Personal Loans and Purpose: Helping Credit Unions Deliver Member Relief and Sustainable Growth

Guest Editorial by Matt Potere, CEO, Happy Money

As economic pressures mount and the cost of essentials like groceries, housing and transportation continues to rise, many households are feeling the strain. In fact, a recent survey commissioned by Happy Money underscores the growing need for financial support. While respondents identified covering daily expenses, building savings and paying down debt as top financial priorities, 21% said they have yet to take any steps to manage their debt in the past six months.

Matt Potere

This gap between financial goals and action presents a defining moment for credit unions: to deliver solutions that reduce debt and stress for members - while strengthening balance sheets and driving sustainable growth.

The Financial and Emotional Strain of Credit Card Debt

Credit card debt is proving to be especially burdensome; US households have amassed more than $1.2 trillion in credit card debt, with average interest rates exceeding 20%. This high-cost, revolving debt disproportionately impacts middle-income Americans who may be relying on credit to cover important living expenses. According to the same Happy Money survey, 42% of respondents reported that they are somewhat or extremely concerned about their monthly credit card payments. For those carrying that concern, the impact goes beyond finances: 42% say it’s affecting their mental health, and 34% report it’s disrupting their sleep.

These insights present both a challenge and a call to action for credit unions. Mission-driven financial institutions are well suited to lead with purpose and support members in reducing debt and financial stress. By offering personalized, transparent banking experiences and tools – complete with actionable guidance and structured credit solutions – credit unions can help members regain control of their financial lives.

In today’s high-rate environment, many consumers are overpaying for credit without realizing better options exist. Trusted institutions can step in with member-focused solutions – rooted in transparency, trust and financial well-being.

The Power of Personal Loans for Member Relief and Sustainable Growth

The need for responsible credit tools has never been more urgent. While many members increasingly look to debt consolidation options in response to these macro conditions, not all solutions are created equal. For example, credit balance transfers may offer low or 0% introductory rates, but they often come with hidden fees and steep interest rate hikes after the promotional period ends.

Personal loans, on the other hand, can offer a more stable, reliable path to meet financial goals. When used wisely, unsecured personal loans convert high-interest, variable-rate credit card balances into fixed-term payments with a clear payoff timeline. With APRs averaging about 7.5% lower than credit card rates, this approach could save U.S. households over $80 billion annually if more widely adopted.

Such a strategy is also a win for credit unions. Not only does offering lower-cost, fixed-rate personal loans help members consolidate debt into manageable, predictable payments that provide real relief, it also helps credit unions diversify their balance sheets and responsibly grow. And by empowering members to reduce debt responsibly, credit unions reinforce their role as long-term financial partners – not just transactional lenders. However, credit unions don’t have to do this alone.

Strategic partnerships can help credit unions bring personal loans to market faster – without the cost or complexity of building from scratch. Collaborating with proven partners enables institutions to launch or scale personal loan offerings with greater speed, efficiency and security. The right partner brings more than a lending platform: they deliver modern underwriting, advanced analytics, strong risk management and a seamless user experience that today’s members expect. Beyond capabilities, a true partner should be mission-aligned and committed to responsible borrowing, as a common ethos can make all the difference for long-term success.  

Why Trust and Transparency Are Non-Negotiable in Lending

In these uncertain economic times, trust and transparency aren't optional – they're essential. Members need to understand exactly what they're signing up for: no hidden fees, no surprise rate jumps and no fine print that could be detrimental to their financial goals. Clear communication and dependable support go a long way in building loyalty and confidence.

Credit unions are uniquely suited to lead in this area. Their cooperative structure and member-first values align naturally with responsible lending. With a measured, data-driven approach to personal lending, organizations can provide the clarity and assurance members need to make meaningful progress toward their goals.

Credit Unions as Members’ Financial First Responders

With their community roots and mission-driven approach, credit unions are ideally positioned to act as financial first responders amid ongoing financial strain. By offering fixed-rate, affordable personal loan options – supported by the right partners and delivered with transparency – credit unions can help individuals regain control of their finances and reduce stress during times of uncertainty.

In doing so, they can not only deliver on their promise to serve but also strengthen their balance sheets, grow responsibly and affirm their role as trusted institutions that stand with their members through every economic cycle.

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Matt Potere is CEO of Happy Money, a leading consumer finance company that empowers people to achieve their goals through responsible lending.