Borrow & Save to be tested in Filene Research Institute’s accessible financial services incubator
Ford Foundation grant enables the scaling of Borrow & Save to benefit low- and moderate-income consumers
FOR IMMEDIATE RELEASE
New York, NY – (November 21, 2013) The National Federation of Community Development Credit Unions announced today that Filene Research Institute will test its Borrow & Save program in Filene’s new accessible financial services incubator. Funded by a grant from the Ford Foundation, the incubator will test, package and scale innovative, viable financial products that benefit low- and moderate-income US consumers.
“We searched nationwide to find financial products that are innovative in ways that benefit low- and moderate-income consumers,” said Cynthia Campbell, director of innovation labs at Filene. “Chosen from more than 20 submissions, Borrow & Save shows promise of doing just that.”
Borrow and Save was developed to increase the economic security of low- and moderate-income credit union members by providing a small dollar loan product with a built-in savings component that can help break the cycle of high-cost, repeat borrowing. The savings help consumers increase their credit score and enables them to weather a shortfall or emergency. Cathie Mahon, Federation President and CEO, says “The Federation is pleased to be working with Filene on the Borrow & Save program. Borrow & Save works on many levels to strengthen a consumer’s financial position, plus it’s easy for credit unions to implement.”
Using credit unions as the proving ground, Filene will test the product’s viability with mainstream financial institutions during an 18-month product incubation beginning in January 2014. Filene is still looking for forward-thinking credit unions to test potential products. Contact Cynthia at firstname.lastname@example.org or 608.886.0087 for more information.
The other products to be tested include:
- Non-Prime Auto Lending by the National Credit Union Foundation. Access to reliable transportation allows for increased access to jobs, housing, schools and activities. But many credit-challenged consumers lack reliable transportation. This program helps lenders fairly price and manage non-prime auto loans, incorporating the LIFT idea introduced by Filene i3.
- Pay Yourself Back by Innovations in Poverty Action. As an add-on to any loan type, this product seamlessly converts borrowers into savers. Leveraging the habits formed by regularly making loan payments, it encourages consumers to keep making regular payments (or a portion of it) to themselves after the loan is paid off.
- Employer Sponsored Income Advance Loan by NorthCountry Federal Credit Union.This small dollar loan program is offered to employees of the Select Employer Groups (SEGs) partnered with credit unions. Loan payments are auto-deducted from direct deposited paychecks. Once the loan is paid, employees may continue making payments into savings accounts.
About the Federation: The National Federation of Community Development Credit Unions is a certified CDFI Intermediary representing more than 250 community development credit unions (CDCUs). The Federation’s member CDCUs provide credit, savings, transaction services and financial education to more than 2.5 million residents of low-income urban, rural and reservation-based communities across the United States, and hold over $19 billion in community-controlled assets. Founded in 1974, the Federation is headquartered in Lower Manhattan with offices in Colorado Springs, CO and Madison, WI. The Federation offers a wide range of advocacy, educational, training, investment, marketing, and outreach programs to support and assist CDCUs. For more information about the Federation and its programs, please visit: www.cdcu.coop.
About Filene: Filene Research Institute is an independent, consumer finance think and do tankdedicated to scientific and thoughtful analysis about issues affecting the future of credit unions, retail banking and cooperative finance. Filene is a 501(c)(3) nonprofit organization. Nearly 1,000 members make the Institute’s research, innovation and impact programs possible.
Media Contacts: Clarissa Ritter, 212-809-1850, ext. 210 or email@example.com
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