Getting back to your mission, I think is an opportunity every single day. But when you build those relationships with either your members and potentially the people who are not yet your members, you're able to improve their financial well-being. And again, I've shared that story about how it can impact generations, but also starting kind of with your employees, that's a huge opportunity. Whether you have a small team or a team of maybe thousands, you have that opportunity as a credit union to support them by education, other programs that you can start. Perhaps being really creative, I think is a big opportunity that people kind of overlook, right? Well, we've always done it this way. Well, could we introduce financial well-being in a new way. Or we've always had these products. Well, could we get creative in how we can serve either the underserved or better serve the people or members that we already are supporting.
HF
(10:10): I love that you mentioned starting with employees. I think that's so essential to be able to serve a member's well-being, you really do need to focus on that your employees first, have financial well-being and that is definitely something that's within the, you know, we talk about zone of control and it's absolutely within the zone of control of a credit union to first ensure that there's financial well-being available to their own employees. I feel like that might be overlooked sometimes when credit unions are looking at how can we help our members? Oftentimes employees are our members and can be where they're wearing their member hat too. So do you feel like that's overlooked or are there other things that might be overlooked by credit unions when it comes to thinking about financial well-being?
MC
(10:10): Sure. So of course, right, creating a business plan strategy, thinking how can we expand that expansion should include that of your employees financial wellness, but also when it comes to your members, who are you not serving? That is a huge opportunity to think about. You know, have you looked at the demographics in your area or are we kind of staying in the same, staying complacent if I may, of who we're serving, where we're serving? Because at the end of the day, it's the why that matters. Why are we serving? And just kind of going back to the employees is that, you know, those are the frontline people who are assisting the member day after day, to achieve their financial goals or their financial well-being. So by tending to them, they can then empower themselves, empower the member and back to bringing that to a business strategy, then that's really ultimately helping the credit union's goals as well.
HF
(10:10): Of course. So what have you seen that has worked really well with a credit union in this effort?
MC
(10:10): Sure. Just to start, I've seen that those personal financial wellness assessments work really well, and that's really just the tip of the iceberg. And I think what comes as a surprise is that when, you know, executives or employees or your member takes that assessment, whether you're using the CFPB scale or Financial Health Score, knowing where you are today is what kind of jump starts that work. And I think it jump starts that for the credit union to say, perhaps I didn't know, right? Perhaps I thought it was just the underserved that we were serving and that kind of gets you to realize, we all need the support. We all need to tend to our financial wellness and well-being over time. So I think that can work really well, but also, and just a plug, at the National Credit Union Foundation, we just started a grant, Start at Home grant that happens to support employees. So doing that, that works really well.
(13:06): We've already just mentioned, but to go a little further is financial counseling. So that's that one-on-one counseling with members or with employees to encourage your folks to improve their financial well-being overall. So that's super helpful. I think one that or one, you know, thing that works really well is when your CEO or your C-suite makes financial well-being for all their mission. We've heard stories at even CU FinHealth recently, the conference, about how to make that a business strategy, how to include that in your products, your services, your programs, everything that you do really, and that can really move the needle. What works also of course, is just knowing who you serve, right? Determine the areas of opportunity to serve, whether it's connecting with local organizations and training them, educating them, educating the people that they serve as well. And maybe those are in some of those underserved targets that you can meet members where they are and where they're most comfortable as well. I've seen that work time and time again, and oftentimes create some of the strongest relationships between member and credit union because they know they, the member, knows that the credit union's going be there for them. It's going to meet them where they are. It's going to be creative in their decisions and help them assess that today and where they'd like to be tomorrow.
HF
(14:36): That makes me think about results and impact. A credit union is of course, a business after all and is responsible to their board of directors and to be fiscally sound with their members' finances. So, what have you seen be the potential for results or even impact amongst a credit unions member base or their community at large when they focus on financial well-being?
MC
(15:05): Absolutely. If I may just kind of shout out a few credit unions who are doing really well in this work. SchoolsFirst just empowering their employees to support members by lending with their heart to make some loan decisions, that can go such a long way. When we practice financial well-being for all, where really should be practicing inclusion and how do we do that? I think Black Hills Federal Credit Union also, you know an Herb Wegner award winner and their engagement with the population in their area. Fantastic. Oftentimes I would also say that with the underserved or overlooked, there's one that stands out so significant to me and that's with Royal Credit Union's Financial Education Program. What's special about them and this program is that they're actually helping incarcerated individuals. You'll see more programs like this pop up day in and day out because we're all members of the community. Another one, Pelican, I think they're focusing on their least engaged members. And I think that's super special because most financial institutions, be it credit union or bank, are not going to focus on the least engaged members. They're not going to look at or look deeply into the risky members, but that is where a lot of the support can be had, where a lot of the change can be made. And if you're talking business cases and impact, how better to tell that story than with your least engaged members becoming some of your most engaged.
