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Compliance

Consider the issues that threaten financial stability in your community

 

Credit unions’ voluntary REAL Solutions effort has delivered more than $1 billion in benefits since 2007 to the 2.4 million Wisconsin consumers who own them and has helped improve the financial stability of individuals, families and communities. Wisconsin credit unions’ Scorecard, published by The League, explains that success in greater detail. Still, recent reports show that the problem of financial insecurity persists, challenging credit unions to consider the issues that have a financial effect on their communities.

ImageThe U.S. Postal Service eyes serving the financially underserved

 

A new report by the USPS explores its interest in using postal facilities to offer financial outreach to underserved markets. It says that if even ten percent of what the underserved currently spend on interest and fees instead went to more affordable offerings through the USPS, it could generate $8.9 billion in annual revenue.

 

The latest reports show that:

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  • Eighty percent of payday loans taken out at payday lenders are rolled over or followed within two weeks by another loan, trapping borrowers in a cycle of escalating debt. The Consumer Financial Protection Bureau (CFPB)’s latest findings, which grew from a 2013 study, noted that the majority of monthly borrowers are government benefits recipients. A new study from the Pew Charitable Trusts also indicates that payday lenders in Wisconsin charge the second highest payday loan interest rates in the nation, averaging 574%.

 

 

  • Thirty-four percent of Wisconsin households are in a persistent state of financial insecurity, according to the Corporation for Enterprise Development (CFED). This means that they have little or no savings to cover basic expenses at the federal poverty level for even three months in the event of an emergency such as a job loss or health crisis. Many of Wisconsin’s "liquid asset poor" include those who would consider themselves middle class (19 percent of households earning $53,701-$84,720 annually). Wisconsin ranks above average with the 17th best overall financial security. CFED’s Assets & Opportunity Scorecard for our state cites issues including financial assets and income, businesses and jobs, housing and homeownership, health care and education that affect Wisconsin citizens’ financial stability.

 

"Wisconsin credit unions have been leaders in addressing the issues that improve financial security for members as well as for sharing tools and best practices to offer REAL Solutions and outreach," said League VP of Development Chad Helminak. "I’d encourage credit unions looking to do more to tap the wealth of tools and knowledge already at work within the movement."

 

He points to a payday lending toolkit, a payday lending issue white paper, and an upcoming CUNA webinar that address payday lending issues. Credit unions looking to improve their outreach can also turn to the National Credit Union Foundation’s REAL Solutions Impact Center as well as the Filene Research Institute’s researchproducts and i3 (innovation) program.

A turnkey kit to hold a retirement fair, developed by the NCUF in conjunction with CUNA Mutual Group, is also available free to Wisconsin credit unions through the League. The kit can help you engage workers in making lifestyle choices for their retirement years while assessing the cost of supporting those choices. The interactive fair is similar to a "reality fair" that credit unions have used to teach teens adult financial decision-making.

 

For information on any of these reports or resources, contact Chad at (608) 514-0080.


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