Pathway to Financial Well-Being

Ken Worthey: Good afternoon. Welcome to this NCUA webinar, The Pathway to Financial Well-Being. My name is Ken Worthey, I’m the Financial Literacy and Outreach Analyst
in the Office of Consumer Protection here at NCUA, and I will serve as your moderator for this webinar. Before we begin, I have some brief technical announcements to share with you. Please ensure the volume on your computer and in the webinar window is turned up. If prompted, please allow
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endorsement by, the National Credit Union Administration’s Board of Directors, its management or staff. In this webinar, we will explore how financial literacy, financial capability, and financial inclusion are three components that contribute to a person’s overall financial well-being. We will highlight how
credit unions are building successful financial literacy programs that are customized based on the credit union’s size and membership demographics. Specifically, you will hear from two credit unions that developed and implemented effective strategies to help support their members’ financial well-being. We will also provide a
brief overview of NCUA and other government resources available to augment credit union efforts to support the financial well-being of credit union members. At this time, I will introduce our guest speakers. We have with us Louisa Quittman, Director of the Office of Financial Education at the US Department of the Treasury, in the
Office of Consumer Policy; Vicki Hoehn, Vice President of Community Engagement at Royal Credit Union in Eau Claire, Wisconsin; and Tim Cerebe, Vice President of Community Development at Freedom First Federal Credit Union in Roanoke, Virginia. I am also joined by Gail Laster, Director of NCUA’s Office of Consumer Protection; Al
Brantley, Acting Director of the Division of Consumer Affairs; and Laura Todor, Program Officer for the Division of Consumer Affairs in NCUA’s Office of Consumer Protection. To get us started, Director Gail Laster will provide her opening remarks. Gail Laster: Thank you, Ken, and welcome to our audience and our guests. We appreciate your
agreeing to participate in this webinar and sharing not only your expertise in the financial literacy area, but also important tips and tools for enhancing financial education initiatives. As you all know, under the Federal Credit Union Act, promoting financial literacy is a core credit union mission. And while credit unions
serve the needs of the members and promote financial literacy within the communities they serve, NCUA works to reinforce these efforts, raise consumer awareness and increase access to credit union services. NCUA also participates in the national financial literacy initiatives including the Financial Literacy and Education
Commission, an inter-agency group created by Congress to improve the nation’s financial literacy. And Louisa, who is here with us today, coordinates Commission’s activity and will talk more about its work later in this webinar. Now before we hear from guests, I would like to briefly discuss the connection between financial
literacy, financial capability, access to affordable financial services and financial well-being. Now, there is a growing consensus that the best way to measure the success of financial literacy efforts is to determine whether there is meaningful improvement to an individual’s financial well-being, so you may be asking yourself
what exactly do we mean when we refer financial well-being. Now, from a consumer perspective, financial well-being has four broad characteristics. First, consumers feel in control of their day-to-day and month-to-month finances. Also, they have the capability, capacity to absorb a financial shock or emergency.
Third, they are able to stay on track to meet financial goals. And fourth, they have the financial freedom to make choices to enjoy life. And so in addition to financial literacy, consumers need the attitude, skills and self-confidence to make smart money management decisions that best fit their life
circumstances and they also need access to affordable financial services. Now, we should all know that April is Financial Literacy Month and so it presents an ideal time for credit unions to emphasize financial education and empower their members to live financially stable and healthy lives. Indeed, credit unions are
already putting their members on the pathways to financial well-being. Credit unions start – or many credit unions start – by offering financial education at an early age through experiential learning opportunities such as youth savings accounts, in-school credit branches and financial reality fairs in – I should say in-school
credit union branches and financial reality fairs. These programs help to develop positive financial habits in children and young people that can strongly affect their long-term financial well-being. Now, many credit unions continue this work by delivering a combination of the right financial product with the right guidance as the
members ages into other life stages. For example, when a consumer is ready to finance the first vehicle or a home, credit unions often provide affordable auto and mortgage loan options with financial counseling. Not only will these types of engagement help your members make better informed financial decisions, but it also strengthens your credit
union’s relationship with its members and this will ultimately contribute to your credit union’s bottom line, because an informed financially capable member is able to fully utilize the array of products and services that your credit union offers. So another component of financial well-being is financial inclusion. And then by that we
mean access to affordable financial services. This is an essential step to helping consumers build financial security and improving long-term financial outcomes. Now, low income, underserved and unbanked consumers are especially vulnerable to exclusion from basic and traditional financial services, including
access to affordable credit. But credit unions are uniquely positioned to help underserved and unbanked individuals. And at the end of 2015, 2,297 credit unions had NCUA’s low-income designation. And many times these credit unions are the only federally insured depository
institution serving low income in economically distressed communities. Low-income credit unions offer a wide array of loan and deposit products and services to support these communities as well as different types of credit counseling and financial education classes. Now, to support credit unions’ financial
inclusion efforts, NCUA and the Treasury Department recently signed an agreement that will streamline the application process for low-income designated credit unions to become certified as Community Development Financial Institution. Credit unions that obtain CDFI certification have access to grants and other financial
