First, I hope this letter finds you well. I know it does. Despite the turmoil in financial services, the CU movement is alive and well, with over 85-million members, an expanding product and service base, and a strong history of providing great service to members. But there is a problem-and it cries out for your full attention.
For the first time in the post-War era, middle-income Americans are moving backward in terms of financial health. Incomes are flat, making it difficult for working families to keep up with the increased costs of living in our consumption-driven economy. Personal debt levels have soared, creating the requisite problems that come along with such leverage: increased bankruptcies, a negative savings rate, and serious anxiety about making ends meet.
In the midst of these current problems, it is easy to forget about the future. But the hard truth is the problems that lie ahead are more significant than those we currently face. The challenges associated with planning for retirement have never been greater. Longer life spans mean more years of income needed. Health care costs continue to grow at double-digit rates. And our government's venerable income-security programs, Medicare and Social Security, face huge shortfalls, raising the frightening possibility that these programs will no longer be able to provide most Americans with even minimum levels of financial security in retirement.
With pensions giving way to defined-contribution retirement plans, workers now bear the responsibility for planning and managing the accumulation of their own retirement assets. And if that isn't enough, they also have to plan and manage the distribution of those assets when they reach retirement age.
In short, the majority of credit union members face challenges they are ill equipped to handle. And they face these massive burdens on their own. But they don't have to.
It is time for credit unions to step forward and meet this problem head-on. CUs must marshal their collective resources to deal with the problems their members face now and in the future.
It is time to move beyond the old "savings & loan" paradigm. Just providing better deposit rates and cheaper auto loans is not enough. Your members need more-much more.
First, they need advice-solid, trustworthy advice on how to deal with their current financial situation. How to optimize their debts to minimize interest expense and maximize cash flow. How to insure against basic risks. How to save money for future goals. In short, they need a plan.
Second, they need innovative financial products to carry out their plan. New credit/forced savings bundles, for example. Better, cheaper insurance solutions, especially for life and disability. Affordable retirement and investment solutions that meet the needs of middle-income members.
Finally, they need advocates. They need a trusted expert to articulate that middle-income Americans are struggling. They need help. And that credit unions are the answer.
But these can't be empty words. You have to be prepared to help them, which means you have to think more broadly than you have in the past. As a movement, it's time to come together with a sense of urgency not seen since the Depression to develop the shared commitment to this mission.
Let's not kid ourselves: helping members in this way will require a huge commitment of time, people and money. You must commit to embracing new ideas, new ways of doing business, and new ways of communicating with your members.
But if your mission is truly to make a difference in your members' financial lives, commit you must. Now is the time to get started-your members are counting on you.
Bryan Link is Managing Director of BrightLeaf Financial Network, www.brightleaffinancial.com.