MADISON, Wis. — Fourteen credit unions are testing a new auto-lending product aimed at serving the underserved.
The Non-Prime Auto Loan pilot program is another hatchling from the "product incubator" partnership of the National CU Foundation and the Filene Research Institute. It is one of five products in the incubator that is being funded by the Ford Foundation.
The driving force behind this particular product is the fact that 88% of Americans drive to work, so not being able to finance a car can be a significant problem for the underbanked and unbanked, NCUF and Filene said.
"Credit unions have a long history as being the proving ground for consumer centric, innovative financial products," said Cynthia Campbell, director of innovation labs at Filene, in a statement. [P]artnering with the NCUF to test the viability of Non-Prime Auto Loans with mainstream financial institutions was a natural fit since their experience in working with low-to-moderate income consumers is extensive."
The greater mobility afforded by a dependable vehicle can make a huge impact on a household, added Gigi Hyland, NCUF executive director. "Estimates say that families can increase their income by as much as 25% with access to reliable transportation," she said. "We're excited to work with not only Filene on this project but also such a wide array of credit unions across the country to give affordable, safe and reliable used cars to those that need them most."
The following credit unions are participating in the pilot:
- CALCOE FCU in Yakima, Wash.;
- Cy-Fair FCU in Houston
- Denver Community CU in Denver
- EECU in Fort Worth, Texas;
- Freedom First CU in Roanoke, Va.;
- Laramie Plains Community FCU in Laramie, Wyo.;
- Missoula FCU in Missoula, Mont.;
- SchoolsFirst FCU in Santa Ana, Calif.;
- Seasons CU in Middletown, Conn.;
- Shreveport FCU in Shreveport, La;
- Soo Coop CU in Sault Ste Marie, Mich.;
- Summit CU in Madison, Wis.;
- University CU in Austin, Texas; and
- US FCU in Burnsville, Minn.