resources that allow them to develop unique products and services to meet the needs of low-income members. And indeed, some of our guest speakers today will provide additional insight about how CDFI resources help support financial inclusion. So, thanks, Ken. Ken Worthey: Thank you, Gail, and now we welcome our
first speaker, Louisa Quittman, Director of the Office of Financial Education at the US Department of the Treasury in the Office of Consumer Policy. NCUA works closely with Treasury and the Financial Literacy and Education Commission to support ongoing efforts to improve financial well-being in the United States. We are happy that Louisa could be here
to discuss federal financial inclusion efforts and to provide an overview of natural resources that are available to credit unions. Louisa Quittman: Thank you. Thank you for inviting me to join you today and be a part of this very, I think, very productive conversation. So I’ll just talk a little bit about why we’re concerned with financial inclusion at the Treasury
Department and then really talk more about some resources that credit unions can use to promote financial education, financial capability and financial inclusion in your communities. Just real briefly, at the Treasury Department, we realize that there is nearly 10 million households in the US that are not connected to a bank or credit union and
millions more that are routinely using alternative financial service providers to meet their needs. And I think Gail very clearly defined what those needs are. We think it’s important that financial inclusion can really address the needs of these populations by building financial capability for making financial decisions over the
lifetime providing tools and resources to help people manage economic shock and build a resiliency and to make available good financial products that create a virtuous asset-building cycle rather than one that saps income, assets, and wealth. Just to talk a little bit about the CDFI Fund resources for
credit unions. The Community Development Financial Institutions Fund, CDFI Fund, has the mission of increasing economic opportunity and promoting community development investments for underserved population and in distressed communities in the United States. And out of over 1,000
total certified CDFIs, more than 20%, or 270, are credit unions. And there is a Financial Assistance and Technical Assistance program available to provide grants and other forms of funding to provide – to expand the services and build the capacity of CDFIs. You should know
that in the 2017 budget, the President has proposed expanding funding the CDFI Fund, including a new $10 million loan fund for small-dollar loans. And, as Gail mentioned, the Treasury Department is working with the National Credit Union Administration to double the number of certified
CDFI credit unions. We will also be working to promote the use of the CDFI Fund programs for financial services and financial education and to build financial inclusion. The CDFI Fund is working to revamp its 2017 application to encourage more requests from organizations that focus on financial
inclusion and raise awareness so that CDFIs can partner with reach-out financial institutions to offer services. Such partnerships may enable CDFIs to deliver more innovative technology-based products in the communities where they are needed. Beyond the resources of the CDFI Fund, Ken mentioned, and Gail mentioned as
well, that the Treasury Department chairs the Financial Literacy and Education Commission, which is comprised of 22 such federal agencies from across the government, including the NCUA and other regulators with the goal of coordinating financial education activities. The FLEC as we call it supports the Mymoney. gov website
which contains free financial education resources from across the government on a range of topics and for a range of populations. And the Mymoney. gov website also contains the FLEC Research and Data Clearinghouse. And the FLEC is really focused in recent years on the idea that it’s best to start young and
continue to provide financial education across the lifecycle but certainly to reach people in their families, their schools, in their communities and both learning key financial concepts and gaining hands-on experience. You’ll see on this slide a list of financial education resources from the FLEC, particularly focused
on children and youth and on post-secondary education and making those important choices about higher education. You will see again that Mymoney. gov website provides resources. Beyond these resources, the FLEC has also been working to coordinate across agency programs. And to just given an example,
the FLEC realizes that a young person’s first job, even a summer job, is a great time to make sure they build their financial skills and habits that they’ll need across their lives. And so we have been working with the Department of Labor and their funded workforce programs to connect those workforce programs
to both high-quality financial education and safe transaction products for young people and it’s a great opportunity for credit unions to engage in reaching the next generation of young people and connecting them to financial education and high-quality financial products. Finally, the Treasury Department has developed
a new product to fill a gap for retirement savings, which you may know is a very large gap, especially for people who don’t have access to workplace retirement savings. We’ve created myRA product, which is meant to be simple, safe and affordable way to help people start to save for their future. It’s
essentially a Roth IRA that is set up through automatic contributions from a paycheck, from direct deposit or even at tax time. And the account is portable for the individuals, so if they change jobs, the account stays with them. There’s no risk of losing money, because the investment is invested in Treasury securities
and backed by the US Treasury and the account earns a rate of interest commensurate with that. And the account is free to open and has no minimum fees. And individuals can contribute whatever amount they like on a regular basis and starting with that. So it’s a – the myRA product is a – there’s more information on about the product
if you’re interested in making that available in your community. I’ll just conclude reiterating that credit unions have an important role to play in financial inclusion. They can build financial capability by making – for making decisions over the lifetime. They can provide tools and resources to people in their communities to help them manage
economic shocks and build economic resilience and they can make available good financial products that create a virtuous asset-building cycle rather than one that saps income, assets and wealth. We have a number of resource available and I know you’ll hear about resource available from the NCUA, but you can see the Mymoney. gov resources
