CUs See Up-tick in "Peak Borrowers,"
But Is It At the Expense of Youth?

By Jon Haller
Director of Corporate and Market Research
Credit Union National Association

Credit unions are increasing their ranks of "peak borrowers" (members age 25 to 44), but appear to be slipping in their abilities to attract "future borrowers" (those 18 to 24) to their memberships. This, according to CUNA's 2008 Member Statistics research study—a precursor to its National Member Survey and Survey of Potential Members studies and reports, scheduled for release in April, 2009.

Over the past several years, many credit unions have been working diligently to attract more members in the peak borrowing ages, in an effort to improve their lending volume. Success in these efforts, combined with the initial signs of a long-awaited turnaround in the prevalence of peak borrowing consumers, are no doubt behind the first rise in peak borrowers that credit unions have recorded in more than two decades (see figure).

But while this is great news from a near-term lending perspective—the negative impact of the current U.S. economy notwithstanding—credit unions' gains in peak borrowers appear to be coming at the expense of any significant growth in future borrowers, who are one of the primary keys to credit unions' longer-term success.

Past CUNA studies have shown that non-members who are young adults are in the age group most likely to say they are eligible to join a credit union and least likely to be familiar with the benefits, advantages, and financial services that credit unions provide. As such, they comprise a large, attractive target—if perhaps a somewhat unwilling one, to this point—for credit unions' membership-growth efforts.

It's clear that a number of credit unions have recognized—some of them, years ago—the extreme importance that young adults hold for the organization's future, and have had tremendous success in bringing them into the fold. However, the credit union movement, as a collective group, appears to still have a great deal of room for improvement in this area.

Many of those that have attracted large numbers of young adults would no doubt say that it takes a fair amount of time, effort and especially, commitment—from the CEO, executives, and board, alike—to make this happen. If your credit union has yet to take these steps, there's no better time than the present to begin the process.

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