CLAREMONT, Calif.-With all the effort many credit unions are making to lower the average age of their membership, are they overlooking an opportunity with older adults?
Dr. Michael Steinberger, associate professor of economics at Pomona College here, suggested that in credit unions' rush to go after youth and their long-term relationships, "maybe the question credit unions should be asking is how do they increase their relevance with what will be the fastest-growing segment of the U.S. population-older America."
Steinberger, also dean of the Western CUNA Management School, noted the number of Americans age 85 and older will triple in the next 20 to 30 years. "The percentage of Americans 65 and over is going to go from 13% to 20% of the U.S. population."
To increase relevance with this segment, Steinberger suggested credit unions expand the types of loans they offer, recommending, for instance, creating special loans for medical needs. "Maybe credit unions allow members to use their Social Security as collateral? And what percentage of credit unions are doing reverse mortgages?"
The credit union, too, should position itself with older members as a place that offers believable, credible financial information and advice to help people with their financial decisions as they approach retirement, said Steinberger, a researcher at UCLA.
"If I am getting close to retirement, do I understand how Social Security is going to work? Do I understand how I need to be budgeting going forward? Credit unions are perfectly positioned to provide this information," he observed. "They have good relationships with their older members who hopefully know CUs are not in business to make big profits off them. If they can leverage the fact older members feel comfortable with the credit union, those members will turn to the credit union if they need a medical loan or something to supplement their retirement."
