Credit Unions Can Gain Amid Consumers’ Dissatisfaction in a Gloomy Economy

Consumers are feeling the impact of high inflation. Prices in October were 7.7% higher than the year before, and though prices have dropped somewhat in recent months, inflation remains well above the Federal Reserve’s desired level of 2%. Worryingly, 77% of fund managers believe a recession is likely next year, according to a Bank of America survey.

Facing such a troubled economy, consumers are changing their behavior — and growing alarmed. According to a recent PYMNTS survey, 65% of consumers are very or extremely concerned about current and near-future economic conditions. Another survey found that a similar share of consumers are taking action to manage their expenses, with 44% reducing their savings. With economic conditions remaining difficult, consumers could use some help.

This edition of the “Credit Union Tracker®” explores how economic conditions impact consumers and the role of credit unions in this time of economic uncertainty.

Around the Credit Union Space

Despite financial institutions (FIs) being best positioned to help their customers manage money in a time of high inflation, many consumers feel that their FIs have left them in stormy seas without a paddle. A recent survey found that nearly two-thirds of banking customers reported that their FIs offered no advice on managing the cost-of-living crisis in the past three months, although most respondents wanted such help.

Meanwhile, CUs in Europe are urging regulators to help distressed consumers. CUs in the European Network of Credit Unions and the World Council of Credit Unions are calling on the continent’s financial and governmental agencies to limit regulatory burdens on credit unions to assist members in getting the financial help they need.

For more on these and other stories, visit the Tracker’s News and Trends section.

Metro Credit Union on Helping Consumers Weather a Tough Economy

With consumers feeling economic pressure, it is up to FIs to help them. As traditionally people-oriented organizations, credit unions are uniquely positioned to provide this aid.

To get the Insider POV, we spoke with Robert Cashman, president and CEO at Metro Credit Union, to learn more about how CUs can assist their members in making financial decisions that will help them today and in the future.

How Credit Unions Are Ideally Poised to Help Distressed Consumers

There is no doubt that consumers in America are feeling distressed. Most Americans annually earning less than $50,000 are now living paycheck to paycheck, while 36% of higher-earning Americans — those making more than $100,000 — are also living paycheck to paycheck. In such a grim situation, one would expect FIs to help. A recent survey found that 63% of Americans had not received personalized advice or tailored communication from their FIs concerning the challenging economic situation.

While all FIs can help customers in these difficult times, credit unions are uniquely positioned to help. A CUs’ premise is a commitment to support its members’ financial well-being during good times and bad, evidenced by the fact that 90% of CU members say their institutions make managing finances easier. This helpfulness stems from a CUs’ access to data and community connections that it can tactically leverage to help consumers in distress.

To learn more about how CUs can help their members, read the Tracker’s PYMNTS Intelligence.

About the Tracker

This edition of the “Credit Union Tracker®,” a collaboration with PSCU, unpacks how credit unions are uniquely equipped to assist consumers during a time of pronounced economic problems and heightened uncertainty.