The Bottom Line
Small business is important to Central Oregon, and to Mid Oregon. Find tips and resources for business, and information about Mid Oregon’s commercial services and business members.
Americans Unable to Cope in an Emergency?
From the National Endowment for Financial Education® (NEFE®), April16, 2018
1 in 3 Americans are Financially Fragile
Research funded by the National Endowment for Financial Education® (NEFE®), and conducted by the Global Financial Literacy Excellence Center at the George Washington University, identifies a widespread problem affecting millions of Americans. The recent study finds one in three Americans are financially fragile, meaning they are unable to cope with emergency expenses in a short time frame.
Using survey data and focus group discussion findings, researchers assessed responses focused on financial preparedness—specifically respondents’ confidence that they could come up with $2,000 within a month’s time if needed for an emergency. Individuals answering that they certainly could not or probably not come up with that amount of money in that timeframe are considered financially fragile. The analysis found that one in three (36 percent) respondents in the 2015 National Financial Capability Study (NFCS) fall within this vulnerable group.
“It’s inevitable that a person will experience a financial setback or an income disruption during their lifetime,” says Billy Hensley, Ph.D., senior director of education at NEFE. “If you’re getting money back from Uncle Sam this tax season, consider investing this windfall toward starting or growing an emergency savings fund.”
Financially fragile Americans could not cover the cost of a midsize shock, such as a medical bill, car or house repair within a reasonable amount of time, in the case of this study one month. This number has dropped since 2009 during the Great Recession, when nearly 50 percent of working-age adults were considered financially fragile. Still, the prevalence of unsteady personal finances is concerning.
What causes financial fragility?
Researchers investigated the causes of financial fragility and found three main factors: high debt, lack of assets, and low financial literacy.
“Financial fragility does not mean simply lack of precautionary savings,” says Annamaria Lusardi, Ph.D., academic director of GFLEC. “Both sides of households’ balance sheet matter; heavy indebtedness can also make individuals financially fragile.”
Higher income does not always protect against financial fragility.
Not surprisingly, the majority of financially fragile people are in the low-income bracket. Yet almost 30 percent of middle-income households (annual income in the $50–75k range) and 20 percent of high-income households (annual income $75–100k) also are considered financially fragile.
“The contrast of a $2,000 emergency expense in comparison to higher-income levels is striking,” says Hensley. “Among lower-income individuals and families, most rely, due to the limits of financial liquidity, on borrowing from their network of friends and family or working multiple jobs. Unfortunately, financially fragile households are less likely to have a precautionary safety net.”
Financial fragility and retirement.
Financial fragility is shown to make people vulnerable not only in the short term, but also in the long term, as financially fragile individuals are less likely to plan for their retirement.
Fragility impacts all age groups. Financial fragility does not seem to decrease with age. People of all age groups are financially fragile at comparable levels, despite the expectation that people earn more money as they get older.
Education and gender decrease fragility risk. The higher the education level, the lower the probability of being financially fragile. Also at risk are women, a substantially higher proportion of working-age women are financially fragile relative to men.
“Financial fragility is a multifaceted problem facing a wide representation of the American population,” says Hensley. “We urge everyone to consider the unique factors in their life and prioritize their finances accordingly to work toward long-term financial goals.”
“Initiatives such as incentivizing short-term savings and requiring financial education in school and the workplace can be important steps toward increasing financial resilience,” Lusardi adds.
For more on the financial fragility research, click here.
Study Details
This research analyzed data from two national surveys—the 2015 National Financial Capability Study (NFCS) conducted by the FINRA Investor Education Foundation, and the 2015 Survey of Household Economics and Decisionmaking (SHED) conducted by the U.S. Federal Reserve Board, as well as data collected from focus groups. The study was led by Annamaria Lusardi, Ph.D., academic director of the Global Financial Literacy Excellence Center (GFLEC); Andrea Hasler, Ph.D., assistant research professor in financial literacy at GFLEC; and Raveesha Gupta and Noemi Oggero, research associates at GFLEC.
About the Global Financial Literacy Excellence Center (GFLEC)
Founded in 2011 at the George Washington University School of Business, the Global Financial Literacy Excellence Center (GFLEC) has positioned itself to be the world’s leading center for financial literacy research and policy. Through rigorous scholarship and research, wide-reaching education, and global policy services, the Center works with partners in Washington, D.C., throughout the United States, and across the globe to raise the level of financial knowledge. For more information, visit www.gflec.org.
About the National Endowment for Financial Education (NEFE)
NEFE is a nonprofit foundation that inspires empowered financial decision making for individuals and families through every stage of life. For more information, visit www.nefe.org.