and financial education resources, the CDFI Fund programs can be found at CDFIFund. gov and you can learn more about myRA at And I’ll just end by reminding you that April is National Financial Capability Month so now is a great time to get started. Thanks. Ken Worthey: Thank you, Louisa. We will
now transition to our credit union representatives. First, you will hear from Vicki Hoehn, Vice President of Community Engagement at Royal Credit Union. Ms. Hoehn will focus on her credit union’s youth financial literacy initiatives. As Gail mentioned earlier, these activities provide experiencial learning opportunities for youth that
help contribute to long-term financial well-being. Ms. Hoehn, thank you for being with us. Would you provide a brief overview of your credit union’s youth financial literacy efforts? Vicki Hoehn: Certainly, thank you and hello. First, let me share a little bit our credit union, Royal Credit Union was formed in 1964 for the
employees and families of the local Uniroyal plant. Today we are community chartered with $1.6 billion in assets We have 24 offices and serve 160,000 members. Our field membership 18 counties in Western Wisconsin and 12 counties in Eastern Minnesota, including the Twin City metro. As indicated, I’m going to
talk about our school site program. We call it School Sense. Royal Credit Union’s program began years ago when a parent read an article in a Good Housekeeping magazine and it talked about this program called Save for America. The parent approached their school’s principal with it and the program itself then was designed to just say reach
out to the financial institution, have them fund your program and use your PTO parents to run the program. The principal contacted Royal Credit Union since we had an office about a block away. That was 1992 and I was fortunate enough to be the one that was contacted and a few short months later, our program was launched. But we didn’t want
it to be just about savings. We wanted it to be an authentic learning experience, so we decide that the students should run it, not the PTO, and we treated it like a branch and we hired the team. We incorporated job applications, interviews and we trained the students at our facility just like any Royal team member is trained. They learned about
confidentiality, handling money and how to do the transactions on the computer system. Our schools sites are connected to our network and all the transactions are conducted live. We do, however, have adult mentors standing by to help the students with cash counting and the data entry. The whole process from start to finish is very important
and a great learning experience for the applicants whether they get the job or not. So here we are 20 years later and our program has 28 school site locations. We have six in high schools, five in middle schools and 17 in elementary schools. We have 350 student team members annually, 18 of which work in our
high-school program and are trained and hired as regular team members. They also work evenings and weekends at our full-service branch locations. We have six staff members who work exclusively for this program to work full-time and four are part-time and this is our core team that run the majority of our schools. But because the footprint of our credit union
is pretty large, we do have some of our schools that are more than an hour away from our corporate location. So in those instances, we have branch team members in those communities work the schools. And this is really important because they know their community, they have kids in the schools, they know the faculty and they can help build the relationships in those communities
as well. So why do we do it? Well, it’s our core purpose at Royal to create a positive impact on lives we touch and this program like said already offers students hands-on experiencial learning opportunities and we put our core business right in the school. And the goal of our program is to provide financial capabilities to the students and help prepare them for the
future. In fact, a couple of years ago, to help validate our program, we participated in a national study sponsored by the US Treasury Department. It was called Assessing the Financial Capability Outcomes Use Pilot. The study was to research the effectiveness of the strategies used to teach money and money management to students and we really want to participate in this study
for a couple of reasons. First, this is a great opportunity for us to bring financial education into the classroom. With our program, we offer a number of classroom presentations but it’s a hit or miss since we are invited by the teachers if it fits in their curricula. We never get to teach all the students. And the fact that this study included every single fourth and fifth
grade student in the Eau Claire area student district was going to receive a curriculum was very important and exciting to us. The study, however, though was structured that several classes would be control groups that didn’t get the financial instruction, but we as a credit union to do the right thing decided at the beginning and promised the school district that
after the study was over we’d come back in and give those classrooms that didn’t get the education the same opportunity to learn. And secondly, we want to participate for the facts. As you all know, it’s an investment for financial institutions to operate these Save at School programs and are hopeful that the research would show that these programs, coupled with in-classroom
education help children become more financially literate. You see every time we’re asked to open up a new site, we first have to get approval from our executive team and our Board of Directors, and obviously they’ve been wonderfully supportive because we have 28 sites. But just imagine how much strong our proposals are if we had the research to prove that these programs work. And lastly,
this is a great opportunity for staff development. We had over 20 team members from Royal take part in some way over the course of the two-year study, our compliance, IT, marketing and, of course, our education team. We started off by hosing the curriculum training for the teachers at our corporate center, but not all teachers at the end were really comfortable teaching this subject,
which in and of itself is kind of sad. But out of that 10 of our team members got the opportunity to teach this five-weeks course in the school and then, of course, we went back in and did the classroom instructions for all the control group classes. But the connections that we made with the students in the classrooms were real and it was very powerful to witness their financial awareness grow.
