Uncovering the Hidden Potential of the Underserved Segment

1.

At Guadalupe, it takes only $5 to open, and keep, a savings account. “You get that $5 back if you close your account as long as it’s in good standing,” Adena Whitman explained. “We really want to make checking and savings accounts accessible across the board and everybody has $5.”

2.

“We have no barriers to opening an account,” said Delynn Byars, SVP of Marketing from First South Financial Credit Union. “We don’t use anyone’s banking or credit history against them at account opening. Also, we have a full suite of digital products and services, like eAlerts, mobile banking, online banking, etc. These help members stay on top of their account balances.”

3.

“Checking In” is a 30-45 minute course on financial literacy skills, provided by Farmers Insurance FCU. Once the member completes the program, he/she gets a Visa® debit card, box of checks, overdraft protection, Checking In savings account, online and mobile banking, and electronic bill pay – all free.

4.

“Credit Builder Loans” are ideal for people with no established credit, or looking to rebuild it, according to Craig Boivin, Marketing Manager at UMassFive College FCU. The loan is immediately deposited into a primary or secondary account. Then, the money is frozen for the duration of the loan. Once the loan has been repaid, the hold is removed, and the member earns the loan proceeds just by paying it back.

5.

“We offer the ‘Helping Hand Loan.’ This unsecured product allows members to obtain loans to build or rebuild credit while increasing their creditworthiness and providing additional lending opportunity as the loan pays down,” explained Jamie Denunzio, COO at Riverfront FCU. “Riverfront espouses a philosophy of service to members of modest means,” said CEO Tim McLeod.

6.

The “Borrow and Save” small dollar loan, developed by the Federation and piloted at credit unions like Guadalupe and Peninsula CU, helps those with volatile incomes save. “Members typically borrow anywhere from between $300 – $1,000 with 25 – 50% of the loan balance placed in restricted savings for the term of the loan. When the loan is repaid, borrowers have savings and improved credit,” according to Clarissa Ritter at the Federation.

7.

Alterna Savings Credit Union originated the “Community Microfinance Small Business Lending” program being tested in the Filene Incubator. The program encourages credit unions to offer microfinance loans as low as $1,000, especially to minority small business owners who are disproportionately denied credit.

8.

Filene’s “Payday Payoff Installment Loans” program is “a reactive approach to the issue of payday loans,” according to Adam Lee. Originated by Kinecta Federal Credit Union and Nix Neighborhood Lending, it supports those who have taken out predatory payday loans, consolidating them into a more affordable installment loan while simultaneously building a member’s credit.

9.

Filene and Washington State Employees Credit Union are piloting “QCash” – a payday alternative using a technology platform that provides small dollar loans in a pinch. Additionally, members can get approved for a small dollar loan within 60 seconds. The money is immediately transferred into the member’s account.

10.

Wakota Federal Credit Union’s new “Non-Citizen Lending” program has been exceedingly successful, offering loans to non-citizens by way of an “ITIN” background check.

11.

Data Mined Auto Loans use data mining techniques to identify good candidates for auto loan refinances. Based on underwriting criteria, members can qualify for an auto loan at either traditional or non-prime rates.

12.

“Debt Dragon” is an online platform that helps high school students determine the debt they’ll be facing after graduation by entering information like school tuition, financial aid, and expected job field. So, students can view different combinations to project a loan burden before it becomes an issue.

13.

“Bank on Family” takes the idea of borrowing money from family or friends, and formalizes it. And, since it’s funneled through a mainstream financial institution, it builds the member’s credit, as well. “Debt Dragon” and “Bank on Family” are both in their infancy through Filene. If your credit union is interested in piloting either of these programs, contact marnieg@filene.org

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