LAS VEGAS–Can the 19th century Brothers Grimm fairy tale Rumpelstiltskin apply to credit union leaders in the 21st century? Yes, said a group of CU leaders here.
But first, a brief reminder on the fairy tale itself, which was the theme of a session during Mitchell Stankovic’s Underground Collision here.
Rumpelstiltskin is a mysterious gnomelike man who spins straw into gold for the benefit of a beautiful miller’s daughter, in exchange for her future firstborn child. The poor miller had bragged to the king that his daughter could turn straw into gold. The king takes him up on it and locks the daughter in a room with some straw, and Rumpelstiltskin shows up to help make that happen—but it comes with a price.
The little man reappears to demand his payment when the young woman, who is now queen after marrying the king, bears her first child. Giving the child to Rumpelstiltskin had been the price of the bargain. After she begs him to release her from her thoughtless vow, he allows her three days in which to discover his name. If she cannot, he will take the child.
All seems lost until someone overhears his premature celebration of his good fortune and gives the queen the information she needs to keep her child.
From left, Gigi Hyland, Eric Estes, Linda White, Enrique Delgadillo, and Seth Brickman.
Spinning Gold in CUs
So, can credit unions spin gold? Panelists tackling that question during the session included Gigi Hyland, executive director with the National Credit Union Foundation (who acted as moderator); Seth Brickman, president/CEO of QCash Financial; Enrique Delgadillo, president/CEO of BALANCE; Linda White, executive director of CUWLA, and Eric Estes, retired president/CEO of Boulder Dam CU.
Here's what the panelists had to say:
Brickman: Here is how I spin gold. Last year, we know 167 million people struggled financially. This year, that number is 176 million. Last year, one out of every 10 people was credit invisible. This year, it’s two out of every 10.
We talk about credit unions wanting to grow membership. But we just want the A-paper members. We don’t want the no- and thin-file members, because we can’t loan to them.
What I have learned is that helping the underserved is a financial imperative for us to stay relevant and to continue. The Gen Z’s are the thin files and credit invisible. When they look for help they don’t find what they are looking for. So, how do we embrace technology to service these people? They want instant gratification. That’s why our product provides funding in less than 60 seconds.
How do we embrace the mindset that financial inclusion isn’t a social initiative, it’s a financial imperative.
Membership Could ‘Skyrocket’
That 26-million people who are credit invisible is a number that would make your credit union skyrocket. And you create members for life. You’re not creating members for today, but you are offering goods and services that allow them to be active, engaged members who create lifetime value. There could be upwards of 50 million people who are credit-invisible. It’s going to be game-changer.
Delgadillo: I wanted to draw a parallel with Rumpelstiltskin. When the miller stopped the king, all he wanted was financial well-being. He was tired of being poor. Why stop the king? Why not go in the forest and find his local credit union? Probably because the miller was like the 17-million Americans who are unbanked, or the 55 million who are underbanked.
You have to go through a different route and you don’t go through the route of a trusted credit union; you end up in a situation dealing with Rumpelstiltskin. knowing the terms and conditions and ending up in a predatory situation.
How Do You Want to be Talked About?
How do you get to financial well-being? How do you want your credit union to be talked about--from the standpoint of transactions or branches? Or, do you want your name to pop out when someone is talking about financial wellness or buying a car or a house?
If you don’t take care of your members, they are going to end up be taken care of by Rumpelstiltskin.
White: (I have worked to create the) Credit Union Women’s Leadership Alliance. Eighty percent of credit unions are under $300 million in assets and 60%-plus of those are run by women. We were formed to be a trusted space and to share the unique challenges women face every day and to help them be sustainable. It’s not about male vs. female. It’s about how do women show up.
We have a communication portal where members share ideas. The conversations are raw and deep. I’ve never seen a comment like, ‘Why didn’t you?’ It’s what can I do to help? Here’s something to think about: Women do share more. I have had the opportunity to vet and find solutions that can work for our credit unions. I think it’s about the trust and the equity and that safe space.
Estes: At planning sessions one of the first things I would ask the board is, who do you trust in an untrustworthy world? We have millions of elderly people defrauded every day. They are told not to trust anyone on the phone or computer. We have Gen Z and Gen Y who have seen their parents lose their homes and they were raised not to trust big banks.
You have a debt-averse population coming up that doesn’t want to borrow, they don’t want to owe anyone.
Then we talk today about having a no-trust (technology) environment. It’s a prudent approach, but the message we are sending to staff is we don’t trust them. We have around us so many avenues of threats to the trust environment we are trying to create. I think that we as an industry have developed one of the best trust environments you could ask for. But it’s fragile.
We have a 75% to 80% penetration rate in our community. Our marketing budget is about how do we invest back into the community? We pay high school students to attend our financial education classes. We are in the senior centers at least once a week on the latest fraud trends.
Many Moving Parts
There are so many moving parts in the environment today. Technology is the future, but you can’t forget the people. We all have access to the same products and services and pretty much the same structure. The only difference is our people, and that is where the difference lies. We can’t let them be threatened by technology.
We can’t be everything to everyone, so we damn well find out what we are really good at and build on that.
Trust is under attack. But we can spin gold. You hold the trust of your members in your hands.
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