These students were so excited to tell us about their progress each week. Many would tell us that they talked about their savings plan with their mom, their dad or their grown up at home. It was a very meaningful process for all of us, and we’re very proud to take part – place in this research, but the conclusion of the research was that education is key and having the capability and
access to the financial in the school really facilitated ownership and knowledge retention. And for your information, the result of this study are publicly available. We have a link to it on our website, which is rcu. org, it’s under our Investment and Savings tab and then under RCU School Sense. Or you can find it as well in Treasury. com. So how do
we do it? Well, there’s lots of internal cooperation from our board, our executive team, multiple departments within the credit union, like IT and marketing and operations. And, as you know, these ventures are not money-makers, but it’s easy to sell this to your board and executive team because of the financial education component along with the collaboration
and the relationships that are built with the schools. And speaking of the schools, their support is huge. Our program is a mature program. We’ve been doing it, like I said, for over 20 years. And our success with the first one was key since the growth has happened originally. We don’t approach schools or go out and sell the program. Schools approach
us. Principals are onboard and supportive and key to the program is that dedicated school liaison, someone with more time and a true champion for the program, because they help us weed through the applications. Some of our schools, we get 50 to 70 applications for 12 positions. And then they participate in the interviews and then they schedule the students to make sure
they know when they work. And, of course, as you can see from the picture, we provide these really fun tie-dye shirts for the kids along with names tags and they wear it proudly. Internships are also key. Most of our successful high schools have formal internship programs and the workers are enrolled in those programs and then we get them from there. It gives it structure, it creates partnership
between the credit union and the school and it really helps justify again having a business in the school. And we strongly recommend to talk to the school early, get them to get their school district and their school board involved about opening a school-based financial institution. With every community we’ve gone into, we’ve received some pushback about why a school district would allow a
business in the school. But we’ve worked it out. Again, it’s about that financial literacy and the study, again, has really helped us provide the facts. And when we’re working with new schools, interest in opening, one of the things we recommend is that they go through an RFP or a request for proposal process. It makes things cleaner, it sets clear expectations for both sides. And we required
a signed agreement especially for going into a high school because we usually start some construction there. And because of that we like to have a three-year commitment on the RFP as well. And when – as far as the account, which we talked about earlier that having an account available is very important. Our account for the students are opened in the child’s
name as the primary owner. We put the parent as the guardian as joint. Then the child knows it’s theirs, their names comes up first, they take pride in it and for the students that join our program, we have a $5 minimum requirement to open. We put that into the account for them, so that it’s affordable for all students. We also provide them a stamp card
with 12 stamps on it and the students get a stamp for every deposit or withdrawal, and we do allow withdrawals, but they have to have a parent signature, and the deposits can be anywhere from penny on up, we don’t care. But they get four stamps, they can get a prize. And then if they wait for eight stamps, they get even a bigger prize and with 12 stamps, even bigger. So we’re
really trying to teach them that sometimes it takes longer to get what you want and you have to save. And since the schools are key to the success, we also have an incentive program for the school. So for every 500 transactions – less for smaller schools – we present the school with a check for $250 that they can use however they deem important. One thing to note though at the
end of the school year, we carry over any transactions to the next year, so if they were at 490, we would carry that over to the next year and so they get a check almost right away. Next slide, please. So quick rundown on our numbers. The high school program has been a nice hiring avenue for us. Out of the 102 interns over the past 12 years, we’ve
kept over 25 of them working on over the summer to help our branches during our busy vacation season. We had 10 current team members who came through our high school program, including our compliance auditor, our tellers, and some account reps. One of our current financial education representatives who actually worked in the school
was part of our elementary program many years ago. And just a month ago, I hired a UW intern from Eau Claire who told me at our interview that she was one of our team members in fifth grade, which was really exciting. And as you can see from the slide, we’ve hired over 3,000 students during our 22 years. And from the
transactions side, which is why do it, other than trying to get kids in the habit of savings, we completed 17,000 transactions for nearly $530,000 in deposits in our program. Though we certainly don’t do our programs to receive awards, you can see on this slide that it’s great source of pride for us. We were named the 2015 Community Credit Union
of the Year this year and a big part of our story was centered around our financial literacy activities, including our School Sense program. But the biggest impact is the better educated future consumers who know the importance of savings. Next slide, please. But our program, again, isn’t all about the savings. It’s also important to get into the classrooms that in front of
