//Home / Solutions / Education / Low Wealth

Low Wealth

Why is education for low wealth households important?

An estimated 7.7% of U.S. households, or approximately 9 million are unbanked. Another 21 million households are under-banked, meaning they have accounts at financial institutions, but do much of their financial business with alternative services such as payday loans and check cashers. Such services may be convenient, but are costly for households and have no means or incentives to help households build assets and wealth. Financial education is a means to help low wealth households break out of the cycle of debt. Remedial programs focus on helping people reduce their debt service burdens and address outstanding concerns about credit problems.

Why should credit unions care?

Consumers, and especially under-served consumers, need to be equipped with knowledge and skills to evaluate their options and identify those that best suit their needs and circumstances. Financial literacy can empower consumers to be better shoppers, enabling them to obtain goods and services at lower cost. This optimizes their household budgets, giving them more opportunity to consume, save or invest. Unbanked and under-banked households represent immense opportunity as potential members for credit unions. Through financial education programs, these new members can become well-informed consumers that can lead to more productive loan and savings business for the credit union.

What can credit unions do?

Many credit unions work with low-wealth individuals and households one-on-one or in small groups to provide meaningful information and hands-on skills. But credit unions can reach more people – members, potential members, and the community at large – by partnering and collaborating with community-based organizations to deliver knowledge and skills. Through such partnerships, credit unions are not only helping under-served individuals but providing an important service to the communities.

(None listed.)

Park Side

Whitefish, MT

Free to Choo$e Initiative » View details

The Free to Choo$e program is a partnership between Park Side FCU and the Community Action Partnership of Northwest Montana to help families of low- and moderate-income take charge of their finances and start to lead lives of choice, not necessity. The whole family is encouraged to participate in a 12-class, structured financial literacy course. To date, 103 families have completed the program.

Mid Oregon

Bend, OR

Low Wealth Education » View details

Mid Oregon Credit Union has a partnership with COLINK which refers clients to the credit union for financial services. COLINK provides a financial education forum and mentorship program for clients, generally those near or below the poverty level who have problems managing their finances but have the capacity and commitment to make a change. Clients must be willing to attend five financial education classes and keep in touch at least monthly with a mentor. COLINK guarantees approved loans through Mid Oregon for its clients.

Chino

Silver, NM

Debt in Focus » View details

Debt in Focus is a free, anonymous debt management tool for members. Chino FCU participated as a Beta testing site for the program during 2009. Staff refer people to Debt in Focus if members have been denied a loan because of their debt load or to help a member keep a car from repossession.
Leave a comment
  • Submit

* we will never publish your email