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January/February 2018 Issue: Front Page > Industry Info

Industry Info
Never Mind Your Wallet. What's in Your Savings?
By Joe Woods, CUDE

Man throwing money out of wallet The Federal Reserve Bank of New York released a report earlier this year with some astonishing news. Consumer debt has risen to all-time highs in nearly every category: Credit card debt, mortgage loans, student loan debt and even auto loan debt were all climbing to new heights. We shouldn't be surprised. For years we have been telling our members that loan rates are at an all-time low, so there is no better time to buy and finance. Sure, it's good advice to get while the getting is good. But, we should hit the pause button for a moment to reflect.

The last time consumer spending and debt were this high was back in 2008. And most of us were around to remember that debacle. Hollywood even made movies about what happened in 2008. Now, some of us have tightened lending policies since then. But, the bigger picture is looming large. If members spend more than they can afford, eventually they can't repay loans and can't buy groceries. Then defaulting begins. Cars get repossessed. Houses are lost to foreclosure. Thousands lose jobs as major corporations "trim the fat" or make "staffing adjustments". And to what end?

After major recessions like 2008, we tightened up. Consumers were interviewed on CNN, talking about their new personal savings plan. People were shopping frugally. The housing and auto market slowed down to 'closer-to-normal' rates of purchase. Some people recognized that a used Ford would suit their needs as well as a brand new BMW. But, our short-term memories left us longing for more.

So, what, as a credit union movement, are we to do? All of us type-A personalities want to check the quarterly 5300's to see how we stack up. But, we should be looking at it from a different perspective. How is our membership stacking up? Sure, our balance sheet is important. But, we need to stay in business to help our members with their business. Remember, it's not about us. We are a not-for-profit, for service. What educational services and resources do we provide? How do we help our members perform better as consumers? How are we teaching the children of our members about finances?

Even more so, do we stand alongside our members and spend time giving back to the community we serve? There is no better charge then to lead by example. Set the standards for giving in the community you serve and ask your membership to join your efforts. Raise awareness in your town and be an advocate where you can. I believe it was actor, Denzel Washington that was quoted saying, "You will never see a U-Haul behind a hearse." It's not about what you obtain. It's about what you give, not only of your money, but your time and your heart.

Let's make 2018 the year we set goals that focus more on giving back to the communities we serve and better serving our members.

Joe Woods is a CUDE and 16+ year credit union veteran. He can be reached at jmwoods2018@gmail.com.

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