those organizations and groups and teach financial literacy. Our school site program has been a valuable tool for us to make those connections, build those relationships and expand our capacity to reach many levels of students, parents and individuals with these educational opportunities. We’ve had the opportunity to connect with the Boys and Girls Club, with those students
that don’t attend one of our school sites. And then we’ve been invited to the county jail to talk to some incarcerated woman, to help them tackle their finances and give them a better chance once they’re released. Having a school site program has really been key to all of these successes for us and if I can answer anyone’s questions afterwards, I’d be happy to, but thank
you very much for this opportunity. Ken Worthey: Thank you, Ms. Hoehn, just a quick clarification. The Treasury site is actually Treasury. gov for your information on the study that you mentioned in addition to the Royal Credit Union site. Now, we will transition to questions. Al Brantley, Acting Director of the Division of Consumer Affairs in the Office of Consumer
Protection has some follow-up questions for you. Vicki Hoehn: Okay. Al Brantley: Ms. Hoehn, how do your efforts go beyond financial literacy such as offering life-cycle products and services and fostering member retention? Vicki Hoehn: Well, we have a couple of products that we’ve developed a few years ago. Our main checking account is called Smart
Checking, but we have a Smart Start Checking account, and with that checking account, we have an Oops NSF Forgiveness. So as students and people under the age of 25, this was geared towards, write checks and bounce them, we forgive them at least two times per year and then we provide them with tools and direct them to our website to say that
now there is balancing opportunities, and there are some educational tools there. And then we also try to get them to set up auto transfer so that they don’t get NSFs from their accounts and we do have overcheck – overdraft protection as well and we don’t have any fees or transfer fees with any of those. Our accounts are basically no fee
accounts. And then with that 25 and under crowd, we have interns at all the university campuses that go into classrooms and do education. They sit in the classrooms, outside the classrooms, they do Facebook posts and tweets and lots of education to that particular demographic as well. Al Brantley: Is your program scalable? Would a smaller
size credit union perhaps with limited resources be able to offer this program or a variation of the program? Vicki Hoehn: Oh definitely. You know, I think the largest expense for our program is our staff time and the commitment to that resource and we’re in lots of schools and we’re doing a lot of – twice a day, twice a week with the high
schools, three – five times a week with one of our high schools. I mean you could do every other week, you could do, you know, try once a month if you wanted to. I think you could cut back and do it less often. The other cost of the program is really those incentive prizes. But you can use any local or online vendor to purchase very inexpensive prizes. You know,
the kids – kids are really easier to please, so I don’t think you have to spend a lot of money. And then the incentive to the school, I mean, we have some schools that, you know, get a $1,000 or more a year with their transactions, but others then only get $250, and you certainly don’t have to do that part of that program. We just felt we got better
buy in from the schools when we were rewarding them with it as well. Al Brantley: What role then can your state or fed regulator play in supporting your financial literacy programs? Vicki Hoehn: Well, every time we open up one of our school sites, we do have to get our approval from the Department of Financial Institutions, so, of course, continued
support of that is important for us, so we definitely want that to stay in place. And we’re provided with a lot of resources and support from our federal agencies. I would love to see that continue. I would not want to see that drop at all. So providing those resources and support I think is key. Al Brantley: Thank you, Ms. Hoehn, for sharing the success of your youth financial
literacy program and emphasizing the importance of providing financial learning opportunities for youth at an early age. We certainly appreciate your feedback on these important objectives. Now, Ken, back to you. Ken Worthey: Thank you, Al. Our next speaker, Mr. Tim Cerebe, Vice President of Community Development at Freedom First Federal Credit Union
will discuss some innovative programs that combine access to affordable credit for underserved and unbanked consumers with financial literacy. Also, similar to how Ms. Hoehn at Royal Credit Union works with schools as their local partner, Mr. Cerebe will discuss how his credit union works with community partners to achieve its
financial literacy and financial inclusion mission. Mr. Cerebe, thank you for adding to this important discussion. Would you mind providing an overview of your program? Tim Cerebe: Thank you so much, Ken. Very happy to be here, part of this conversation. So little bit of background on Freedom First Federal Credit Union. We
are located in Southwest Virginia, Roanoke, Virginia, to be specific. We were chartered in 1956. Actually started off as an employer-based credit union with GE. We are now a community charter serving a five-county area. Currently have a little bit over 46,000 members and a little bit
over $400 million in assets. We are a CDFI and low-income designated credit union. And just to give you a little overview on our financial education programming, we do offer group sessions, one-on-one counseling. We do have a full-time community educator
on staff. Currently our staff, we have four FiCEP-certified financial counselors and three more are currently being certified. Over the past two years, 2014 and 2015, we completed over 508 sessions, reaching a little bit over 3,354 participants.
