NEW YORK — Fourteen credit unions will participate in a pilot program to test "Borrow & Save," which offers low-and-moderate income U.S. consumers small-dollar loans as an alternative to payday lenders.
Borrow & Save is a product of the National Federation of Community Development Credit Unions. The Filene Research Institute is partnering with the Federation in the pilot program. Filene said Borrow & Save is one of five products in its accessible financial services incubator funded by the Ford Foundation.
Filene and the Federation said Borrow & Save increases consumers' economic security by providing an affordable small dollar loan with payment terms that make sense for the consumer. A built-in savings component also enables consumers to self-fund their emergencies instead of borrowing money.
Credit unions across the country that will test the Borrow & Save product include:
- 1199 SEIU Federal Credit Union, New York
- Carter FCU, Springhill, La.
- Communicating Arts CU, Detroit
- Credit Union 1, Anchorage, Alaska
- Freedom First CU, Roanoke, Va.
- Guadalupe CU, Santa Fe, N.M.
- Hope CU, Jackson, Miss.
- Lake Trust CU, Lansing, Mich.
- North Side Community CU, Chicago
- Peninsula Community FCU, Shelton, Wash.
- Seasons FCU, Middletown, Conn.
- SkyOne FCU, Hawthorne, Calif.
- Southwest 66 CU, Odessa, Texas
- Urban Upbound FCU, Long Island City, N.Y.
"Credit unions have a long history as being the proving ground for consumer-centric, innovative financial products," Cynthia Campbell, director of innovation labs at Filene, said in a release. "Partnering with the Federation to test Borrow & Save's viability with mainstream financial institutions was a natural fit, since their experience in working with low-to-moderate income consumers is extensive."
Federation President and CEO Cathie Mahon said: "The large number of credit unions interested in participating in the Borrow & Save pilot reflects the need among low-income consumers for affordable loans that provide a safe alternative to predatory lenders. Borrow & Save's unique mandatory savings help consumers strengthen their financial condition by building credit and developing a cushion against future emergencies."
The National Federation of Community Development Credit Unions is a certified CDFI Intermediary representing more than 200 community development credit unions (CDCUs).
