Why Black Money Matters
According to Ted Turner, you can either lead, follow or get the hell out of the way. I guess Ted never worked in the Credit Union Industry. It somehow manages to do a little bit of all three and sometimes none of them particularly well.
The latest example of how the industry is a day late and a dollar short when it comes to positioning itself with the American public is its reaction, or lack thereof, to the burgeoning #BankBlack initiative. The movement, started by Rapper Killer Mike, encourages African Americans to move their money to banks and credit unions as a way of underscoring the economic leverage of the Black community. In Monday’s Miami Herald, it was reported that 1,000 people turned out at a Miami branch of One United Bank, which, according to the paper, at $622 million in assets is the largest Black-owned bank in the country. Similar events have been held in Los Angeles and Atlanta.
Here’s what gets me so frustrated. Credit unions have a pretty good story to tell when it comes to minority owned credit unions, but, for whatever reason, are gun-shy about getting the word out. For instance, according to NCUA’s most recent report to Congress on its efforts to encourage and preserve minority credit unions, as of June 30, 2014 there were 688 minority credit unions, half of which were run by Black Americans. These institutions had more than 871,000 members. Of course, not all is well. The percentage of Black institutions is declining, which is hardly surprising given that the average asset size of these institutions is slightly more than $17 million.
Still, the historical impetus for credit unions was a recognition on the part of working class Americans, many of whom were first generation immigrants and Black Americans, that they needed to pool their resources to maximize their chances of living the American Dream. This is a story that can resonate as loudly today as it did 100 years ago. It should be clear to any group of people who want to combine resources to maximize their economic freedom that the credit union model is ready, willing and able to help.
The need to trumpet credit union values has bottom line implications. When someone walks into a bank, they know exactly what they are doing and have a pretty good idea of what to expect. In contrast, before someone opens an account with your credit union, they have to understand what a credit union is, how and why they are eligible to join, and what separates credit unions from banks.
This is a heavy lift. The industry, writ large, cannot help your credit union offer the best financial products, but it can and should make sure that every potential new customer who goes online or walks into your branch knows what a credit union is. This can only be done effectively when we demonstrate that many of the reasons that fostered the creation of credit unions in the first place still exist today.
On that note, your faithful blogger is headed to Cape Cod to meet up with my sister, reclaim my kids, and get some Four Seas Ice Cream. See you Monday.