The 9% Solution: Growing Credit Unions by Banking on the Unbanked
by Robert McGarvey
A new report from the CFPB, “Consumer use of of payday, auto title and pawn loans,” underlines the magnitude of this issue. Nine percent of unbanked consumers are habitual users of high interest, high fee loans.
But that market size also gives credit unions—especially CDFI institutions with their overt community development focus but, really, just all about all credit unions with an active retail arm—a shiny, bright new member target that just may welcome attention from a credit union.
9% Is a Lot of People
That’s millions of consumers who may repay a helping hand with real loyalty.
How much loyalty? Samira Rajan, CEO of the $60 million Brooklyn Cooperative Credit Union, told us about a member whose loan had gone into default when she was deported. But flashforward a few months and that member was now in Arizona and she resumed paying on the loan.