When Is A Positive A Negative For Credit Unions?

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A recent study from Discover garnered the attention of a lot of credit union people when it was reported that:

“Members of credit unions have a more positive view of their personal finances than people who don’t belong to one.”

Links to articles reporting the study got tweeted and retweeted aplenty on Twitter.  I would imagine it was because credit union people saw this as positive news for credit unions.

I hate to rain on credit unions’ parade, but…..it’s not good news.

It’s certainly possible that the reason credit union members have a more positive view of their finances than other consumers do is because of the great financial care and advice they get from their credit unions. But since many (most?) credit union members have relationships with banks, and since many (not most?) credit union members only have a lending relationship with their credit union, I’m not sure I’d put much weight on this explanation.

I think there’s another explanation: Average age of credit union members.

The average age of credit union members is a number I’m having a tough time pinning down definitively. There are a number of references to a blog post the CU Warrior wrote back in 2008 in which he claimed the average age was 47. He didn’t cite a source, so I’m not sure where he got that number from. A CU Times article from August of this year stated the average as being in the “upper 40s”, but again, no source was cited.

More recently, I’ve seen the VP of Marketing of North Jersey Federal Credit Union in Totowa, NJ claim the average age was 57, while an article on Lalate.com claimed that according to the NCUA, the average age is 55+.

Regardless of whether or not the average age is 47 or 57, it doesn’t matter, as long as we agree that the average age of a credit union member is significantly higher than the average age of all US citizens, which, according to the US census bureau was 37 in 2008 (and is unlikely to have moved very much in the intervening two years).

As long as we agree on that, then we can entertain my notion that the reason that credit union members are more positive about their finances is simply due to the fact that as older consumers, they’re financial lives are more stable and secure.

In fact, a study from the Pew Research Center found that age is a pretty good predictor of recession-related hardships — while nearly seven of ten Gen Yers said that they’ve suffered some hardships from the recession, that percentage falls to just three in ten Seniors.

So I apologize again for raining on the parade, but Discover’s findings aren’t anything that credit unions can…um…take to the bank.

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