NEW YORK — Community development credit unions have a strong foundation for helping families build assets, but far fewer offer services to protect those gains and pass them to the next generation, according to a new Inclusiv report that identifies limited organizational capacity as the primary obstacle.
Inclusiv released “Protecting What Matters” on Oct. 1, announcing its launch during the organization’s regional convening in Madison, Wis. The organization described the report as a first-of-its-kind landscape analysis examining how community development credit unions help low- and moderate-income families protect and preserve their financial progress.
An examination of 100 Inclusiv member credit union websites found that 80% offered common asset-building products and services, such as individual retirement accounts. Only 18% offered asset protection products, including life, disability or long-term care insurance, according to the report’s executive summary.
Fewer than half of the institutions offering those protection products also provided legacy and asset transfer services. Where those services existed, support generally came through outside referrals rather than in-house offerings, the summary said.
The report is the first phase of Inclusiv’s broader Asset Protection and Legacy Planning initiative, supported by a $1.5 million grant from JPMorganChase, according to the organization. The initiative aims to equip community development credit unions with resources to help families preserve wealth across generations.
Building Assets Is Only Part Of Financial Security
Community development credit unions have spent decades expanding access to affordable financial services and helping households build assets through homeownership, entrepreneurship and savings, Inclusiv said.
But those gains can remain vulnerable to illness, disability, fraud, scams, natural disasters and a lack of planning for transferring assets, according to the executive summary.
For families with low or moderate incomes, wealth may consist of a paid-off home, a modest retirement account, a family business or life insurance. Losing those assets can leave the next generation having to start over, the report said.
Value of Truste Relationships
Inclusiv argued that credit unions’ trusted relationships, financial education and coaching, affordable products and community partnerships position them to help members address those risks throughout their financial lives.
“We are excited to advance Inclusiv’s work in this critical area and committed to providing our member CDCUs with the tools and resources they need to launch or strengthen their asset protection programs,” said Cathie Mahon, Inclusiv’s president and CEO.
“This is a natural continuation of our work to advance financial inclusion and economic opportunity,” Mahon said. “Helping families build assets has long been central to that work; helping them protect, preserve, and ultimately pass down those assets is the logical next step. Asset protection should be a key part of every family’s financial journey, regardless of income or wealth.”
Gaps In Planning And Protection
The executive summary pointed to broader financial health and estate-planning gaps as evidence of the need for expanded services.
Among the national figures cited in the summary:
- 51% of adults age 50 and older have a will, although 93% consider having one important.
- 24% of Americans have personally experienced a scam as an adult.
- 31% of U.S. households are considered financially healthy.
- 33% of households earning less than $25,000 annually report having a will, compared with 66% of households earning more than $1 million.
Lower-income respondents also were more likely to postpone estate planning until later in life, according to the summary.
The report cited an estimated $124 trillion expected to move between generations over the next two decades as part of what is commonly called the Great Wealth Transfer.
Drawing on the Financial Health Network’s definition of financial health, the summary said financial inclusion must address households’ ability to make ends meet and withstand setbacks across spending, saving, borrowing, planning and protecting.
For community development credit unions, that means extending existing work in savings, credit building, homeownership, entrepreneurship, retirement savings and financial coaching into a more complete approach to long-term financial security, Inclusiv said.
Capacity Is The Main Barrier
The analysis combined a review of national conditions, an examination of 100 member credit union websites, a needs assessment survey, focus groups and interviews with credit union leaders and practitioners.
Its purpose was to identify patterns across the field, capacity needs and opportunities for developing resources, rather than evaluate individual institutions, according to the executive summary.
The research found that community development credit unions overwhelmingly viewed asset protection and legacy planning as consistent with their missions. However, existing efforts often were informal, fragmented and disconnected from the broader member experience.
Obstacles Identified
The summary identified several obstacles:
- All survey respondents cited staffing constraints, limited staff product knowledge and a lack of trusted referral partners as primary barriers.
- All survey respondents called for staff training, member-facing tools and technology support.
- 66% cited limited technical expertise and uncertainty about where to begin.
- Few institutions integrated beneficiary assistance, fraud and scam prevention education, insurance and referrals into a coordinated approach throughout a member’s financial life.
Without additional capacity, asset protection tends to be treated as a community service rather than a core part of the member experience, the report said.
‘Opportunity to Connect’
Inclusiv said the findings present an opportunity to connect established asset-building resources with protection and legacy-planning education, trusted guidance and partnerships.
“Building financial security is about more than accumulating assets. Families also need the knowledge, tools and trusted support to protect what they have worked hard to build and preserve it for the next generation,” said Mercedeh Mortazavi, head of financial health, global philanthropy, at JPMorganChase.
“This work provides an important foundation for strengthening the resources and partnerships that can help CDCU’s support families at every stage of their financial journey,” Mortazavi said.
Four Areas For Action
The executive summary recommended strengthening institutional capacity and integrating asset protection into existing services, rather than simply adding products.
Its recommendations draw on guidance from the Consumer Financial Protection Bureau, NeighborWorks America, FDIC Money Smart, Prosperity Now, the Center for NYC Neighborhoods and Inclusiv member credit unions.
The report identified four priorities:
- Build staff capability. Incorporate asset protection into existing employee education through training tailored to staff roles, conversation guides, referral procedures and real-world scenarios. Inclusiv’s Learning Center could expand its curriculum to cover asset protection and legacy planning.
- Integrate protection into member education. Address emergency savings, insurance, fraud and scam prevention, beneficiary designations and estate planning throughout the member relationship. The report said these services should extend beyond older or higher-income members. Inclusiv’s Learning Center plans to develop member materials, coaching guides and digital modules.
- Expand trusted partnerships. Connect credit unions with vetted industry experts, strengthen referral standards and develop partnerships that give members access to expertise beyond an individual institution’s capabilities.
- Create shared resources. Develop adaptable training, toolkits, referral resources and examples of effective practices to reduce the burden on individual credit unions. Inclusiv’s cross-sector Advisory Group and Emerging Practice Peer Support Group can help guide development, pilot testing, peer learning and updates.
From Access To Legacy
The summary outlined an expanded financial inclusion journey that connects credit unions’ existing work with asset protection and transfer planning:
- Access: Safe and affordable accounts, credit building and management, and financial education.
- Growth: Savings, homeownership and small-business ownership.
- Resilience: Retirement preparedness, insurance, disaster preparedness, consumer protection and fraud prevention.
- Legacy: Beneficiary designations, wills, trusts and estate planning.
Credit unions do not need to become legal, insurance or estate-planning providers to support that progression, the report said. Their role is to help members understand why protection matters, recognize when guidance is needed and connect them with trusted resources.
Training And Resource Hub Planned
Building on the findings, Inclusiv said it will develop customized training, practical tools and a resource hub to help community development credit unions strengthen or expand asset protection programs within their member services.
The organization also plans to work with credit unions and partners to identify effective approaches, resources and partnerships that can be adapted to institutions with different capacities and communities with different needs.
The goal is to translate the research into resources credit unions can put into practice, helping more families protect, preserve and pass along the financial progress they have achieved, Inclusiv said.
The full report and executive summary are available from Inclusiv.
