In just ten weeks, the Filene Research Institute and the Crash Network have developed an innovative program designed to help credit unions increase the availability of affordable home ownership.
A competition, The Collider, kicked off in mid-April challenged the group of young credit union executives to come up with new approaches for affordable home ownership. In less than two weeks, 19 elevator pitches rolled in from the group. Round 2 demanded concept documents from 10 teams, which a panel of judges then drilled down to the final four ideas.
“This was an experiment for us,” said Mark Meyer, CEO of the Filene Research Institute. “But we were blown away by the level of creativity and quality of ideas coming out of the Crasher group.”
Selecting the final winner wasn’t an easy task as Crashers Bill Clancy of Lake Michigan CU, Amanda Thomas of Members First CU, Matt Vance of Industrial CU, Lisa Brown of Tallahassee-Leon FCU and Sean Capaloff-Jones of UMassFive College FCU offered healthy competition with their concepts in income-based mortgage payments (CCPE Loan Program), lease-to-own options on foreclosed homes (Smart Move Mortgage), and separating the value between land and properties (Land Trusts).
In the end, the Credit Union Home Buyer's Plan by Robert Christiansen of Servus Credit Union based in Edmonton, Alberta, took home the gold.
The Credit Union Home Buyer's Plan offers matching incentives on member-contributed savings in order to help members in saving for a down payment for the purchase of a home. The credit union makes an annual matching contribution on member-contributed savings every year over the life of the plan.
“In an industry where nearly no financial institutions offer meaningful incentives for saving, this product could serve to drastically differentiate the host credit union from its competitors at essentially the same cost a credit union would spend on a marketing campaign,” said Christiansen.
He added that it’s also a tool that will help grow a credit union’s deposit portfolio and/or noninterest revenue portfolio, depending if the underlying assets are guaranteed, like a guaranteed investment certificate or savings account, or nonguaranteed, like a mutual fund, which would generate fee or trailer-based income.
Christiansen’s idea will get a boost into the marketplace with an assist from a Filene Research Institute implementation team. In addition, Christiansen will present The Credit Union Home Buyer’s Plan at Filene’s annual big.bright.minds meeting in October. big.bright.minds is a gathering of Filene’s research council CEOs, i3 innovators and academic research fellows. The Crash Network is a grassroots organization of more than 160 young credit union professionals.
