With Valentine’s Day over, it’s time to look at the flip side of love and marriage.
More than 827,000 marriages ended in divorce or annulment in 2016, according to the National Center for Health Statistics, and while the overall divorce rate has been falling since the early 1990s, so too has the number of marriages.
And at least one veteran credit union marketer believes CUs are making a mistake by not making themselves a part of that difficult and expensive process.
Paul Lucas, a marketing and branding consultant for credit unions, noted he has worked with a large number of community CUs, and many provide “lifestyle loans” for consumers, “But I have never seen a divorce loan.”
“People need them,” Lucas asserted. “There are 40-some categories under lifestyle loans, from dentists to funerals, but not divorce. Divorce is expensive and people need help.”
While some might say a member could just get a personal loan rather than a loan specifically earmarked for divorce, Lucas countered if a CU does not tell people about the many different kinds of loans it offers, consumers might not make the association.
“I know of a credit union that had boat loans, but it didn’t tell people it had boat loans,” Lucas recalled. “When it announced it offered boat loans, it suddenly got 20 boat loans in just a couple months.”
Helping hand in troubled times
Even if they aren’t offering loans, some credit unions are making strides to involve themselves in the messy process of divorce and assist members where they can. Several CUs have dedicated pages on their websites offering assistance to members dealing with the dissolution of marriage.
One example is LUSO Federal Credit Union, a $222 million-asset institution based in Ludlow, Mass., which
According to President and CEO Jennifer Calheno, approximately 100 people contact LUSO FCU each year seeking financial advice and assistance when going through a divorce.
“During and after the divorce process, we assess their debt and provide them with effective solutions or loans to keep their credit score up and regain control of their finances,” Calheno explained. That can include everything from helping to refinance a spouse out of a mortgage, providing advice on getting out of credit card debt, offering products to help members get started on their own financially and more.
“Oftentimes, we get referrals from members who have gone through a divorce and worked with us to refinance their home and protect their credit score,” she said.
Prospera Credit Union, a $262 million-asset institution based in Appleton, Wis., utilizes LIFEstage,
“We find out where they are so we send them the correct marketing,” Patchak said, noting that part of the goal is to avoid sending retirees information on student loans, for example. “For those going through divorce we give them a transition checklist. It helps them with determining their plans for the future, the status of their auto, home, insurance, transportation, updating beneficiaries.”
And, she said, Prospera has trained its MSRs to guide members through a checklist of topics they may encounter as they unwind their formerly conjoined finances.
“When you get divorced you don’t think about having to take your spouse off your 401(k), how to do your taxes by yourself, how to remove a co-borrower from a loans and how to separate joint accounts,” she said. “We give them things to think about that they might not think about.”
Baxter Credit Union, a $3.4 billion-asset institution based in Vernon Hills, Ill., also has a
Jim Block, senior vice president of lending, said BCU does not track the number of members who ask for assistance specifically with divorce, but in addition to webpages with financial advice for different life stages and goals, the credit union’s collections team has tools to help people in that situation, including offering extensions on loans.
“If members reach out to us with any financial need, we try to help them,” Block said. “Sometimes it is divorce, sometimes it is a death in the family, sometimes it is the loss of their job. That is our job – to help them.”
Lucas echoed that sentiment.
The No. 1 job of a credit union, he said, is to lend money – which makes helping members in their time of need a natural fit.
“Credit unions need to be the place people go to for loans – any kind of loan,” he said. “So credit unions should always offer any type of loan they can because you want people to think of you. There are some credit union CEOs that will not offer a Christmas loan, because they say they don’t want people to go into debt. Well, people are going to go somewhere else for that loan, and you just turned someone from your member to a member somewhere else.”
