In a Nutshell: The mission statement of most banks you walk into likely isn’t “educate first, sell second” — but that’s exactly the philosophy you’ll find at South Florida-based Tropical Financial Credit Union. While credit unions are known for member-friendly products and services, they also tend to put more effort into the area of financial literacy — and Tropical Financial does an especially good job in this area. Either online or at one of its branch locations, Tropical Financial provides consumers with the information and tools they need to understand and take control of their financial lives.
When South Florida couple Chad and Elizabeth got married, they decided it was time to put roots down and buy their first house. As Chad began comparing rates for a home loan, he quickly realized the value of working with a local credit union.
That’s when he and Elizabeth discovered Tropical Financial Credit Union. Since smaller lenders tend to have better, specialized understanding of their local markets, they can provide faster, higher-quality service to customers. And that’s exactly what Tropical Financial did for Chad and Elizabeth.
“That’s one of my favorite things, especially for first-time homebuyers,” said Amy McGraw, Vice President of Marketing at Tropical Financial. “When they get those keys, it’s a great feeling to know you’re helping somebody live that American dream. Being a credit union and a not-for-profit, it does allow us to really focus on the consumer and not so much on stockholders or the bottom line.”
Tropical Financial handled the entire home loan process for Chad and Elizabeth. Along the way, the couple learned about home loans and how theirs would affect their financial situation. This educational focus typifies Tropical Financial’s commitment to helping members achieve improved financial wellness.
In pursuing this mission, the credit union provides free financial health checkups and distributes information through a variety of channels. Naturally, Tropical Financial also provides the products you would expect from a financial institution, but it does so with personalized service and community interest that you won’t find at the bigger banks.
Credit Unions Abide By a Commitment to Their Communities
As non-profit cooperatives owned by their members, credit unions tend to be community-oriented, member-focused institutions. Members typically experience lower fees and rates on loan products, higher interest rates on deposits, and a greater emphasis on financial education.
“It really is better for the consumer in the end, no matter which one they choose,” McGraw said. “Credit unions are always better for the consumer. We don’t have those deep pockets that the banks do to be able to spread that message. And that’s why we often end up getting lumped in with the banks.”
In the US, there’s a certain stigma attached to financial institutions. “I think a lot of that stems from what happened in 2008 with the financial collapse,” McGraw said. “People just have a little bit of a negative feeling about banking institutions.”
But McGraw wants to make sure consumers know that credit unions are an entirely different animal — and one that is committed to spreading financial education to the communities it serves.
“If a person joins a credit union, it’s a win for the consumer,” McGraw said. “It doesn’t matter which credit union because we’re all in it for the same reasons. We are people helping people. That’s the philosophy of all credit unions.”
A New Mission to Demystify Personal Finance
“A couple years ago, we started thinking about who we wanted to be as an organization and the culture of the credit union. What it really came down to is that we wanted to educate first,” McGraw said.
Credit unions like Tropical Financial can step up to fill the gap in personal finance knowledge the public education system often does not provide.
“When a person walks in the door, regardless of their age, I think they feel like they should know the things that they don’t know,” McGraw said. “We want to erase that mystery and erase that idea that if you don’t know it, you’re lacking in intelligence. That’s not true at all. You just haven’t been given the tools.”
This lack of tools and information can prove detrimental. “We were seeing a lot of people who would apply for loans for the sake of applying, and they got turned down, and that ends up hurting their credit,” McGraw said. And any hit to a struggling credit score will make it even more difficult to obtain a loan in the future because of the nature of hard credit pulls by lenders.
That’s why Tropical Financial commits to educating consumers first and selling products second — after the consumer knows what they’re dealing with. Through this method, the credit union seeks to foster happiness and financial success for its members.
Tropical Financial’s latest public education focus is a site called Are You Money Smart?, which is a site designed to allow consumers to learn at their own pace about financial products, services, and terminology.
A Partnership with BALANCE Helps Members Stay on Track
For people in tough financial situations, a mortgage or personal loan with favorable terms may currently be out of reach.
“As a credit union, sometimes we have to say no,” McGraw said. “But, as part of our mission statement, if you’re going to have to say no, then give them the pathway to a yes.”
At Tropical Financial, that pathway is paved with informational media and proactive steps to improve a member’s financial standing. With this in mind, Tropical Financial maintains a long-running partnership with BALANCE, which provides members with online tools, webinars, and other educational opportunities.
“One thing we really like about BALANCE is that it offers financial counseling. It’s free to our members,” McGraw said. “It also has a lot of resources — workbooks that we add our own flair to, white papers, checklists, and things like that. We make those available on various landing pages, as well as through the blog.”
By publicizing and providing access to these resources, Tropical Financial helps consumers better understand whatever product they’re looking for. For example, someone seeking a car loan would benefit from a checklist of information they’ll need to supply in the application process.
“We try to give them education up front so that when they go through the process, it’s much more streamlined, it’s much quicker, they get the results faster, and everybody is much happier,” McGraw said.
Financial Education: Many Routes to the Same Summit
Tropical Financial’s educational efforts are far from exclusively web-based; it uses every point of consumer interaction as an opportunity to inform.
“On the phone, our on-hold message has little pieces of educational content,” McGraw said. “If you were to walk into any of our branches, we have something called Tropical TV. All of the content you see on the TV monitor is educational content we’ve created. So when you’re sitting and waiting to talk to somebody, there are about 25 to 30 minutes of content that rotates.” These videos are also available on Tropical Financial’s blog and Facebook page.
Education is only half the battle, though. People need to know how to act on their knowledge. To facilitate this, Tropical Financial provides free financial check-ups that help consumers assess and improve their current situations.
“We do a soft pull of their credit, so it doesn’t hurt them, but it gives us a look at what’s going on,” McGraw said. “It’s just a look at their overall financial picture and areas that they could improve.” These improvements could include steps like consolidating debt from high-interest credit cards to a low-interest loan and making a schedule for paying off debts.
For check-ups and other interactions, Tropical Financial emphasizes face-to-face conversations.
“The human element is so important in this digital age,” McGraw said. Unfortunately, direct interactions aren’t always possible, so Tropical Financial also provides other options. “We can do it on the phone, as well, given people’s busy schedules,” she said.
Tropical Financial is also exploring the possibility of using video chat to connect with members and consumers. “Just because we can’t specifically be in front of each other, that doesn’t mean we can’t have a conversation,” she said.