Just like REI
Another tricky concept to communicate is credit unions’ not-for-profit cooperative business model.
This is largely—but not completely— unfamiliar to young adults, because cooperatives aren’t common business models in their world.
When explaining how credit unions operate, one of the best analogies is REI—the outdoor outfitter that also happens to be a cooperative, says Haller.
REI pays dividends to its members each year. Most young nonmembers are familiar with REI and the dividend announcement that comes in the mail every winter.
Credit unions, like REI, are cooperatives and pay dividends. Some credit unions mail out dividend checks, some deposit the dividends directly to members’ accounts, and some invest those dividends back into their operations to provide better service to their members.
“Once you explain that credit unions are like REI, young nonmembers instantly get it,” Haller says. “Otherwise, it’s a pretty complex concept to explain. But it’s well worth the time and effort.”
Need to know
Another challenge credit unions face is that young nonmembers tend to be inexperienced consumers of financial products and services.
“They have to go through a life threshold first,” Haller says. “Then they might realize that credit unions have better rates or fees, and they might start asking why. But by then, most of them have already established relationships—checking accounts or credit cards—with other financial institutions. Once that happens, switching to a credit union becomes much more challenging.”