HF
(16:33): Yeah, that's wonderful. So I was gonna ask you about your favorite real life, examples of credit unions that are making a difference in the financial lives of those that they serve. So you named a few there, those are really great examples. Are there any other examples that you have that you wanted to share?
MC
(16:50): Yeah, I mean there's always the personal ones and to be fair, I see this happen everyday and I can only imagine what credit union employees are actually seeing and hearing everyday. But I do have, I can think of one or two examples of my favorites and this is a personal one, but going into a high school regularly to share financial education, financial literacy courses, and one young lady just after maybe a few courses coming up to me and saying, "hey, my mom got our first car and we're going get our first house." And these are the stories that happen in just about every credit union, I certainly hope so, in every branch, but when you can see and hear that and watch over time, how people grow, how generations can change in real life. That is what I mean. I think that sometimes credit unions will focus in one area or another and say, well, adults are the ones making the decisions in regards to loans, or they can sign on those dotted lines and not just credit unions, banks as well. But what about the youth? And, you know, we know that some credit unions have so much involvement and engagement with the, you know, credit unions that they start at the schools or going back to the schools. The key for me is that people learn those credit habits, their financial habits, what have you, by what they see and that's at a really early age. So hearing that story or being a part of that story actually is one that stands out.
(18:23): Another real life example from a credit union, just making a difference, is with philanthropic efforts and we do our best to be strategic in those efforts. But one example that I can think of for sure is same credit union that I used to work with would raise money for non-profit organizations and charities monthly. One month we decided to connect with American Cancer Society and the money that was raised instead of just like general funds and you know that, the check presentation, was actually used to fund a room for not only the patient, but their caregiver as well, so that they don't have to think about how they're going to pay for their stay while also seeking treatment. And that room is funded for a year, not necessarily just for one person or one patient, but it's whoever needs that support over time. So could we continue to do that? Can we continue to find ways to be impactful and genuine and learn the stories of how we're making the impact with, you know, those who we connect within the community, be it philanthropic or not? Absolutely. But it's going to take, it's going take just that, right? Some care, some effort and continuing to see that the mission really does make a movement.
HF
(19:38): Yeah, I love that and that's another example of being really creative with the approach and understanding what members need and not assuming what they need. I love that example. So I wanted to ask next about the people that might not see the value as clearly as you do and the examples that you've seen and lived through. Is there anything that you wish to tell credit unions that might not see the true value of putting the notion of financial well-being at the center of every decision and product and service that they offer?
MC
(20:15): I tell credit unions to look at the progress of their peers who have actually done the work. I tell credit unions to ask their employees on the questions that are being asked of them by members, how they're supporting members and where they see opportunity as well. Perhaps it's not just the frontline folks, but also coming from the top down because CEOs really have the power to lead the change, whether it's in financial well-being, financial inclusion, and again, staying true to that credit union difference. So I'd ask those credit unions, how do you stay true to that difference? And how do you know that your efforts are making an impact in those you serve and those you hope to serve?
HF
(20:15): Yeah, that's very well said. And I think that, you know, before we wrap up, I want to just hit this home for our listeners and just, if you could recap, what's the biggest opportunity for credit unions that focus on financial well-being and what's maybe a big challenge that they should be aware of that they may face in the work.
MC
(21:26): So I think the biggest opportunity is to create a symbiotic relationship between their member and the credit union as a whole. And that's by building relationships and improving the financial well-being of their communities overall. That's a huge opportunity to improve the financial well-being of their employees, of other organizations and again, increasing their membership. But from the business perspective, again, assessing where they are today, implementing that, acting upon implementing those financial well-being for all practices and making it their mission to see maybe perhaps in 10 years where they are, or in five years. Create that plan, your opportunity is to create the plan for sure.
I think the biggest challenge is that your leadership has to be on board and that includes your board, right? So this work is gonna require strategy and alignment or realignment, and also just measuring those outcomes, but assessing your members as well. And these are not things that happen overnight, right? Training and empowering your employees, that does not happen overnight, but it does move the needle, but it won't unless you start now. So I think the challenge is starting now and just going for it. Just going for it because there's so much opportunity that can be had
HF
(22:48): I know you mentioned a few examples earlier, but I wanted to remind our listeners of a couple of organizations that are kind of the shining stars in this work. So who do you think is kind of doing the best at this work right now?
