Roughly 97 million consumers belong to credit unions—but nearly twice as many don’t.
Given credit unions’ lower rates and fees and higher dividends than banks, this begs an important question: Why not?
According to a new report from CUNA’s market research department, some nonmembers don’t realize they could join a credit union, while others don’t understand what credit unions are or how they differ from banks.
Credit unions have been trying to bridge this awareness gap for decades, according to the 2013-2014 CUNA Member and Nonmember Survey Results.
The August edition of Credit Union Magazine details the survey findings in depth.
The importance of turning nonmembers into members—especially those age 18 to 24—can’t be overstated. This group, known as future borrowers, will soon enter their peak borrowing years (age 25 to 44).
Credit unions will benefit tremendously if they can mobilize quickly to educate and attract young adults, says Jon Haller, CUNA’s director of corporate and market research.
“You want to be with these members when they start buying homes and cars, opening individual retirement accounts, taking out student loans, and purchasing other financial products and services,” he says.
Overall, one-third of U.S. adults are credit union members. But that falls to 22% of consumers age 18 to 24.
Plus, this age group is the least familiar with credit unions. Seventy-one percent of nonmembers age 18 to 24 are “not at all familiar” or “not very familiar” with credit unions. That compares with 64% of all nonmembers who lack basic familiarity with credit unions, according to the CUNA report.
Not only do credit unions have to convince this group that rates, fees, and services are better at credit unions than at banks, says Haller, they also have to explain credit unions’ unique, cooperative business model.
“Until these folks know what credit unions are, they won’t be able to make informed decisions about where to conduct their financial business,” he says. “A lot of people—primarily younger nonmembers—have no idea what credit unions are and they certainly don’t know why credit unions are preferable to banks.”
According to the 2013-2014 CUNA Member and Nonmember Survey Results, these steps would encourage nonmembers to use credit unions:
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