Future Is Now For CU Innovations
For a group of more than three dozen credit union executives participating in a groundbreaking study of new and potential products and services for credit unions-the future is now.
The group, dubbed i3 by the Filene Research Institute, the credit union think tank which organized the initiative, has come up with seven innovations it believes can help change the face of the credit union movement by strengthening bonds with existing and fringe members and attracting new ones.
They include: an incentive-laden youth savings account; an open-ended credit agreement comparable to a home equity line of credit; a program using advocates to market credit union services to consumers, much like a pyramid scheme; and an initiative cash gifts for newlyweds; a program educating members on how to use and improve their credit scores; and a property-management/investment initiative.
Copies of the report, called the i3 Group's "Key Findings: 2.0," can be obtained at the Filene Institute's website at filene.org.
The purpose of the i3 project, according to its director Mark Meyer, was to take research and apply it in a practical way. "It's sometimes been difficult to apply the ideas and reports of Filene and put them into practice," said Meyer.
The i3 project, which was partially funded by the corporate network, grew out of earlier Filene initiatives aimed at helping credit unions reach underserved communities, like studies on payday lending and check cashing.
"But we needed a model to do some other things; to reach broader markets," he said.
"People were focused on today; not always focused on how do we build for tomorrow," Meyer explained.
The 39 participants in the i3 group were chosen for a variety of aptitudes and experiences. None of them are CEOs.
"We were looking for people who are closer to the marketplace; the members, but still close to the top of the organization so they have some influence over operations," said Meyer. Each participant signs on for two years. The group meets in person twice a year but more regularly either by teleconference or web chat.
Filene is now accepting applications for the next round of i3.
The innovations the group introduced, several of which are being piloted in credit unions already, include:
* SmartScore: a program to educate members about the credit scoring process, how to improve their scores and gain control over their personal finances and learn ways to better manage their debt;
* Hi 5: a youth savings account that provides incentives for young members to save while helping them learn about the benefits of regular savings through life;
* Lifetime Auto Loan: an open-ended credit agreement, comparable to a home equity line of credit, for multiple loan advances. It is designed for members with changing auto needs and desires through their lives;
* The Flex.One Account: an account which pools all of a member's accounts-savings, loans, mortgages, checking, credit cards-into one account offering convenience and significant savings;
* MoneyWorks: a program designed to use 'advocates' to market credit union services to consumers, providing a low-key delivery channel for services and products, and to serve as a source of income for advocates, a kind of pyramid scheme, like Tupperware or Pampered Chef. The credit union advocates could be employees or contract workers;
* MatriMoney: a program that allows cash gifts to be given in a socially acceptable way for weddings, while building up the newlyweds special savings account. It also targets members at a life stage-marriage-when they are open to evaluating their personal finances.;
* CU1031: The 1031 Exchange is designed to help credit union members relocate properties, diversify investments and take care of retirement or vacation home investments. Credit unions also can position themselves as intermediaries for these important transactions.