Easy access to information is paramount. I need to know the basics of what your credit union offers before I’ll commit to searching it on Google, much less joining it.
I voiced this in one of my earlier blogs, “Don’t Make Information A Barrier To Entry.”
But, listening to one millennial can get rather dry, so here are two other perspectives to consider.
Moultrie Ball is a 28-year-old entrepreneur who works at a shared office space in Columbia, SC. He and his wife, Bolling, have a mortgage and drew on their house’s equity to help launch a toy company.
Hannah Price is a 27-year-old doctoral candidate at the University of Alabama in Tuscaloosa, AL. Hannah and her husband, Jackson, a police officer, are currently financing their first house.
These are their stories.
When It Comes To Loyalty
Ball uses two banks for managing his finances: First Community Bank and Bank of America, the former for his personal banking and the big bank for his business. He says the branch experience matters.
“I have a better relationship with the smaller bank,” Ball says. “I build relationships with the people in the bank when I go, and I see familiar faces.”
Despite the fact millennials are known for shopping the best deals of the moment, anecdotal evidence like Ball’s suggests they do build personal relationships with, and loyalty to, their financial institutions. But that doesn’t happen automatically, and it’s not a given.
“I have no loyalty to Bank of America,” Ball says, adding that relationship has been quite costly. “I didn’t close my account when I moved most of my money out of Bank of America and into a different bank. The next thing I knew, I got a $150 overdraft fee and another $75 fee in the mail.”
According to Ball, the bank had started charging monthly maintenance fees, which kept accruing even after he didn’t have money in the account.
“I’m sure that was detailed in the contract when I opened the account, but that’s not what aggravated me,” Ball says. “The fact the bank didn’t notify me until the bill became substantial is what ticked me off.”
Price is facing a similar issue and might soon be moving her business from BB&T, the major regional bank in Tuscaloosa.
“I feel nickel and dimed; BB&T doesn’t care about customers,” Price says. “I still feel loyal to the individuals at the bank, but I don’t feel loyal to the establishment.”
Ball and Price are not alone in their discontent. According to a FICO survey, the No. 1 reason respondents gave for switching financial institutions was high fees. Millennials are also five times more likely to close accounts with a primary bank, according to the same survey.
When It Comes To Advice
“I’d go to a friend or family member for financial advice, but I’d never go to a bank because it has an agenda to push,” Ball says.
Again, Ball is not alone. According to a Facebook IQ report, only 8% of millennials trust their financial institution for financial advice. At the same time, 60% of millennials want their bank to be their financial partner, according to the same report. That’s a pretty big disconnect.
Ball prefers banking with the smaller institution that offers a sense of familiarity. Because of that closeness, he’s developed a rapport with its people and trust in its motives. This sounds like a page out of the credit union playbook, which brings up a question: Why haven’t Price or Ball moved to a credit union?
“Just plain ignorance,” Ball says. “I honestly couldn’t even tell you the difference between the two.”
Price already has. She and her husband have just been preapproved for a home loan through Tuscaloosa Credit Union ($72.9M, Tuscaloosa, AL). They also are in the process of moving their primary banking business there.
Price did have some skepticism before they switched. For example, she wasn’t sure how well the credit union does online or mobile banking.
Perhaps Price would have been attracted to the movement earlier if she was confident even smaller credit unions had the tech tools she needed. For Ball, he needs to understand the difference between a for-profit bank and a member-owned financial cooperative.
When credit unions can start to clear obstacles like these, they’ll have a better chance of attracting a generation of promising young earners for life.
Editor’s Note: Hannah Price is the daughter of Callahan senior writer Marc Rapport.