Five of the eight winners of the Center for Financial ServicesInnovation second round of Financial Capability Innovation Fundawards are either offshoots of credit unions, have credit unionspartners or have a history of working with credit unions.

The eight winners will share a total of $2.5 million in grants.The CFSI did not release exactly how much each programreceived.

“The eight organizations funded this year offer freshperspectives on the industry’s efforts to foster positive financialbehavior and provide concrete mechanisms for meeting consumer needsin new ways,” said Jennifer Tescher, CEO of the CFSI. “By fundinginnovative programs like these, we seek to support promisinginterventions designed to transform the underbanked marketplace. Webelieve these programs will empower consumers to take greatercontrol over their financial lives.”

The five winners include the Center for Community Self Help, a community developmentfinancial institution that is associated with a group oforganizations that has grown out of the 39,000-member $580 millionSelfHelp Credit Union, headquartered in Durham, N.C.

The organization will design a suite of small-dollar creditproducts to be launched across the credit union’s Californiabranches, the CFSI announced. These will include a conventional­overdraft line of credit linked to a checking account, anunsecured term loan and an overdraft line of credit with automaticrepayment.

In addition, the CFSI said Self-Help will also use threedistinct underwriting models to test their relativecost-effectiveness for facilitating the lending and repaymentprocess. The conventional overdraft line of credit will featuredefault settings that encourage borrowers to pay down their balanceat an accelerated rate. Borrowers of the other two products will beauto-enrolled in an offset savings account and interest will onlybe charged on the loan’s outstanding principal net of anyaccumulated savings.

“Self-Help is grateful to CFSI for this grant and theopportunities it creates,” wrote David Beck, policy and mediaDirector for Self-Help, in response to the program announcement.“Self-Help intends to use this funding to advance a model fordelivering small dollar credit that is accessible and affordable toconsumers while simultaneously being sustainable and scalable tolenders. At present, the products offered by mainstreaminstitutions generally are not accessible, affordable, or otherwiseattractive enough to serve this market in a responsible andsustainable way.”

The second winner with a history of working with credit unionsis the Doorways to Dream Fund or D2D. D2D was the organization thatdeveloped the idea of offering prizes to encourage savings whichhas been put into good effect in Michigan and other states.

The CSFI said D2D will design and launch SavingsQuest, aplatform that will use a variety of gaming mechanics to increaseconsumer savings. Participating savers will be rewarded fordemonstrating various saving behaviors, such as making regulardeposits through a points-based system offered via an engaging andgame-like interface. D2D and the Take Charge America Institute willtest how the platform’s game mechanics affect cardholder savingsbehavior, providing insight to the underbanked financial servicessector on how best to employ gamification strategies.

The third winner associated with credit unions is the Mission SFCommunity Financial Center, headquartered in San Francisco. MissionSF is an independent nonprofit organization that is partnered withCommunity Trust, another organization also branching off of SelfHelp Credit Union. Mission SF uses Community Trust, a division ofSelf-Help Credit Union. Through this partnership, Mission SF linksits financial education and counseling participants withappropriate financial products and services provided by CommunityTrust.

The Mission SF program that won the grant will research whichfinancial education and incentive approaches working best to helplower income young adults develop better financial management andsavings habits. In the program, 800 lower income youth will bedivided into four groups. Three of three groups will receivesavings accounts and some basic education and incentives to startusing them, but two of the three will also receive differentdegrees of personal attention from peers about the savingsaccounts. The fourth group will function as the control and not getany savings accounts at all.

The goal, according to Margaret Libby, Mission SF executivedirector, is to try to measure how much additional face to faceattention from a trained peer is needed to get more impact from thesavings program.

Libby explained that face to face contact with a trained peer isoptimum in many ways, but it’s also expensive and time consuming todevelop. Finding out how much face to face time is needed will helpMission SF learn how to replicate its savings program across awider geographic area and for more people, she added.

The similarly named Mission Economic Development Agency, thefourth winner, is not an offshoot of a credit union, but haspartnered with the 14,000 member, $104 million Cooperative Center Federal Credit Union, headquartered inBerkley, Calif., to implement its grant-winning idea.

In the program, MEDA and the credit union will allowparticipants at the organizations’ Volunteer Income TaxAssistance site to use some of their tax refund money to anchora secured credit card. Participants in the program will then beoffered guidance and counseling on how to manage their credit useand repay credit card loans on time, according to Jillian Spindle,Director of Development for MEDA. “The goal was to seize theopportunity,” said Spindle, who said that the money which could beused to anchor the credit card could be as little as $200 but whichcould still take a lower income client a great deal of time to saveup outside of tax time.

The fifth winner to be involved with a credit union isNeighborhood Trust Financial Partners, a nonprofit organizationpartnered with the 3,500-member $9 million Neighborhood Trust Federal Credit Union to bring greaterfinancial education and opportunity to the underserved parts ofupper Manhattan and Washington Heights parts of New York City.

NTFP’s award winning program will work with employees of smalland mid-sized firms to help them specify savings targets and thenset aside a portion of each paycheck to flow into accounts set upto reflect those targets. The balance of the paycheck then goes tothe employee. The program additionally provides pay stubs thatreflect the progress made toward the goal with each passingpaycheck, the CSFI said.