June 24, 2025
by Scott Butterfield
Across the country, credit union leaders are asking the same question: Where will our next wave of new members come from? For many, the traditional paths to organic growth have slowed. Indirect auto lending, once a go-to source of new accounts, isn’t delivering the long-term member relationships we need. At the same time, competition is everywhere—from fintechs and megabanks to digital-first retailers offering slick apps and instant approvals.
It’s getting harder—and more expensive—to stand out. Competing on rate alone is a race to the bottom, and it’s a race most smaller credit unions can’t afford to win. The marketplace is crowded, loud, and fast-moving. So, where do we look for members who actually need us, value us, and will stick around?
Enter ALICE.
ALICE stands for Asset Limited, Income Constrained, Employed—a term coined by United Way to describe households that earn above the federal poverty line but still struggle to afford life’s basics. These are our teachers, mechanics, nursing assistants, daycare providers, and grocery clerks. They are working—often more than one job—but they’re one flat tire or medical bill away from financial instability.
In most communities, ALICE households aren’t the exception—they’re the norm. In fact, when you combine ALICE with households living below the poverty line, they represent over 40% of households in many states. Urban, rural, or suburban—ALICE is everywhere. And most of the time, they’re invisible to traditional financial institutions.
This is our opportunity.
Credit unions were built to serve the underserved—and ALICE households are the very people our movement was made for. They aren’t just underbanked. Many are disrespected, dismissed, or actively excluded by mainstream financial providers. These individuals are tired of being charged fees for being broke. They’re tired of being treated like a credit score instead of a human being.
And here’s the good news: they’re looking for an alternative. They just don’t always know we exist—or that we’re different.
Meeting ALICE where they are
If you’re a credit union leader looking for a path to sustainable, mission-aligned growth, ALICE should be on your radar. Credit unions that have leaned into this work—that have made ALICE a strategic focus—are seeing the returns: stronger organic growth, deeper member loyalty, better margins, and meaningful community impact.
Here’s what it takes:
- Affordable, accessible credit
- Think used auto loans, small-dollar loans, credit builder programs, and underwriting that accounts for life’s complexities.
- Use alternative data or manual review to give people a shot they won’t get elsewhere—look deeper.
- Respect over judgment
- No surprise fees. No punitive policies.
- Offer second-chance products and real conversations about financial wellness.
- Education that’s practical and personal
- Budgeting for rent, buying a car, handling income gaps, building emergency savings—real topics for real life.
- Delivered through trusted community channels, not generic webinars.
- Tech that works without friction
- Easy mobile access, simple interfaces, and features that match daily needs.
- Support in multiple languages and formats when possible.
- Authentic community engagement
- Show up where ALICE lives and works. Build employer partnerships. Sponsor local events. Be visible.
- Hire ALICE staff that understand and represent the community and the unique challenges they face. Address any hiring practices that overlook these potential hires.
Why it works
ALICE members are loyal. They use multiple products. They refer friends and family. And because they’ve been overlooked by so many others, they’re more likely to see your credit union as a partner—not just a provider.
There’s also a financial upside. Serving ALICE well can improve long-term performance and open doors to government and public/private partnerships and funding. Credit unions that reach underserved markets can qualify for CDFI certification, NCUA grants, and partnerships that bring both capital and credibility. It’s a mission-driven strategy that makes business sense.
The bottom line
If your credit union is struggling to grow, or if you’re tired of playing the rate-and-reward game with big-bank competitors, go ask ALICE. Review United Way’s ALICE data for your state. Understand who she is in your community. Then build a strategy that reflects her needs, her strengths, and her potential.
This work isn’t always easy. It takes commitment, compassion, and sometimes a shift in how we think about risk and reward. But ALICE households are not a charity case. They’re a market—and a meaningful one. One that can drive sustainable growth, deepen community impact, and bring your mission back to the center of everything you do.
So if you’re in search of new members, go ask ALICE. Chances are, she’s already looking for you.
