How the pandemic could reshape credit unions’ presence in schools

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The new academic year for kindergarten through 12th grade will be anything but normal and that’s likely to have a significant impact on the financial education offerings credit unions provide to those students.

Credit unions across the country have long been a presence in schools, facilitating student-run branches and running financial literacy courses. Some states even mandate that youngsters receive some kind of formal financial education before they graduate high school. Recent data shows most young Americans are woefully lacking in financial literacy, and adults aren't in much better shape. Credit unions reach hundreds of thousands of students each academic year, according to data from the National Youth Involvement board.

The coronavirus has upended normal operations and many credit unions are scrambling to determine how they will move forward with financial education in the year ahead. The issue is compounded by the fact that in many states or school districts, exact procedures for the coming year still haven’t been finalized.

“One of the biggest fears is with the shutdown, all of a sudden the credit unions would be invisible through this,” said Karen Meyer, executive director of the Education Credit Union Council. “What [ECUC members] talked about over the summer … was how we can stay connected, and what we’ll continue to do is some of these virtual things and some hybrid of being in the classroom when they can.”

Core Federal Credit Union in East Syracuse, N.Y., has roots as an educators credit union, and has continued to focus on that market even though its field of membership has broadened beyond that. The $119 million-asset institution operates two student-run branches but works with schools in multiple districts, including providing in-person financial education offerings.

“Obviously we need to take our cue from the school district as to what their operating protocol is going to be,” said CEO Bill Sweeney. “That said, even with districts that have indicated they believe they have sufficient room in their buildings to have all students back in a socially distant manner, it won’t be business as usual.”

Even if schools are open for in-person education, he said, Core’s student-run branches are likely to be markedly different, including reduced student participation to allow for social distancing, and with similar safety protocols to Core’s full-service branches, including masks, hand sanitizer and Plexiglas shields.

Because the area Core FCU serves has seen a limited number of COVID-19 cases compared to other parts of the state, Sweeney said it is unlikely classes will be held exclusively online unless a significant outbreak develops later.

While Core staff can work with schools to provide financial education virtually, such as coursework on budgeting or responsible use of credit, Sweeney noted that many of the skills learned via student-run branches may not translate to a virtual format.

“Obviously the experience of someone running a cash drawer, balancing it at the end of the day and things like that, is a lot more difficult to do without the cash drawer," he said.

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Many states are dealing with the question of whether schools will open for in-person instruction at all this fall.

“It’s been difficult for families to plan on what you’re going to do because you just don’t know how things are going to change,” said Jessica Sharon, director of financial outreach at Pelican State Credit Union in Baton Rouge, La. Most of the 20 schools the credit union works with — including two with student-run branches — have pushed back their start dates until after Labor Day.

One of the challenges in Louisiana, noted Sharon, is that because such a substantial majority of the state’s population is below the poverty line — 18.6% in 2019, compared to a 2018 national average of 11.8% — schools and credit unions must overcome significant resource gaps in order to reach students outside of the classroom. Most of Pelican State’s instruction stopped once the pandemic shuttered schools in the spring because schools were struggling to get students the services they needed for day-to-day learning.

The Treasury Department and its Community Development Financial Institutions Fund consider significant portions of the state to be “persistent-poverty counties,” noted Sharon. Because of that, “you’re looking at a lot of individuals that don’t have internet or technology at home; maybe just a smart phone, but nothing they could do school work on,” she said. “So [during the spring] the school system really focused on paper packets and things like that.”

Sharon and others noted that with social distancing guidelines likely in place for the long haul, some schools may be less open to the idea of allowing credit union staffers inside once things get back to normal.

“That’s a concern for anybody that works with any school system right now, not just credit unions,” Sharon said. While Pelican State has a strong relationship with its school partners and “they see the value we bring to their students,” she added, virtual programming and other off-site activities may be a necessity for the foreseeable future.

“It really calls us to be innovative, but it also calls us to be better partners, because the better the relationship you have with the school, the more likely they are to let you in on some level,” she added.

A shift to virtual could be a boon, countered Vince Shorb, CEO of the National Financial Educators Council.

“It may actually save them time, so instead of having to drive to one school and interact and teach in one class, it saves them an hour of time so they can do this live [via] Zoom to reach more classes,” he said.

The pandemic may have permanently altered many aspects of daily life, from speeding up adoption of mobile banking to normalizing usage of grocery delivery and curbside take out at restaurants. Could a similar shift in financial education be coming as well?

Some sources for this story said that’s possible, but with limitations. For one thing, broadband access and the technology gap — an issue not just in Louisiana but nationwide — could slow efforts to widely shift these offerings online. And credit unions, having grown used to providing these offerings a certain way for so many years, may be hesitant to change gears unless absolutely necessary.

“People have short memories,” said Shorb. “Hopefully they do find a vaccine, but I think [after that happens] a lot of people will forget and go back to their daily lives. The people I’m talking to, they just want to get back.”

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