Filene Unveils 15 Growth Innovations
MADISON, Wis.-From developing a loan program that lets members fund college needs through gift cards, to a software program that allows the credit union to automatically lower interest rates annually for members who make payments on time, the Filene Research Institute's pipeline has new projects in store.
Filene released "Key Findings: Blueprints for Innovation," a report on the latest findings from its i3 group that highlights 15 "new idea blueprints" designed to fuel credit union growth.
"This is not the time to retrench, this is the time to think out ahead," said Chief Innovation Officer Denise Gabel.
Other ideas to come out of the i3 incubator include a program to help members get all the tax credits they have earned, a way to help people save for emergencies, a plan that helps members who are in debt to pay off that debit in small chunks and a rewards program that targets members of Gen Y.
The latest ideas from the CU executives who make up the i3 Group join a long list of other innovations the organization has developed.
The 15 ideas on this page span a spectrum of offerings and member services. Some are already being piloted in credit unions, others are still in development. Below, Filene’s Chief Innovation Officer, Denise Gable, talks about each of the 15 programs. For more information, www.filene.org.
Savings Exchange: This consumer education program's main focus is helping individuals receive a Tax Savers Credit. Gabel said that low- and middle-income taxpayers are often unaware they may claim a saver's credit (up to $1,000 for individuals and $2,000 for couples) if they contribute to retirement savings. The Savings Exchange, designed to be delivered to employees at work and positioned as a CU employer benefit, has received partial funding from the National Credit Union Foundation.
R-Bond: In early development, R-Bond allows consumers to buy bonds to prepare for retirement. Gabel said the new savings product removes roadblocks to retirement savings for small businesses. Consumers go directly to the Treasury to purchase the bonds, which is the reason the idea is still in "phase one," according to Gabel. "One credit union tested the idea but found the interface with the Treasury to be very cumbersome. We are going back to the Treasury to see if they can streamline the interface."
goalmine: Simplifying how families provide funding support for college students is goalmine's objective. Tested at two credit unions, the program's first phase allowed members to provide funding via gift cards, for purposes of tuition, books, etc. The second phase will look at providing a college loan through a gift card.
2 Grand Plan: This credit union program targets low-income individuals who are not accustomed to saving. The savings vehicle creates a $2,000 emergency fund members can fall back on in times of difficulty.
The Big Payoff Loan: The idea here, Gabel said, is to enable consumers with large amounts of credit card debt to tackle the problem in small steps. Credit union members set aside debt in $500 increments, pay off one $500 portion, and then move on to the next installment until the entire debt is paid off. The loan is being piloted at a credit union in Oregon.
VolunTIER: An Internet site makes it simpler for credit unions to garner support for their community involvement efforts and reward members for their support. In the early concept stage, VolunTIER allows credit unions to list their community involvement efforts via the website, have members sign up, and then log in to claim rewards points for their work.
Be N' Biz: This program compliments CU Launch, and connects Gen Y entrepreneurs with credit unions for business creation. B N' Biz provides small loans, ranging from $500 to $5,000, to young business owners. The program launches this month in Canada.
CU Launch: Helping small businesses get off the ground is what's behind this idea that draws on CU volunteers to build a community of experts. The team delivers a helping hand to fledgling businesses based on the skills sets of the volunteers-for example, providing marketing or writing services. Piloted at a credit union in Winston-Salem, N.C., CU Launch created a website for a startup company.
Co-Opera: This program makes co-op to co-op lending and borrowing more accessible. In the early concept stage, Co-Opera assists student housing cooperatives via a website to connect cooperatives and CUs.
MI CO-OP: Consumers seeking to purchase manufactured homes often face difficulty obtaining financing, Gabel pointed out. "Many credit unions do not offer loans for manufactured homes due to risk." MI CO-OP investigates ways borrowers could pay some type of mortgage insurance, similar to PMI, that would remove the CU's risk barrier. MI CO-OP has been adopted as a as signature program by the Corporation for Enterprise Development in Washington.
60-Day Loan Guarantee: Filene learned there is no market for a loan guarantee. Offered at three CUs, the guarantee allowed members to cancel their car loan if for any reason they were dissatisfied with the loan within the first 60 days. All interest is returned. "The team thought it was a great idea, but had no takers at any of the pilot credit unions," Gabel said. "Members basically said, 'we trust you, so we do not need a guarantee.'"
Lift: A software program that allows the credit union to automatically lower interest rates annually for members who make payments on time, Lift builds member loyalty and rewards good financial habits. The effort targets those with weak credit scores who don't qualify for low rates. Gabel explained that Lift software is written to interface with any core processing system and can be used on all types of loans. In addition to lowering the rate and monthly payment, Lift also makes the proper adjustments to all of the corresponding loan elements, such as the amortization schedule, and ensures the loan remains compliant.
The program has received a $300,000 grant from the Center for Financial Service Innovation in Chicago. CUs are being called on to pilot the effort in April in preparation for a national launch.
The Signal: Between 65% to 75% of Americans will be disabled at some point in their life, yet there is no central repository of information to outline the disability benefits in each state, explained Gabel. The Signal would create a disability benefits information website CUs could sponsor to not only boost their standing within the community but also reach out to a very large segment of the U.S. population. The program is in the early concept stages.
Black Star: A share secured loan fostering a cooperative environment in the food and drink industries, this program allows members of a cooperative to put money into a deposit account and receive a loan that is then invested as capital in the cooperative. The program is being tested with a credit union in Austin, Texas, that is working with a local restaurant run by a cooperative group. Gabel said the loan addresses difficulties cooperatives often face in securing loans.
UMatter: CUs have rewards programs for Boomers and Gen Y, but not many programs for Gen X, Gabel said. UMatter bundles services designed for Gen X, which represents 46-million Americans. The concept is still in the early development stages.