In a Nutshell: The National Credit Union Foundation helps credit unions leverage their not-for-profit status to encourage financial well-being and energize communities across the U.S. Its mission aligns with the legislative and advocacy role of the Credit Union National Association (CUNA), its partner organization. CUNA and the Foundation work together to strengthen credit unions as community builders and help millions of credit union members reach their personal financial goals.
Financial services are essential for growing the economy and helping consumers and businesses reach their goals. But not all financial institutions have the same interests.
Banks are for-profit institutions charged with delivering a return to investors. Credit unions, on the other hand, are organized as not-for-profit financial cooperatives.
Credit unions are member-owned, so when they earn more than they need to operate, they reinvest it in its members and communities. Returns may take the form of lower fees and loan rates, higher savings rates, and charitable and volunteer support.
Credit unions operate under cooperative principles and expand their membership bases to provide more benefits to their communities.
The first credit unions were chartered in the early 1900s to serve populations that were overlooked by traditional financial services providers.
Ever since, workers, small businesses, and members of underserved groups have turned to credit unions to gain better access to financial resources.
The Credit Union National Association (CUNA) advocates for credit unions in the U.S., It promotes legislation and regulations that protect and extend the credit union mission to help more people.
As an affiliate organization of CUNA, the National Credit Union Foundation acts as the charitable arm of the credit union movement. It builds on CUNA’s goals to help cooperatives become more effective in their communities. Together, CUNA and the Foundation form a team dedicated to helping more people live their best financial lives.
“Our work meshes beautifully with CUNA’s,” said Gigi Hyland, the National Credit Union Foundation’s Executive Director. “We’re strategically aligned, and we work in unison to build financial well-being for all.”
Credit Unions: A Catalyst That Serves Community Needs
More Americans have struggled to make ends meet since the Great Recession. Before the start of COVID-19 pandemic, 40% of Americans reported they would have difficulty covering a $400 emergency expense.
While CUNA advocates for consumer protection, information security, and homeownership, the Foundation helps credit unions leverage their status to serve more struggling individuals.
“The events of the past few years, including the racial reckoning and the COVID-19 pandemic, have exposed persistent financial disparities that need to be broken down,” Hyland said. “For credit unions, that means staying focused on what we were founded to do.”
The Foundation assists through its signature educational offering — Credit Union Development Education (DE) program. The program brings credit union professionals together to talk about the challenges individuals, families, and small businesses face.
“We provide data and resources that show professionals what’s going on in their communities,” Hyland said. “And then we set them free to ask how they would solve those challenges.”
For example, a credit union in a community experiencing food insecurity may partner with a local food bank. But the DE process leads to solutions that serve communities most effectively.
“It’s about catalyzing credit union professionals to think broadly about the differences they can make on their own — and with partners,” Hyland said. “What powerful collaborations can credit unions bring to the table?”
Biz Kid$ and Other Programs Highlight Financial Health
As the COVID-19 pandemic continued, Americans began experiencing a transformed employment marketplace. The rising gig economy, work-from-home models, inflation, wage pressure, and other challenges left many feeling uncertain and vulnerable.
It’s not a time for timidity or missteps when it comes to financial services. That’s why the Foundation ensures consumers have access to financial health programs that promote values and skills for success.
That education can start as early as middle school through the Foundation’s Biz Kid$ program, a collaboration with television’s Public Broadcasting System. Every year, about 9.6 million people watch Biz Kid$ on TV, and approximately 15 million students and educators benefit from resources associated with the program.
“Biz Kid$ is about fostering entrepreneurship but also teaching financial well-being,” Hyland said. “Whether they go to college, tech school, or directly into starting their own business, Biz Kid$ participants are well-armed from a financial perspective.”
In the wake of the Great Recession, the Foundation began viewing financial literacy as part of a broader financial well-being issue within the context of the overall credit union mission.
“We need to make sure people have the right products, services, and coaching to get them on the financial path they want to be on,” Hyland said.
The Foundation has been at the forefront of the Financial Well-being for All conversation for several years. Their work helps credit unions link their member-centered philosophy with resources that help them make financial progress. Areas of focus include debt reduction, building or rebuilding credit, savings goals, and homebuying, among others.
“Inclusivity is the important thing,” Hyland said. “There are so many disenfranchised populations that need access to services for building a better financial life, and we help credit unions contribute to that.”
Busting Credit Union Myths and Overcoming Inequality
Since the earliest days of the credit union movement, financial cooperatives have reached beyond their markets to bring reasonably priced products and services to more people.
The Foundation provides education and resources to help credit unions help their members. It also helps institutions expand their mission with grants to reward innovation.
“We gave a grant to a credit union in Wisconsin that wanted to equip an incarcerated population with financial skills for life after prison,” Hyland said. “We glean lessons from innovations like that and share them out to other cooperatives.”
Working alongside another CUNA affiliate, Credit Union Awareness, the Foundation is also engaged in credit union myth-busting. As CUNA works to modernize rules around charters to expand credit access in underserved communities, the Foundation helps consumers understand that, as charters have grown, most credit unions no longer have a limited membership base.
Through Your Money Further, consumers can learn about credit unions and find one that aligns with their needs.
“Many people think they have to work for a certain employer or have bad credit to become a member,” Hyland said. “Your Money Further is a great resource for consumers to search and learn more about credit unions they can join.”
According to CUNA, more than 120 million Americans are credit union members. As not-for-profit cooperatives, credit unions across the U.S. advocate for financial wellbeing and inclusion to build healthier communities for all. And Hyland sees even more expansion ahead.
“As we look at the continued need people have for solid financial advice, and affordable, appropriate products and services, credit unions can be that solution in 2022 and beyond,” she said. “I’m excited that we’re putting our energy into making sure we understand our members and that we can meet those needs.”