Statistics on financial literacy are often discouraging. For example, FICO surveyed U.S. bank customers and found only 30 percent got a passing grade on questions about their own financial rights. Younger people were less informed than the older generations. Those who were satisfied with their current financial institutions also answered better than those who weren't.
"The study showed a correlation between financial literacy and better customer engagement, more use of bank services and decreased likelihood to switch banks," Anthony Sprauve, senior consumer credit specialist at FICO, said in a release.
On the occasion of International Credit Union Day, National Credit Union Foundation Executive Director Gigi Hyland wrote on the kinds of services credit unions can provide to their communities.
"Local service can mean so many things for credit unions," Hyland wrote. "It includes affordable, appropriate financial products and services for members. It includes community leadership, collaboration, stewardship and charitable giving. It includes educating members and communities about financial issues."
She believes credit unions have the potential to become hubs of financial literacy for their members and others. Part of this vision is for credit unions to occupy such a trusted place in the national consciousness that they become consumers' first choice financial institutions.
The FICO study suggests any effort to engage members may help their financial literacy, as better scores on the questions were associated with higher levels of engagement. It could also be a correlation in the other direction, in which better financial literacy leads to more engagement with financial institutions.
Credit union leaders should consider what their current efforts to increase financial literacy among members are. What feedback have members given about these programs or resources? What is a clear and pressing need that isn't being addressed? Answering these questions can point credit unions in the direction of becoming valuable sources of information on financial literacy for all their members.