Payment Industry Insider

Unfortunately, that word, saving, is almost as lost to our societies’ consciousness as the word “sacrifice” mentioned in an earlier article. We, credit unions, really need to step up to the plate and promote a fundamental belief that we have always prided ourselves in - savings and the promotion of thrift.

I was visiting with a client of mine a few weeks ago and we were talking about those very things. He was commenting about their need for deposit growth to fund loan demand, and as the conversation deepened and we talked of the lack of savings today (I believe I heard recently that the American public was saving at a negative rate), what it meant and why it was important – for the individual as well as our society as a whole.

He further commented that we (all financial institutions) have done a marvelous job of promoting the “loan thing”, to the extent that Americans are carrying an all time high debt level. But savings…now that’s another thing.

He went on to recall how he and his credit union used to promote savings with their membership. For instance, when a member wanted to borrow money for a car, the credit union required that the member have 10% down. Many didn’t have that, but the credit union offered a solution to that dilemma. The member could borrow the 10% (or whatever they needed to make 10%), put it in a savings account (it would be pledged against the loan), and when the loan was paid off the member would have a savings account with a balance, something many had never had before.

Did it work? Sure did. It was a time when people were willing. And the credit union received numerous “thank yous” for their efforts on their members’ behalf.

This was back in the mid 70’s, so you might say that wouldn’t work today. Maybe, maybe not. Who knows? But the point is, we all know that people need to save more, and we – credit unions – can help them. We just have to think up ways to promote the concept.

I bet there are more potential takers out there than you might imagine. See what one credit union has done with regard to savings and home loans in this related CU Times article.