And Freedom First, we really see financial education and financial literacy as extremely important components to households being able to achieve their financial well-being and we incorporate them into many of our programs. Two of those programs we
mentioned, Responsible Rides. Responsible Rides is affordable car ownership program for low-to-moderate income earners, which includes education classes on finances, budgeting as well as car maintenance. Now that partnership actually started between ourselves and a local action
agency called TAPS, Total Action for Progress, and now includes three local action agencies and some hand-picked local car dealerships. Our community is largely rural and we have been able to identify transportation as a major hurdle for many of the low- and moderate-income households in
our communities. That program, we do have a full-time inhouse Responsible Rides coordinator. Having that coordinator really allows us to take a holistic approach because we know that transportation is often just one of the challenges for the households that we get in front of. We do require, as part of
that program, before the individual can get their car loan and get that new vehicle, we do require financial education, which includes a group session. We cover vehicle maintenance as part of that. We have some great local partners here from Goodyear and Firestone, they come in and volunteer their time
to teach the vehicle maintenance portion of that. We also require a one-on-one session with our financial educator. And for that program, in 2014 and 2015, we were able to get 165 individuals into reliable transportation through the program. Now, another program that we incorporate
financial education and financial literacy into is our workforce development program. Several years ago we identified another key area in our community that we really wanted to help with. Unemployment is slightly lower than the national average here if you look at all five of our
counties, but inside our Roanoke city limits, it’s actually higher than the national average. And many area experts have identified this as a skills mismatch issue more than just a lack of available jobs. And we were able to identify and understand that many certificate and even certification programs
for workforce development do not qualify for traditional financial aid mainly because they are not part of a degree program. So for individuals that are looking to pursue these type of programs, they really have some limited funding options which is why we created our workforce
development loan program. It began a few years ago as a partnership with one of our local community colleges and a local truck-driving school called CDS. The CDS partnership has been very, very successful. They do a great job, they screen applicants and they send us individuals that need financing. Through that
program that we built, we’re able to provide flexible financing, which includes pushing off their first payment for as much as 60 days, which allows the students to really focus on their training. Also, in meeting with the folks over at CDS, we designed a financial education seminar to specifically address
the unique challenges that come with being on the road as a truck driver. Our community educator, she teaches this one-hour seminar with every single CDS class and CDS, they start a new class about every two weeks and we’re able to provide that financial literacy
effort through those classes. That program again has been very successful. Between 2014 and 2015, we issued 121 loans for about $464,000. Average loan size is just under $4,000 and we’re currently expanding that program into other areas
including healthcare certifications, wellbeing, and other job readiness programs as well. Ken Worthey: Thank you, Mr. Cerebe. Now we will go back over to Al Brantley with some follow-up questions for you. Al Brantley: Thank you, Ken. Mr. Cerebe, could you take a moment
to elaborate more on the national, state or local partners you work with to reach the underserved and unbanked? Tim Cerebe: Yes, absolutely, Al. And that’s a good question because we really here at Freedom First, we believe our success and our ability to effectively serve our community is really dependent on having some great
community partners. I mentioned some of them with the local community college, the local truck driving school and some of our local action agencies. There’s two other partnerships that I’m really proud of that do include the financial education and financial literacy piece as well. One, we partner with our local United Way for a
Bank On program, Bank On Roanoke Valley. That program is really designed to reach the unbanked and underbanked members of our community. Research has shown us that the average unbanked individual will pay about $1,000 per year in alternative financial services and that really equates to about
$40,000 over the lifetime. And so it’s really to get those individuals banked and into the financial system. We also do provide the financial literacy training for that program. Another program that we’re able to participate with is a partnership with the National Federation of Community Development
Credit Unions. They have a pilot program. It’s – the name is very similar to the name of this call, it’s Pathways to Financial Empowerment and that pilot program is designed to help low and moderate income consumers move along a pathway to financial stability and asset development through counseling combined with
safe and responsible products and services, so it really neat to be part of those programs as well. Al Brantley: What are some specific financial products you make available to help meet the unmet needs of the underserved and unbanked? Tim Cerebe: Yes, I really believe that having those specific
financial products is key. It’s one thing to be able to provide financial literacy and financial education, for example, giving advice on how to fix damaged credit or how to establish credit. It’s something completely different to be able to provide that literacy and that education but then also have the
