Credit Unions and Consumer Education: An Example from Rhode Island

In response to last week’s bog about the gaps in financial education courses for high school students, I received an example of a credit union effort from five decades ago.

In the 1970’s and early 1980’s Rhode Island credit unions were a source of system innovation. The state had a strong dual chartering option.  State credit unions were authorized NOW accounts (negotiable orders of withdrawal) a forerunner of share drafts and checking.

There was a private share insurance option which was initiated because NCUA would not insure the credit union NOW accounts. That insurance option was also provided to Rhode Island’s mutual savings banks. That dual coverage became an Achilles heal during the S&L troubles in the mid- 1980’s.

The state field of membership options included the traditional employer, community, and associational common bonds.  The community charter included  anyone who lived or working in the state.

Rhode Island’s influence extended to the national leadership where Joe Cugini, President of Westerly Community Credit Union, was serving as  Chair of CUNA when Ed Callahan, Bucky and I arrived at NCUA in 1981.

But an even more unusual leadership role was that of the league President, Bob Bianchini.  While League President, he was also elected and served as a state representative in the Rhode Island legislature.

Here is his account of his focus on consumer financial legislation while in the legislature.

“I was elected in 1978, at the same time I was serving as President / CEO of the Rhode Island Credit Union League.  Serving in the legislature was a part time endeavor (legislators were paid $300 dollars a year) so most everyone who served also had other employment or other sources of income.

“Credit union issues were not often paramount during the time I served. When legislative efforts regarding consumer financial services were proposed, credit unions were almost always included in any proposed legislation.

“I avoided sponsoring any legislation that affected financial institutions, but to be completely candid, when such legislation was proposed, my colleagues often would ask me for an explanation and my opinion. I would often do the same when bills were proposed that impacted other industries. I would frequently seek an explanation or points of view of my colleagues who labored in those particular industries, such as education, legal, automotive, medical etc.

“When I proposed the consumer education, the first legislators from whom I sought support were the teachers who served with me in the House.  My explanation of what I hoped would happen would be that kids would receive information about basic consumer education.  For example, how to balance a checkbook, what types of savings and loan products were available to consumers, the importance of balancing income and expenses. I’m sure there were other topics included as well.

“The opposition to my original bill from the Department of Education was based more on a standing concern by the Department.  They opposed any specific topics  inserted in school curriculum through legislative efforts, rather than opposing the idea that kids should be exposed to basic consumer education.

“The compromise we reached was that consumer education would be included as part of all social studies classes. I can’t recall if it was 8th or other grade levels.

“It’s now 43 years later and I don’t know whether that practice still exists. If it does, I would think it might impact the grade level assigned to the state’s commitment to taking financial courses.

“At that time, I informed our league board and legislative committee of my efforts. Although I can’t recall other legislative and regulatory issues that the league was following then, I’m sure it was a full agenda.”

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