That "boom" you're hearing at credit unions around the country is
the sound of savings accounts being locked by an aging membership. But credit
unions are responding by reaching out and opening the door to Generation Y.
As they approach retirement, spending and lending needs are changing for baby
boomers - individuals born between 1946 and 1964. Many of the baby boomers are
no longer in the prime borrowing period of their lives. Instead they are devoting
more of their financial resources to savings. Today, the average credit union
member is around 44 years old.
In steps Generation Y - those born between approximately 1980 and 1995. At
an estimated 71 million Americans, this generation outnumbers the previous generation
by at least 25 to 30 million and, importantly, is in earning (and spending)
mode. Generation Y appears undeterred by the recent economic downturn, spending
nearly $172 billion last year alone. Consequently, every industry from automakers
to clothing designers is courting the group, hoping to build lifelong loyalty.
Credit unions have jumped on the bandwagon. Realizing that future vitality
lies in the hands of future members - today's youth - credit unions are developing
programs to teach children and teenagers to save money.
Nearing 10 years of age, even the youngest members of Generation Y have probably
started a kiddy savings account. Credit unions are focused on maintaining these
relationships and growing accounts by offering kids club events, newsletters
or Web pages. Some go as far as offering prizes for meeting savings goals.
Teenagers - who make up the majority of Generation Y - are enthusiastic about
summer jobs and financial freedom from their first paychecks. Research indicates
that most do not want to keep large sums of money in their pockets, preferring,
rather, to deposit money into an account where they can access it regularly.
Credit cards for this age group are common: 33 percent of high school seniors
and 78 percent of college students have at least one.
Money management is becoming a key concern for young adults and their parents.
Successfully reaching out to this age group can involve partnerships with local
educational institutions or in house seminars about financial organization that
can provide a lifetime of benefit: budgeting, investing and using credit.
The oldest members of Generation Y recently entered the adult world - struggling
to balance their checkbooks, pay rent and learn the ropes on their first "real"
job. For many, these first few years on their own will include their first major
financial transactions; for instance, the purchase of an automobile - a key
moment for credit unions.
This is when the years of credit union kiddy accounts, teen finance classes
and other relationship building tactics pay off, putting credit unions in the
driver's seat for the loan.
Regardless of the strength of the customer bond, credit unions still have to
overcome zero percent financing, slick dealership F&I officers and other
outside pressures. To help win the auto loan - and potentially other future
financial accounts for these 20-somethings - more and more credit unions are
steering buyers to Enterprise Car Sales, which guarantees the credit union receives
100 percent of used car loans 100 percent of the time. An added bonus for reaching
this internet savvy generation is the Enterprise Car Sales web site linked to
partner credit unions nationwide offering an easy online car shopping experience.
Enterprise Car Sales, a division of Enterprise Rent-A-Car, helps credit unions
increase their loan portfolio and optimize member loyalty by creating tailored
used car buying/loan programs. These include special car sales, free car buying
seminars, and membership communications, among other value-added services designed
to enhance lifelong membership relationships.
From kiddy accounts to automobile loans and beyond, credit unions are sending
a clear message "why" credit unions can be a lifelong partner for