In this week’s New York Minute, we’re diving into the latest news from credit unions across the state. From board member spotlights to industry awards and community initiatives, there’s plenty to catch up on.
Meet Our Board: Gary Gizowski
Learn about Gary Gizowski, President and CEO of Educational & Governmental Employees Federal Credit Union and a dedicated member of the Association’s board of directors. Gary has been a driving force in the credit union industry for over three decades, known for his passion for serving others and his commitment to the credit union movement. He has played a pivotal role on your Association’s board and in advocating for the rights of New York’s credit union members.
Read the full blog to learn more about Gary’s career, his insights, and his dedication to the credit union movement.
Inclusiv Awarded $1.87 Billion for Clean Energy Investment
The EPA has awarded Inclusiv $1.87 billion through the Greenhouse Gas Reduction Fund Clean Communities Investment Accelerator (CCIA) program. The program will prioritize communities that have historically faced barriers to accessing clean energy and financial services. This funding will enable Inclusiv to support credit unions in providing energy efficiency and clean energy solutions to low-income and disadvantaged communities across the country.
Inclusiv will use the CCIA award to provide grants for capitalization, staffing, training, and other resources to help credit unions build and scale effective green lending programs.
This will enable credit unions to offer loans for energy-efficient upgrades, renewable energy systems, and other clean energy projects to households and small businesses in underserved communities. Furthermore, Inclusiv will develop a consumer financial empowerment platform for climate resilience, providing resources and education to help individuals and businesses understand the benefits of clean energy and make informed financial decisions. The platform will also connect community lenders with minority- and worker-owned clean energy businesses, fostering collaboration and supporting economic development.
For more information on this program and what the grant means for Inclusiv, click below!
First New York FCU Celebrates 20 Years of In-School Student-Run Branch
Congratulations to First New York Federal Credit Union on the 20th anniversary of its in-school student-run branch program. This innovative program has been providing valuable real-world experience and financial education to students in the Capital Region.
The Schenectady City School District’s high school branch, the Patriot Branch, was the first in the region to participate in the program, which is exclusively offered through First NY FCU’s KIDS Banking Program. The Patriot Branch is staffed by student volunteers who provide banking services to their school district, staff, and colleagues. This experience helps students develop valuable skills and prepare for future career opportunities. Over the past two decades, students have gained hands-on experience as tellers, learned financial marketing and new account sales fundamentals, and earned rewards for their saving efforts.
Learn more about this program and the milestone below!
Photo courtesy of Schenectady City Schools
Mitigating Loan Delinquencies, Protecting Members and Strengthening Credit Union Resilience with Embedded Payment Protection Insurance
By Danielle Sesko, Director of Product Management at TruStage™
In today’s continually challenging economic landscape, more and more credit unions are becoming acutely aware of the potential impacts – and fallout – defaulting and delinquent borrowers pose. With the U.S. economy continuing to be affected by ongoing inflation, consumers’ purchasing power has been reduced, putting pressure on household budgets, and making it challenging for borrowers to repay their consumer loans. With some rate relief likely on the way, previous rate hikes aimed at controlling inflation have still increased borrowing costs considerably, further exacerbating debt management problems for members.
Consequently, the debt-to-income ratio (DTI) is also rising across all demographics, especially among lower-income earners who must allocate a larger portion of their income towards existing debt payments. Larger households are particularly impacted, facing exponential increases in debt obligations, including credit card and auto loan balances.
The statistics are stark. Recent American debt reporting has revealed that younger generations are struggling with debt more than ever, especially credit card and auto loan debt, with delinquency rates now exceeding pre-pandemic levels.
According to data from Debt.org, in December 20231, the average nonmortgage debt across different age groups includes:
18-29-year-olds: $69 billion total, $12,871 average
30-39-year-olds: $1.17 trillion, $26,532 average
40-49-year-olds: $1.13 trillion $27,838 average
50-59-year-olds: $98 billion, $23,719 average
60-69-year-olds: $64 billion, $16,661 average
70 and older: $36 billion $9,827 average1
These numbers further underscore the financial struggles faced by so many of today’s consumers. Credit unions understand that their members seek loans out of necessity – to cover unexpected expenses or make significant purchases like a vehicle or home. By gaining a deeper understanding of the underlying trends, demographic variations, and economic drivers affecting their members, credit unions could more effectively implement strategies to better mitigate risks and promote financial stability.
An increasing number of credit unions are adopting strategies like payment protection insurance to shield their members from vulnerabilities and unforeseen financial hardships, such as unexpected job loss or disability that could impact their ability to repay loans. The key lies in integrating this insurance seamlessly into the lending process itself – especially within the digital channels – without adding complexity or friction for members. This approach ensures payment protection insurance is seen as the valuable solution it truly is, one that aligns with members’ primary financial goals, helping to provide them with extra protection and peace of mind in an uncertain economy.
And it is not only the members who benefit. An embedded payment protection insurance strategy also helps the credit union. Not only does it help mitigate risk for the institution’s loan portfolio, but it also enhances member experience. In an increasingly competitive lending market, offering insurance that protects members against default due to unforeseen circumstances, enables credit unions to differentiate their services, expand their member base and focus on building relationships. By showing genuine care and a clear dedication to members’ financial well-being, credit unions can not only foster long-term loyalty but also create new opportunities to grow accounts and drive revenue.
Credit unions understand the rippling impacts and effects of defaulting borrowers and the necessity for a robust loan delinquency risk mitigation strategy, one that seamlessly integrates prudent lending practices, proactive risk management, and comprehensive data aggregation. By addressing the needs of both the institution and its members alike, an embedded payment protection insurance strategy may provide the financial security that supports members’ primary financial goals while also helping credit unions achieve their business objectives, ensuring a more sustainable and secure environment for everyone.
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Danielle Sesko is the Director of Product Management at TruStage. Danielle has been with TruStage for over 10 years and has held a variety of roles ranging from financial leadership to transformation and product development. Prior to joining TruStage, Danielle spent her career in financial services and Mergers and Acquisitions. Danielle currently leads TruStage’s Digital Lending Insurance initiative which is focused on creating new digitally native products for new markets.
1Debt.org, Demographics of Debt, December 2023
The views expressed here are those of the author(s) and do not necessarily represent the views of TruStage.
TruStageTM Payment Guard Insurance is underwritten by CUMIS Specialty Insurance Company, Inc. CUMIS Specialty Insurance Company, our excess and surplus lines carrier, underwrites coverages that are not available in the admitted market. Product and features may vary and not be available in all states. Certain eligibility requirements, conditions, and exclusions may apply. Please refer to the Group Policy for a full explanation of the terms. The insurance offered is not a deposit, and is not federally insured, sold or guaranteed by any financial institution. Corporate Headquarters 5910 Mineral Point Road, Madison, WI 53705.
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