"Educational Programs Support Financial Freedom" - NCUF Executive Director Writes in CU Times

Bucky Sebastian

This Op-Ed piece originally appeared in the 12/15/10 issue of the Credit Union Times:

As the charitable arm of America's credit union movement, the National Credit Union Foundation’s programs and grants provide widespread financial education, create greater access to affordable financial services and empower credit union members to build assets. We will still continue in that direction, but we will primarily focus on financial education initiatives through REAL Solutions and grant-making to credit union organizations across the country.

Young adults believe that making better choices about managing money is the single most important issue facing individual Americans today, according to a recent survey from Charles Schwab. Where do they go for that information? The same survey found that only about one in three parents (34%) have taught their teen how to balance a checkbook, and even fewer (29%) have explained how credit card interest and fees work.

That’s one of the many reasons that the National Credit Union Foundation is making financial education a priority for 2011.

Financial education has long been a part of the foundation’s mission and a natural extension of the credit union philosophy. In fact, it’s embedded in the fifth cooperative principle–education, training and information. Credit unions were born to help their members and the communities they serve.

Our signature program, REAL Solutions, works through state credit union leagues to help credit unions in 40 states offer affordable and sustainable services to millions of low-wealth and modest means members and working families. These are the very people who need credit unions the most.

Here is what we’ve found with REAL Solutions so far. When we look at education, we suggest the focus start with credit union employee education–employees that manage their own finances well can better counsel members.

We’ve also seen that financial education programs offered by credit unions are most effective when they are "right time" education. For example, the right time to offer homeownership classes is when a member is looking to buy a house. It is also important to have the right products available to members as they are moving through life cycles.

We also encourage action education programs. One good example of this are financial fitness fairs, or reality fairs, where students have the opportunity to engage in action education–doing while learning.

The pillars of REAL Solutions are education, access to transition services (like check cashing, bill payment and prepaid cards), affordable loan programs, including nonprime auto loans and payday loan alternatives, savings programs designed for smaller savers and asset accumulation (such as homeownership). In 2011, REAL solutions will continue to focus on all of our program components. However, we will be working to bring two financial education programs to national awareness. The first is the credit union financial counseling certification program offered by CUNA, where credit union employees learn how to counsel members to better prepare for their future and to assist when they are faced with financial difficulties. We currently have 14 leagues indicating they will work with us on the program with several more in the decision process. Our second focus will be on reality fairs and getting more leagues to work with credit unions to host fairs.

We are also planning on conducting a comprehensive national study of credit union-provided financial education next year.

In addition to REAL Solutions, we also help fund Biz Kid$, the award-winning educational television show on PBS stations in 50 states. Biz Kid$ helps children to become financially literate and demonstrates the credit union difference.

We will also continue to fund innovative financial education grant projects in communities around the country. Whether it’s a league expanding a high school literacy initiative using National Endowment for Financial Education materials or a small credit union launching a one-on-one financial coaching program to low-income residents, our grants are changing lives every day by helping consumers reach life-changing goals.

Finally, we can't do the things we do without the support of people like you. As you think about giving back this holiday season, please consider the scale and reach of our programs. I think you’ll agree it’s money well spent.

At our website (www.ncuf.coop), you can support us by making a contribution, investing in the Community Investment Fund or by becoming a corporate supporter. Making a contribution will help us greatly as we look to implement many of these exciting plans.

After all, the more consumers understand their finances, the more people can achieve financial freedom.

Bucky Sebastian is executive director of the National Credit Union Foundation. Contact: 800-356-9655 ext. 6769 or bsebastian@ncuf.coop.