products and services to back it up. A couple other programs that we have here; one is a payday alternative loan. We designed that payday alternative loan to look like a payday loan, to act like a payday loan, but without the payday loan fees or interest rate. We really understand that some folks in our community
are just more comfortable with the way payday loans have worked, because that’s what they’re familiar with, so they’re not having to get used to something new, but we’re able to provide them a much more responsible financing option. We do have credit builder programs to help individuals either reestablish credit
or help repair credit and another loan program that we have is a borrow and save loan which has the lending component but also has a savings component to it where after that loan is paid off, the borrower does have funds that are placed into their savings account. And with that program, we’re
really hoping to change some behaviors and hopefully get folks a little bit more comfortable with making constant contributions to a savings account. Al Brantley: So how do your efforts go beyond financial literacy such as moving your members toward more traditional financial products and services? Tim Cerebe: It really
goes back kind of the what I described earlier, having that holistic approach. It’s matching that financial literacy and the education with the appropriate products and services. It’s also being able to identify and address other household needs that are making it challenging to obtain that financial stability. We know that sometimes the
most pressing need may be transportation, but there may be other needs as well and we want to make sure that we’re not just addressing one of those. You know, we’ve got some really good success stories here of individuals that went through multiple programs that we have. Just last year we had a individual that
was one of our original Responsible Rides participants for that car ownership program, worked with them for several years with some ongoing counseling and education and then they were able to take advantage of our affordable home ownership program last year as well. So a lot of really good success stories like that, but
it just goes back to taking that holistic approach to the members. Al Brantley: Is your program scalable? Would a smaller sized credit union perhaps with limited resources be able to offer this program or perhaps a variation of the program? Tim Cerebe: I believe so. The two programs I mentioned, I do believe they are scalable. Now I will
tell you with the Responsible Rides program, it does carry a very heavy administrative burden. These households are often very financially volatile households, but also our Responsible Rides coordinator does a really good job of establishing relationships with these members. So having that full-time Responsible Rides
coordinator I believe is key for that program. With workforce development, I believe that’s very scalable, especially if you have the right partners involved and we’ve been able to identify those great partners in our local community to help with that program. Al Brantley: What role can your state or federal regulator play in supporting
your financial literacy programs? Tim Cerebe: That’s a very good question and I’m going to have to agree with Vicki over at Royal. I think she hit the nail on the head. Just keep providing those tools and support. You know, we know that the financial world is every-changing and we ourselves, we like to
consider ourselves students or financial literacy and so those tools and support are much appreciated. Al Brantley: Thank you, Mr. Cerebe, for sharing your financial literacy and inclusion program activity and highlighting the community partners you work with. Now back over to Ken. Ken Worthey: Thank you, Al. Before we move to
our next presentation, just a quick note on the questions we are receiving, wonderful questions. We only have time for the ones that we’ve asked and but we will provide the contact information for our speakers as well as NCUA at the end of this presentation. Now, we will hear from Laura Todor, Program Officer for the Division of Consumer Affairs
in the Office of Consumer Protection. Laura will briefly outline some of the resources available to credit unions that help support the financial well-being of consumers. Laura Todor: Thank you, Ken. NCUA’s consumer website, MyCreditUnion. gov and micro site Pocket Cents, provide consumers with timely and practical financial tips, interactive
learning tools and financial calculators. Content on these sites is organized to provide information resources to consumers at various stages during their lifetime as they prepare for various life events. For example, your members can find helpful information on such topics as how to start saving, paying off debt, reading a credit card statement, and understanding
what is contained in financial disclosure and loan applications. NCUA’s educational content is available in multiple formats including web articles, downloadable brochures, videos, interactive learning tools, and social media. The NCUA Consumer Report video series is available on NCUA’s YouTube channel. The videos provide information on
a variety of current topics such as how share insurance covers work, avoiding frauds and scams and understanding payday loans in a short consumer-friendly format. NCUA also provides a calendar of annual financial literacy events, topics and opportunities that clients can promote and participate in throughout the year. This calendar is regularly updated
with new information. To help support financial literacy outreach and awareness efforts, NCUA hosts Twitter chats with consumers and credit unions on various annual financial literacy events such as those listed on the calendar. Credit unions are encouraged to join these chats to share ideas, offer financial literacy expertise and encourage member participation.
