How Credit Unions Are Helping

Financial stress is lonely. Research increasingly confirms that when people are struggling financially, they often feel isolated, ashamed, and disconnected. A Harvard study found that Americans earning under $30,000 a year are the loneliest group in the country. Similarly, researchers at Ohio State have shown that financial hardship frequently causes people to withdraw from their support networks, reinforcing a cycle of silence and struggle.

These findings are consistent with the research I explored in my earlier Forbes article, Being Sad Is Expensive: How Your Money-Mindset Matters. In that article, I showed how negative emotions can shrink our sense of possibility and margin, limiting our ability to make sound financial decisions. In the same way, when people feel like they’re the only ones struggling (i.e., lonely), they’re less likely to reach out for help. That isolation compounds the problem, making financial challenges feel even more overwhelming and harder to escape. It becomes a cycle: stress fuels loneliness, and loneliness makes it harder to find support or solutions.

What’s the solution to this problem?

We need spaces where people can come together to talk openly and honestly about money—not just strategy, but emotion. Discussing anxiety, uncertainty, and hope around money creates the foundation to give and receive empathy, which is a powerful driver of financial well-being (as I explored in my Forbes article on empathy and finances). Imagine if institutions created environments that fostered these kinds of conversations. Imagine places where people could truly connect and feel less alone in their financial journeys.

That’s where credit unions can help.

Community-Building Credit Unions

Credit unions began in the mid-19th century as small, community-based cooperatives designed to provide fair financial services to people often excluded from traditional banks—farmers, factory workers, and local tradespeople. Rooted in principles of mutual aid, member ownership, and not-for-profit service, credit unions were built to prioritize people over profit. During the Great Depression, credit unions became a formal part of our financial system, and now serve more than 140 million people in every U.S. community.

This heritage makes them uniquely suited to address financial stress today, offering not just products but personalized support, community trust, and a safe, judgment-free space where individuals can talk openly about money, seek guidance, and build financial confidence.

Credit unions are uniquely positioned to address both financial stress and loneliness because they are deeply embedded in the communities they serve. Their account holders are not just customers; they are also member-owners, which fosters a sense of trust, belonging, and shared purpose.

There are many examples of how credit unions operate differently than traditional commercial banks, and how they tailor to their products to address real community needs:

• Michigan-based Community Financial Credit Union created a loan program for survivors of domestic and sexual violence, developing the program . They did this after listening to survivors and learning of the economic abuse they face to supporting those who wish to leave and have the resources to do so.
• Vantage West Credit Union was founded 70 years ago right on an Air Force base in Arizona and created specifically to protect airmen from predatory lenders who waited just outside the hangar. From the very beginning, it was about safeguarding financial well-being and offering a trusted alternative to exploitation.
• During California’s devastating Los Angeles wildfires this year, SchoolsFirst Federal Credit Union mobilized quickly to support and reach out to more than 20,000 of its members who were in evacuation zones or directly impacted. That support included emergency relief loans, waived fees, deferred payments, and tailored, one-on-one assistance.

In all of these cases, credit unions not only help individuals, families, and communities recover from challenging situationsand rebuild, but they also help alleviate the financial stress that so often exacerbates feelings of loneliness and isolation. By meeting people where they are, with empathy and personalized support, they offer more than financial relief:, they offer belonging, dignity, and a sense that you’re not alone.

Commercial Banks: A Sharp Contrast

By contrast to credit union banks, commercial banks like Wells Fargo and Bank of America have become emblematic of how profit-driven practices can harm individuals and erode community trust.

• Wells Fargo, for instance, made headlines for opening millions of unauthorized accounts without customer consent—a scandal that not only violated consumer trust but also disproportionately affected those with limited financial literacy or access to recourse.
• Bank of America has faced multiple controversies, including a $250 million fine in 2023 for systematically charging illegal fees, withholding reward bonuses, and opening credit card accounts without customer permission. These actions reflect a broader pattern among large banks of prioritizing revenue over ethical responsibility, often at the expense of those least equipped to navigate complex financial systems.

Rather than building community, these practices have deepened financial stress and mistrust, particularly among low-income and underserved populations, highlighting the need for more transparent, mission-driven alternatives like credit unions.

Backbone: A Movement to Rebuild Trust and Connection

Backbone is a growing coalition of credit unions across the country that are reimagining what financial services can be: not just transactional, but highly relational and adaptable to an ever-evolving financial landscape.When credit unions collaborate, as they do through the Backbone coalition, their impact grows even stronger, creating a more connected and supportive network that reaches deeper into the communities that need it most.

Credit unions across the country are committed to offering community-based programs that make community connections, build members’ financial confidence, and bring them together around shared values.

The 52-Week Savings Challenge is one example of a specific Backbone initiative. It starts simply: save $1 the first week, $2 the next, and so on — keep it up for 52 weeks, and you’ll have a $1,378 nest egg. It’s a gateway to confidence, security, resilience, and a new habit for savings. This type of challenge creates community and helps draw people toward belonging and out of their isolated place.

Financial Health Is Emotional Health

Consistent with my earlier Forbes article, The Path To Financial Health Goes Deeper Than Advice, at the heart of credit unions’ mission is a powerful insight: financial well-being is inseparable from emotional and community well-being.

Wealth is more than assets; it’s also the assurance that you’re not alone. There are countless stories of affluent individuals who would trade their financial success for a genuine sense of connection and belonging. Tragically, those struggling paycheck to paycheck often experience a deep sense of isolation that not only mirrors their financial hardship but actually reinforces it.

While credit unions are not a complete solution, they play a critical role in building systems of trust. Systems that support not just financial outcomes, but human ones.

When people feel seen, supported, and part of something larger than themselves, they don’t just survive financially, they begin to move toward lasting financial well-being, together.