A Crazy Idea (#1) for Credit Unions

This episode proposes an innovative approach for credit unions to manage loan risk and support members, moving beyond traditional underwriting methods. It highlights that common causes of bankruptcy like job loss, medical expenses, and divorce are poorly predicted by current loan criteria. Instead of solely relying on repossession, the author suggests credit unions could proactively assist membersby helping them find new employment or offering financial counseling during significant life events.
While acknowledging the uncertain financial return, there is a huge potential for a dramatic increase in community reputation if such support were implemented. This reflects a shift towards a more holistic and empathetic relationship between financial institutions and their clientele.