Credit unions can also – may also use MyCreditUnion. gov, Pocket Cents, the Share Insurance Estimator, and our new interactive learning tool, World of Cents, to enhance financial literacy outreach to members. Some examples of how credit unions can use NCUA’s resources include displaying a link or graphic or MyCreditUnion. gov on
the credit union’s home page or on brochures, flyers and in-branch displays. Also, consider adding MyCreditUnion. gov Pocket Cents, the Share Insurance Estimator, and the other NCUA products as part of your credit union’s member education resources. Many of our resources including MyCreditUnion. gov, Pocket Cents, and
the Share Insurance Estimator are also available in Spanish. Also, our consumer Twitter feed @MyCUgov provides daily personal finance tips and best practices for consumers. We encourage you to follow and retweet our consumer Twitter feed @MyCUgov to help increase awareness of important personal finance matters.
And remember to visit and bookmark MyCreditUnion. gov and Pockets Cents. And one more item before I conclude. Available now on MyCreditUnion. gov is a new interactive infographic on What is a Credit Union? Feel free to use this infographic to educate consumers about how credit unions are different from other financial institutions. And finally,
NCUA is available to recommend financial literacy materials to assist your credit union with providing financial education resources to schools and local organizations. You may request NCUA’s assistance by sending an email to [email protected] gov. Ken? Ken Worthey: Thank you, Laura, and thank
you to all our participants. Director Gail Laster will now provide some closing remarks. Gail Laster: Thanks, Ken. And as you can see from our next slide, I wanted to make sure that there is a quick reminder to all of you in credit union land about
reporting your financial education services activity through the credit union profile. As you know, with every cycle of the call report, credit unions must review and certify their credit union profile. And on the profile page, credit unions indicate whether they offer financial
literacy workshops, financial counseling, financial education, in-school branches and first-time homebuyer programs. And this data is very important and it helps inform NCUA and other stakeholders about the important financial literacy work credit unions are doing nationwide. It is possible
that credit unions are not drawing enough attention, we find, in terms of their financial education efforts. Therefore, credit unions offering such services should ensure that they are capturing this information accurately on a quarterly basis. And again, turning our attention to the slide,
it indicates that as of December 31, 2015, nearly 46%, or 2,745, of all Federally-Insured Credit Unions offered financial education services. Now, I must tell you, we think that this number, frankly, is low and people are underreporting their activities. And as I said, you really should
make an effort to remember what you do. What you might consider to be customer service, what you might be consider to be just the good practice in terms of activities that your employees are doing in terms of helping your community. All these things really should be captured on the Call
Report and the credit union profile. And again looking at this slide, of these 46% of Federally-Insured Credit Unions that were offering financial education services, they had total assets of $997 billion with an average asset size of $363 million
and a combined membership base of $83.8 million. These financial education services reached approximately 82% of all credit union members. So, hope that gives you some food for thought. And I hope you indeed are continuing with all your activities
and just make sure that you’re reporting them accurately. So, again, just to sum up, I want to thank again all of our speakers, particularly, Louisa and our credit union community. I think they were really well informed, they’re doing some wonderful things and they took the
time to explain what they’re doing and tell you that the highs and lows, the difficulties. Because we realize it’s not always easy to do good, it’s not always easy to accomplish our mission. But I think you’ve heard from some folks who were very passionate about what they do, because that is part of the credit union
way; to be passionate about serving our community and our members. So, again, thank you for all of that. And thank you, audience participants who took the time out of your busy day to listen to this webinar. And at this point I’ll just turn it over to Ken for information about how to contact us, because as he indicated, we recognize that
you might have some questions, but we hope that through the presentations, which we thought, particularly from the credit unions were very thorough and that the questions that were asked and answered. Then the presentations from Louisa about resources and products and the presentation from Laura about NCUA
services that we frankly should have addressed most if not most of your questions, I can’t say all. But if any do remain, you know that we’re here for suggestions on ways – your suggestions on how we can support your financial literacy efforts, your suggestions on what you like to see from your federal regulators
in terms of increased efforts, your accomplishments in terms of what you’re doing in financial literacy. All those things are very important to us and we do appreciate it when you take the time to share that information with us. So, Ken, I turn it over to you for closing remarks. Ken Worthey: Thank you, Gail.
As Gail mentioned just now, on screen now is the content information for our speakers as well as NCUA. Please feel free to take this information and follow up with any questions you may have. This concludes our webcast. Thank you to everyone for joining us and in the near future we will
announce when the archive of this webcast is available. Please visit MyCreditUnion. gov for updates. Thank you and have a wonderful day.

One comment on “Pathway to Financial Well-Being”

  1. Biswajit Mandal says:

    Gaziabad your own office is there Sir.

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