WASHINGTON (2/26/13)--Award-winning journalist and best-selling author Jean Chatzky said there is a pressing need for financial literacy among consumers, and that credit unions are in a position to do something about it.
Chatzky, who is the Personal Financial Editor on the NBC's TODAY Show, said studies suggest about half of all Americans are "financially fragile." She said the test is that a sudden $2,000 debt for consumers would most likely result in a financial crises for nearly half of those involved.
She made the observation during a speech before the Credit Union National Association's Governmental Affairs Conference, which runs through Thursday.
"Financial literacy is the big problem," Chatzky added.
She said financial education programs help raise the awareness of basic financial services and helps both the institutions and consumers. "There is a need to give people a better knowledge of basic financial services," she told the meeting. She said credit unions do a great service when they help.
Chatzky said lenders must be aware that there are deep-seated emotional and psychological factors involved when consumers approach them for a loan.
She said that lenders who become sensitive to this can do a better job for the consumer when a person walks into the office and begins discussing a loan. She suggested that each potential borrower reacts differently--some even illogically--and lenders should be aware of this so they can best serve the consumer.
"You don't want to treat everybody like your grandmother," she told the audience. Chatzky said that both financial advisors, like herself, and credit unions are "in the business of granting requests without being intimidating.
"All of you are in a tremendous position to help," Chatzky said, adding there is no doubt that credit union have a reputation for helping the consumer. "But much more needs to be done," she concluded.