Think the average consumer knows all about credit unions?
No one left with that impression after a group of a half-dozen consumers formed a panel during CUNA's Future Forum and shared what they "knew" about credit unions with an audience made up of CU management and board members.
Moderated by Patrick Adams, executive VP with St. Louis Community Credit Union, the group of consumers made it clear credit unions have plenty of work to do in the awareness game. The participants included Rosa Garza (active in Reno's Hispanic community), Jesus Gutierez (a restaurant owner), Myong Kim, a student who moved to the U.S. from Korea, Nathan Simonson and Angelica Guzman, both grad students at the University of Nevada-Reno.
Below is a look at some of the questions posed by Adams and audience members, and how the panel responded ot included in the responses below is one theme expressed by all that won't surprise most CUs: The panelists wanted everything for free.
Q: In your own words, what is a credit union? How much to you know?
Garza: It's an association of people bound by a common employer or union.
Kim: I understand the not for profit, but in my mind, I don't really get it. In my own words I would say a credit union is a community-based financial institution.
Guzman: As a college student I don't know much about credit unions. My parents never belonged to a credit union, so I don't. I've moved around and I never knew that credit unions were available. I've stuck with the bigger banks.
Gutierez: I think credit unions are great for the community here. One thing I learned is that in looking at the small businesses is that (banks) require so many things from the small business owner. They first ask, 'How long you in business?' If it's six months or a year, then they're not sure if you going to make it. I think credit unions need to look at that.
Simonson: My experience is that I just took out my first car loan with a local credit union. I know I have better rates, I'm a member. It's almost like I'm a shareholder in the organization. My information came from looking around and shopping for loans and then coming to the credit union. They beat most of the larger banks. One of the things that drives me away is lots of fees.
Q: Do you understand not for profit?
Kim: I do not see the direct benefit. I understand the money is pooled and it eventually comes back to the members, but I do not see the direct benefit on my account.
Garza: Not for profit to me means that the money stays in the organization. To me it means the lowest-possible loan rates.
Guzman: Like everyone else when I hear nonprofit it means to me the profits go back to the people. I would have to understand other financial institutions and where the profit goes and how it works.
Q: What is the most important product or service a credit union can offer to the Hispanic community?
Garza: The most popular product is the car loan owadays we know the credit unions offer a wide variety of services. There's probably a need for a little more advertising about that from the credit unions. The Hispanic community only thinks about the car loan. If they do not get it they don't think about opening up an account with the credit union.
Q: How important are transfer services?
Garza: There is a lot of competition on that product already. But that can be a way to bring the community in. If you're able to bring them in for that transaction, that's the time the credit union needs to take the opportunity to inform people about the services they offer.
Q: Who influences you in choosing a financial institution?
Simonson: That would be stories I hear from peers or teachers, or anyone whom I respect-as opposed to my buddies or my friends.
Kim: I agree. As much as you think as a consumer that you shop around, actually the answer is no. Basically, we rely a lot upon word of mouth. That's how I choose my primary financial institution. I had no information about what the financial system in America was like. I heard that the bank had a low wire transfer fee, but later on I found out that information was not true. I told other people that it wasn't true. But many people believe it to be true, because they not have time to research if it is true. My family is from Korea. And I know that if I was there I would choose the bank my parents would choose.
Guzman: My elders influence me. But another big influence is that there is one big bank that has all the ATMs at our university. I'm just prone to use that just out of convenience. But the Internet is also very important in my age group. If I'm looking for a loan the first thing I would do is jump on the Internet. And I would probably go to the (website of the) big financial institutions that have commercials on five times per day. But I don't hear much from the credit unions. I have direct deposit and pay bills online, so I don't go into bank much.
Q: How safe are credit unions? Does the fact credit unions are NCUA-insured mean anything to you?
Garza: It's important to know your money is secure. It's important to know FDIC insurance is there.
Kim: I have heard of NCUA. It is important to know your money is safe. But to me the most important thing is that in having the relationship with the credit union you really feel safe. That is something that credit union can focus on and advertise. I don't see much advertising, but I'd like to see more.
Simonson: I didn't know anything about NCUA. I was aware of FDIC.
Q: What matters most to you?
Gutierez: Trust. You want to know where you can do business in the future. What matters most to me (as a business owner) is cash transaction services.
Q: Why do business owners quit an institution?
Gutierez: I quit one bank because of the things we're talking about right here. Cash transactions, customer services. They don't transfer cash when you need it. I think credit unions are faster at that. That's what I am looking for.
Guzman: Often times you start an account and you're told there's no fee, and then there's a fee. If they don't fix that, I leave.
Q: What matters most in financial services?
Kim: Providing information. When immigrants arrive they don't know anything about financial institutions in America, and they are vulnerable. They have a language barrier, as I did when I arrived six or seven years ago. Use seminars or other education on what the credit union can do for someone. If I could give you a suggestion, every year the ethnic groups hold meetings-reach those leaders of those organizations and their meetings.
Q: Tell us about the immigrant-new American market?
Garza: The first generation is very dependent upon you for advice. They believe in you. The second generation has a lot more questions about their money. And often they may not speak Spanish all that well.
Kim: I think many of the same characteristics are shared by the Asian community. The Asian community is very collective and they believe in doing things together as a community. To me that really works well with the people-helping-people philosophy of credit unions.