MC
(23:06): The best, I'll say the ones who are doing a fantastic job, because there's so many standouts and I would include SchoolsFirst in that standout crowd, as far as empowering their employees to support members with lending decisions. I would say Royal Credit Union with their helping incarcerated individuals. That is huge. That's something that's not regularly being done. I think when it comes to engagement, going into the areas that you may not be known or going into the areas that is not regularly served by a credit union at all, and bringing your name to that with. Black Hills Federal Credit Union, Pelican State has done wonders. I can think of a couple more, of course, you know, Patelco and their journey for the last few years on just focusing on financial wellness. Quite a few, quite a few.
HF
(23:57): Yeah, that's a good problem to have. I think it's great that credit unions have a lot of examples to go to. So what advice do you have for credit unions that want to advance the work that they're doing around member financial well-being for all, even just taking it up the next step in their journey, what advice do you have for those credit unions?
MC
(24:24): I would advise credit unions big or small, regardless of asset size, to check out the quick start guide by Filene and of course the National Credit Union Foundation. You're going to find, not only just tips and resources, but examples and a true guideline on just how to commit to the mission and how to commit to financial well-being for all, as well as really important parts of assessing and learning your membership. Assessing and learning how to implement this and plan as well, but ultimately to act on financial well-being for all.
HF
(24:24): Awesome, that's so great. And yes, you mentioned the guide a couple of times, so we will absolutely share that guide in the show notes and I'll include a link along with the podcast so people can get access to that. But I know that is a kind of a special report that Filene and the Foundation did together. So that is open and accessible to every credit union, so definitely go out and download that, and it's not too long. So you can take a quick lunch break and read through the whole thing and I think it could actually make a really outsized impact on this effort, so really I appreciate the Foundation and their work that they did with Filene in making that happen. Is there anything else that you want our listeners to know or anything else that you want to recommend about the guide before we wrap here?
MC
(25:59): As far as the guide, I mean really comb through it and it's free. So share that with your team, share that with your employees, share that with your community and fellow credit unions who may be interested in doing this work, and you may find opportunities for partnership or collaboration and innovation as well. So there's a lot that can come of that.
HF
(25:59): Awesome. Well, thank you so much, Michelle. You've said a lot here for our listeners to think about and a lot of tangible ideas for them to process. So I really appreciate your deep dive in just what really is financial well-being and the discussion we've had today here, I think helped move the needle forward for our own understanding of the importance of this work. So thank you so much.
MC
(26:48): Thank you, Holly.
HF
(26:52): All right, that's it for the Fill-In folks. Thank you for listening. And of course, a huge thank you to Michelle for taking the time to talk with us today and thank you to the National Credit Union Foundation in their partnership, in creating the Financial Well-being For All Guide that can be downloaded for free at Filene.org/557. If your organization is already super charging your strategies and decisions around the principles of financial well-being for all, you can level up to your entire community and be a standout in creating community level wellness. On August 1st and 2nd Filene is holding an in-person and virtual research event, which brings together the insights and experts from our Research Centers for Community Social Impact, Data Analytics and Emerging Technology. Credit unions seeking to demonstrate the credit union difference while growing their impact and bottom line will benefit from hearing our keynote session with Filene Fellow Dr. Mai Nguyen. In it, she will draw on insights from human-centered design and community development to explore how credit unions can turn their community connections into a marketplace differentiator and a balance sheet superpower. Head to Filene.org/events to register. I hope you know that as a Filene member, these events are part of your benefits and you should take advantage of that by attending and sending your team. If you're not yet a Filene member, well you'll want to email us at [email protected] to learn why you might want to change that ASAP. Before we go, I want to give a shout out to the sponsors of our Center of Excellence for Consumer Financial Lives in Transition, BCU, Cuna Mutual Group, DCU, and PSCU. They make some of our most essential research possible. If you like this episode, please do rate us on Apple Podcasts so more people can find us and make sure you are subscribed to the Filene Fill-In podcast so you can keep up with what's going on at Filene. You'll find us on Apple Podcasts, Stitcher, SoundCloud, Google Podcasts, or wherever you get your podcasts. To get in touch about today's show, email me at [email protected], or find us on Twitter @fileneresearch. Until next time. Thanks everyone.