Credit unions are not-for-profit financial cooperatives owned by and operated for the benefit of members they serve. Credit unions provide resources to their members and families to help them obtain financial well-being. This includes improving financial education, food security, housing security, and more. Learn how Kentucky credit unions are working to achieve this mission from Kentucky Credit Union League President Debbie Painter.
“We have a Short Term, Small Dollar Loan product that serves as a payday lender alternative called our Smart Choice Loan. Our product is designed to help members who need a small dollar loan for emergency situations, ideally until they receive their next regularly scheduled income check. Our goal is to educate members on wise financial management and budgeting so that the need for such emergency loans diminishes over time. Our maximum amount is $550.00 for a period of 30 to 90 days, and we allow no more than 3 Smart Choice Loans in any rolling six month period. We do require the individual to take a financial education session upon the third request.”
“We have two high school branch offices located in Louisville at Southern High School and Doss High School. These are fully operational credit union branches ran by high school students. We host a summer intern program every year for 25 students entering the Class Act Academy of Business & Finance. New this year, we have added a High School Coordinator (a paid CU employee) at each location to oversee financial education and marketing students assigned to the program.”
“We work with a local church to provide payday lending alternatives. The purpose of the loan is to get people out of the payday lending cycle. We will loan up to $1000 to a person (member) at a rate that is just 2% above our lowest share rate. They agree to make monthly payments and are counseled on finances. The church backs the loan and will pay the loan off from their benevolent fund if the member stops paying. We are planning to open this program up to other churches in Frankfort, Georgetown, and Louisville.”
Credit unions employ nearly 2,300 people in Kentucky. Employees of credit unions help stimulate the local economy, pay state and local taxes, and contribute to the overall well-being of the state’s economy.
Kentucky credit unions and their members make substantial contributions to tax revenues. In the most recent tax year, Kentucky credit unions generated over $106 million in tax revenue through their economic activities such as contracting employees, purchasing, and credit union employees spending in the local economy.
On the local level, over $38 million was generated through their economic activity— all of which helps fund schools, roads, and other vital parts of our state’s economy and infrastructure.
Kentucky’s not-for-profit, member-owned credit unions delivered $101 million in direct financial benefits to consumers in 2019. Not surprisingly, in 2019, memberships in the state’s credit unions increased by over 4 times the rate of Kentucky’s population growth. More people are choosing credit unions every day.
Kentucky credit unions are working with the State Treasurer to fund an educational course for high schools to teach students about money, personal financial management, and other aspects of finances.