Members’ Financial Needs Don’t Follow a Fairy Tale

It doesn’t take long for most adults to realize that the expectations they formed during childhood of fairy tale-like romantic lives were just that – fairy tales. Plenty of people don’t find the relationship they want until much later in life than they expected, if at all. Divorces happen, and are usually ugly and devastating. And every long-term relationship and marriage involves work and compromise.

Yet, the media we consume every day continues to feed us this narrative that without the perfect relationship and family, our lives are incomplete – even as reality continues to show us that not only is that goal difficult to achieve, it’s mostly out of our control. Thanks to the comparison culture created by social media, it’s easy for people who aren’t posting updates about engagement rings, weddings, ultrasounds and kids (mostly women) to feel left out and inadequate. In entertainment news, stories of engagements and pregnancies are always celebrated, while coverage of breakups and singles pushing 40 (again, mostly women) comes across as pitiful and shaming. Even small talk between strangers commonly and inappropriately turns to marriage and kids (believe it or not, I was recently grilled by a dental hygienist about whether or not I was married in our first meeting!)

And in the financial services industry, when institutions design offerings to fit various consumer life stages, they tend to follow a formulaic path: College, first car, marriage, mortgage, kids, kids’ college and retirement planning on a dual income. When discussing generational financial needs, there’s this assumption that “now millennials are married and having kids” and “Gen X is the sandwich generation, caring for both aging parents and children.” The financial needs of divorcees, single parents and middle-aged singles, for instance, are rarely highlighted.

Here’s the research-backed flip side to these persisting societal ideals: According to the Centers for Disease Control and Prevention, U.S. birth rates have steadily been declining over the past seven years, with 2017 representing the biggest drop at 1,765.5 births per 1,000 women of childbearing age over their lifetime (which is 16% below the number of births needed to sustain the population). Pew Research reports less than half (48%) of Americans ages 15 and older are married. And the median age of a first marriage is 27 for women and 29 for men, a jump from 23 for women and 26 for men in 1990.

In honor (or more accurately, dishonor) of Valentine’s Day 2019, I challenge credit unions to take a brief look at how they perceive, market to and interact with members who are not in traditional relationship and family situations. Here are a few scenarios that may require your staff to approach members with extra sensitivity, or question whether they’re subconsciously handling the situation in a way that may be perceived as discriminatory.

Divorcing members: Money is a common issue that catapults a divorce in the first place, and it’s also one of the first matters soon-to-be exes should get a handle on. On top of facing stress and painful emotions, divorcing members have to take care of potentially complicated transactions such as settling shared debts, refinancing a mortgage in one partner’s name and revising their investment portfolios. When dealing with these members, is your staff showing compassion, warmth and neutrality/? Are they communicating regularly with the members and ensuring a smooth process for their finances during what may otherwise be the most difficult time in their lives?

Unmarried couples borrowing together: Not every committed, long-term relationship involves a walk down the aisle these days. But some couples who forego marriage may choose to buy a home or vehicle as a united pair; in fact, 16% of first-time homebuyers in 2017 were unmarried couples, the National Association of Realtors found. If an unmarried couple approaches your credit union about a loan for a major purchase, are you treating them with the same level of respect as a legally-bound couple? Are you fully informing them about title options and risks without giving them the impression their relationship may be less stable because they’re not married? And if they break up and need to make adjustments to the loan, are you offering the same level of compassion as you would to a divorcing couple?

LGBTQ couples: As our Peter Strozniak reported in a recent print story, “Two LGBTQ Credit Unions in the Works,” members of this community face discriminatory obstacles when it comes to their finances. According to one report from two University of Iowa professors, the average loan approval rate for potentially gay applicants was about 3% to 8% lower and their financing costs were about 0.02% to 0.2% higher, even though there is no evidence of a higher default rate among gay consumers. It’s time for all credit unions to ask: How can we help change these statistics and stop financial discrimination against the LGBTQ community?

Singles planning for retirement: On one hand, those who are nearing retirement age single and childless are at a huge advantage – they may have saved a lot of money by not having kids. On the other hand, they may lack the financial security a spouse’s income may bring, as well as the built-in support network folks with adult children may enjoy. They’ll likely need to be more proactive about saving and investing over the years, and that usually requires help from an expert. Does your credit union’s wealth management or retirement planning program consider the specific needs of single members?

Single women planning for motherhood: With so many women finding themselves without a partner during their childbearing years, those who want to become mothers are turning to alternative options including sperm donors, adoption and egg freezing procedures. Unfortunately, none of these options are cheap (egg freezing, for example, costs around $12,000 plus about $600 annually in storage fees). Some women take out personal loans to cover these costs, but they may benefit more from a loan program specifically designed to assist with these types of expenses. Consider offering a financial assistance program for single women pursuing motherhood; and if you offer an adoption loan program, make sure singles, heterosexual couples and homosexual couples are treated the same.

Just as credit unions adapt to the changing landscape of technology in their industry, they must also adapt to the evolving ways consumers in our society are living their lives. Credit unions need to embrace all members, regardless of their lifestyle choices or circumstances, or risk becoming irrelevant.

Natasha Chilingerian is managing editor for CU Times. She can be reached at nchilingerian@cutimes.com.