MADISON, Wis. — Low- and moderate-income members may benefit down the road from four products the Filene Research Institute is testing in its new accessible financial services incubator.
The products, chosen from among 20 submissions in a nationwide search, provide innovative ways to benefit the unbanked and underbanked.
Products ready for testing in selected credit unions are:
Borrow and Save, from the National Federation of Community Development Credit Unions. This product increases consumers' economic security by providing an affordable small-dollar loan with a payment term that makes sense for them. A built-in savings component also enables consumers to self-fund their emergencies instead of borrowing money to handle them.
Pay Yourself Back, from Innovations in Poverty Action. As an add-on to any loan type, this product 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.
Non-prime Auto Lending, from the National Credit Union Foundation. This program helps lenders fairly price and manage non-prime auto loans, incorporating the LIFT idea introduced by Filene i3.
Employer Sponsored Income, Advance Loan, from North Country FCU, Chittenden, Vt. This small-dollar loan program is offered to employees of select employer groups 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.
The test period runs 18 months starting in January and will include one additional product. The incubator is funded by a grant from the Ford Foundation.
