There are a thousand lessons to be learned from the “Great Recession” and the real estate boom and bust that preceded it. From a consumer advocacy standpoint, the most important lesson for credit unions is that our members are still prone to making very bad financial decisions.

Thus, the $64,000 question: Does your credit union have the guts to believe that unbiased consumer education and advice can:

1. Help members make better financial decisions;
2. Discourage some members from buying a car or a house right now; and
3. Build long-term loan volume through unprecedented member loyalty and trust.

Quite frankly, I’m shocked at how often I hear advice like, “There has never been a better time to buy a new house or car than today!”

That’s not advice, it’s sales puffery. Today may not be the best time to buy a house for many first-time buyers, regardless of the near-historically low mortgage rates.

Unemployment remains at 9%, new job creation is lagging the economic recovery, and there’s plenty of room for continued home price declines in various markets and price ranges. Plus, as many move-up buyers know, it’s hard to sell a house these days.

There’s plenty of anecdotal evidence that suggests today’s housing market is hindering employers’ ability to recruit new talent from outside the immediate area, as potential employees can’t sell their houses and relocate.

The gas factor

Another financial education challenge concerns the effect of gas prices on members’ auto purchase decisions. An analysis by Ent Federal Credit Union of gas prices and auto purchase decisions from 2005 through 2009 reveals that it takes just a 25-cent increase in the price of gas for consumers to do crazy things—either surrender their gas guzzlers to the lender or take on additional debt to buy a more fuel-efficient car.

Consider my car situation. I have a perfectly fine, six-year old car that’s paid for and worth $12,000 that gets an average of 20 miles per gallon. I’d love to buy something more fuel-efficient, but gaining a few miles per gallon isn’t worth it.

If I were in the market for a car, I’d most likely buy a new Volkswagen Jetta turbo diesel that gets 35 miles per gallon. But is that level of efficiency worth buying a car based solely on gas prices?

I drive about 15,000 miles per year. With my current car, assuming that gas costs $4 a gallon, I’d spend $3,000 per year at the pump. With the Jetta, I’d spend about $1,700 per year, but I’d take on about $18,000 in new debt to buy the car. That’s a 14-year break even period.

If my old car is ready to die, certainly it makes sense to trade it in. But I plan to keep my car for another three to four years.

In the meantime, I know engine technology will continue to advance, as “start-stop” technology and lighter-weight materials will boost efficiency even higher. The decision to buy a new car will be much easier the longer I wait.

How many of your members will make a hasty decision if gas prices continue to climb?

I believe the long-term benefits of providing unbiased financial advice to build extreme member loyalty will outweigh the impact of losing some of today’s loan business.

Do you have the guts to give your members the straight story?

BILL VOGENEY is senior vice president/chief lending officer at $3 billion asset Ent Federal Credit Union, Colorado Springs, Colo., and vice chair of the CUNA Lending Council’s Executive Committee.