President’s Message: Growth and Milestones
Although we’re not even midway through 2018, the Mid Oregon team is pausing to reflect on some significant growth milestones we’ve achieved together.
30,000 Members, One Billion Dollars Loaned
We’re happy to report that our total membership has passed the 30,000 mark. In addition, we crossed another threshold recently—granting a total of $1 billion in loans since our institution was founded. We know these milestones are a reflection of our community’s growth and our members’ preference for a local place to do their financial business.
We also know it has a lot to do with members like you, who recommend Mid Oregon to your friends, neighbors, and colleagues. We take the trust you place in us very seriously, and we work hard to continue to earn it. This growth strengthens our cooperative and allows us to extend new and better services to every member.
One example of this is rolling out right now. You’ve been asking for a full-featured Mobile Banking App, and we’re pleased to announce that it’s ready! In addition to mobile deposit, our new mobile app allows you to manage your accounts on the go by viewing balances, making transfers, and even paying bills.
Celebrating Special Anniversaries
We also have a lot of special anniversaries to celebrate—the second year since our La Pine branch opened, the one-year anniversary of the opening of our Sisters branch, and one of my favorites—the 20th anniversary of our Redmond branch. It’s hard to believe that only 20 years ago, we were stretching our capacity to operate two branch locations, and now we’re managing seven locations with more than 100 employees!
We couldn’t do it without a great team. By promoting from within and hiring new teammates who show up ready to foster our culture of excellent member service, community responsibility and continuous learning, we’re poised to embrace whatever our members need in the future.
We’re grateful for the opportunity to help you and your family achieve your financial dreams. Thank you for your membership!
Bill Anderson, CEO
Mid Oregon Credit Union
The Importance of Small Businesses
For years, Central Oregon has been known as the land of small business. In fact in 2016, Bend ranked #1 in Forbes’ annual look at the Best Small Places for Business and Careers.
In Oregon, small businesses account for 98% of all firms, employ over half the state’s workforce and play a vital role in our economy. That’s especially true for rural Oregon, which depends on small business for economic growth.
As this week is National Small Business Week, we thought we would recognize the importance of small businesses here in Central Oregon.
About National Small Business Week
From April 29th through May 5th, the Small Business Administration (SBA) recognizes outstanding entrepreneurs and small business owners from across the U.S. Here’s what their website has to say about National Small Business Week:
“Every year since 1963, the President of the United States has issued a proclamation announcing National Small Business Week, which recognizes the critical contributions of America’s entrepreneurs and small business owners.
“More than half of Americans either own or work for a small business, and they create about two out of every three new jobs in the U.S. each year.
“As part of National Small Business Week, the U.S. Small Business Administration takes the opportunity to highlight the impact of outstanding entrepreneurs, small business owners, and others from all 50 states and U.S. territories. Every day, they’re working to grow small businesses, create 21st century jobs, drive innovation, and increase America’s global competitiveness.”
Why Small Business is Important to Mid Oregon
Mid Oregon Credit Union’s membership is very reflective of the composition of Central Oregon residents. While our foundation is still with educators- being chartered by 8 Crook County School District Employees in 1957- our current account makeup has a large concentration of self-employed people. Our commercial services and business members are also growing at a fast pace. Today, the numbers are significant:
- 1,415 of our 30,000+ accounts are business accounts
- Of those, 582 are sole proprietors & 740 are partnerships, limited liability companies or corporations
- Over 1,350 of those businesses use us for checking account services
- Over 2,400 accounts are for self-employed people, which has increased over 25% in the last 2 years
- Those self-employed members rely on us to enhance their financial well-being, with over $51 million in loans and deposits
- Mid Oregon member businesses have over $37 million in commercial loans, financing a variety of Central Oregon business needs
Mike Testerman, Mid Oregon’s Commercial Services Director, noted one of our best kept secrets about our business services:
“People are quite surprised when they learn Mid Oregon Credit Union can provide a range of financing for small businesses that can include multi-million dollar projects.”
Our business accounts are representative of our Central Oregon focus, and the diversity of our communities. Bend-based businesses make up 44% of our accounts, followed by Redmond at 16%, Prineville (10%), La Pine (10%), Madras (9%), Terrebonne/Crooked River Ranch (4%), Sisters (3%), Sunriver and Culver (each 2%). We also have business members in Powell Butte, Mitchell, Crescent, Silver Lake, and other smaller towns.
Small Business Resources in Central Oregon
There are great resources for businesses in Central Oregon, which are necessary to their success. Beyond the Small Business Administration, local business people can turn to these great community partners: