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FirstLight FCU Committed to Helping Service Members Gain Control of Financial Lives
Tuesday, May 27, 2014 8:45 AM

Karl Murphy, president and CEO of FirstLight FCU is not surprised by a National Foundation for Credit Counseling (NFCC) survey that finds 55 percent of military service members are ill-prepared, financially-speaking, for an emergency, and says his credit union is committed helping reverse this trend.

FirstLight FCU was established in 1955 as Frontier FCU to serve members of the military, as well as civilians that worked on Biggs Air Force base. Since then the credit union has changed its name and expanded its field of membership; however, Murphy says FirstLight FCU’s commitment to meeting the financial services needs of service members has not changed.

“Financial worries are a concern for many soldiers; particularly when they are on deployment. As their financial partner, we want to be able to provide them with the tools to take control of their financial lives,” says Murphy.

Among other things, Murphy says the credit union teaches financial education at its branches, as well as in military brigades. They also provide online services such as financial counseling and budgeting, and they’ve developed financial management software that is currently available on Android cell phones, and hopefully in the near future, it will be available on the iphone. This software allows members to set goals and monitor spending. If they are close to overspending, they will get an alert.

One of the credit union’s products that has proven to be of greatest benefit is its pawn shop buster loan. According to the NFCC survey, three out of five service members who have taken a loan in the past 12 months indicated that limited lending options required them to look for alternative, non-traditional lenders to meet their financial needs, such as payday lenders and pawnshops.

“Once you are in the payday lending debt trap, it’s very difficult to get out of,” notes Murphy. “Ideally, we want them to come to us first, but if that doesn’t happen and they end up taking out a payday loan, we want to help them get out of it.”

Murphy strongly believes that it isn’t about how much money you make, but how well you manage what you do earn, and that is why the credit union focuses a great deal on financial education.  To expand its financial education outreach to service members, Murphy says they partner with Army Community Services – an organization on military installations that focuses on supporting soldiers.

Other highlights from the NFCC survey include:

  • Seventy-seven percent of service members have financial worries, and more than half (57 percent) say they are very worried about the potential loss of income and job security resulting from defense cuts and downsizing;
  • Twenty-eight percent are now more worried than they were 12 months ago about how their financial situation will affect their future in the military;
  • Nearly half of service members (49%) have taken out a loan in the past 12 months, which included sources such as a credit card (18 percent), friends and family (13 percent), or cash advance or payday lender (6 percent).
  • Twice as many (28 percent service members vs.14 percent general population) have applied for a new credit card in the last 12 months;
  • Almost six in 10 (58 percent) carry some credit card debt from month to month vs. the general population where only about one in three (34 percent) carry over credit card debt every month;
  • Twice as many have paid less than the minimum required payment in the last 12 months (6 percent vs. 3 percent); and,
  • Service members were more than twice as likely to obtain a cash advance from a credit card in the last 12 months (5 percent vs. 2 percent).