The regulatory pendulum is constantly swinging and those who choose to wait for a period of stability before innovating will be waiting far too long. Numerous credit unions have pioneered creative concepts for vulnerable consumers, for example:

Point West CU in Portland, Ore., has issued approximately $20 million to more than 2,000 members through its Non-Citizen Lending Program since its inception in 2002. The portfolio currently stands with a delinquency ratio of 0.71% and a charge-off ratio of (one year) of 0.22%.
The Payday Payoff program was originally established by Kinecta FCU and Nix Neighborhood lending in California in 2014 and as of Feb. 14, 2017 they have provided more than $18.1 million in installment loans to more than 13,700 individuals with a repayment rate of 92%. Average FICO score improvement for recipients is 150 points.
WSECU and QCash in Washington State provided members with more than $28 million in small dollar loans in 2015, saving members an estimated $3.7 million when compared to payday lending options.
Alterna Savings Credit Union of Ontario, Canada has been providing microfinance loans, coupled with business education since 2000, issuing more than 850 loans totaling more than $4.5 million. Through 2012, Alterna reports that borrowers experienced a 75% reduction in the need for government assistance and hired workers in the community to support their businesses (25% hired permanent workers and 75% hired part-time workers).

The bottom line is credit unions that choose to take on the task of being part of the solution for struggling consumers do not need to start from scratch, nor are they going to have to do it alone. Filene Research Institute (through significant support from VISA and the Ford Foundation) has made a firm commitment to making a dent in the economic slide of many consumers through our Financial Empowerment Incubator. In this Incubator we work with more than 35 credit unions across North America to research, test and analyze possible solutions for credit unions to serve financially vulnerable groups, including the ideas noted above.

Instant Insights /

Who Stands to Gain in a Deregulated Credit Union Environment?

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