MADISON, Wis. — With the proliferation of alternative financial services outlets such as check cashing stores, Filene Research Institute set out to create a project for credit unions to offer more choices to members and nonmembers, especially from low-income households. The institute has just released its report, REAL Solutions: Solving the Financial Service Needs of America's Working Families, based on its findings from its program REAL Solutions, or "Relevant, Effective, Asset-building and Loyalty-producing" solutions. The study explores why the program was established, who is involved, and what products are being offered by participating credit unions. It also examines data on which types of products REAL Solutions partners believe have the greatest potential and the populations they find most in need of help, according to Lois Kitsch, Filene director of field projects, who authored the report. "By far the most important consideration in undertaking a program to serve the needs of low wealth individuals and families is a desire to do so," Kitsch said. "Our case studies demonstrate that credit unions can live up to their philosophical and cultural principles regardless of the size and scope of their resources."

The report also identifies the business case for serving low-income households and how market leaders in a variety of industries have vaulted to a position of prominence by serving a heretofore-neglected portion of the market. Kitsch said according to a 2001 Fannie Mae Foundation report, alternative financial service businesses reaped $5.5 billion in fees, based on 280 million transactions with gross revenues of more than $168 billion and the industry has continued to grow since. A 2004 report counts 22,000 locations that generate approximately $40 billion in short-term loans annually, she added. The REAL Solutions approach aligns products and services with the basic needs of the low-wealth consumer. By offering products that meet these needs–products such as payday lending, check-cashing services, SAFE Accounts, VITA programs and asset-building products, credit unions can give consumers "much-needed relief." "Service to members is the taproot of the credit union idea," Kitsch said. "Some members have very large dreams, and some have small ones. But whatever their dream, the credit union is there to help its members."

Separately, Filene has also published a report that looks at the home buying habits of Generation Yers. The report, First-Time Home "Yers" by Tammi Feltham, looks into the motivations, experiences and levels of satisfaction of young adults' first home purchases, and finds a variety of opportunities to guide credit unions to serve the next generation of home buyers.