MSUFCU Joins Filene Pilot Programs Aimed at the Underbanked
Michigan State University Federal Credit Union (MSUFCU) joined a group of 28 U.S. and Canadian credit unions to test five pilot programs aimed at meeting the needs of the underbanked.
This initiative, Reaching Minority Households, was created by the Filene Research Institute, in collaboration with Visa and the Ford Foundation, with the specific intention of improving the financial lives of minority families.
Credit unions have a long history of commitment to the underserved and minority households are a logical target for their efforts. While minorities comprise 30 percent of all U.S. households, they hold only 13.4 percent of deposits, 7.5 percent of retirement investments and 10% of total wealth in the country.
“Our research has shown that efforts to serve minorities aren’t simply altruistic—they benefit both members and the credit union overall,” said Andrew Downin, managing director, innovation for Filene. “Consumers now have access to affordable financial services and can take critical steps to create a more stable financial future for themselves and their families, and the credit union taps into a new population with an increasing ability to access financial services.”
“At Michigan State University Federal Credit Union, our mission is to help make our members’ dreams come true”, said Jeff Jackson, chief lending officer for MSUFCU. “We decided to join the Reaching Minority Households Incubator and test the Community Microfinance Small Business Lending Program because we want to make sure that any segment of our membership, including those with lower means, can realize their dream of owning or starting a business.”
The credit unions participating will test at least one financial product chosen based on potential scalability and impact, among other factors. The products include:
Community Microfinance Small Business Lending. Developed by Alterna Savings Credit Union, this initiative helps entrepreneurs from primarily underserved and underrepresented groups start or expand their own businesses.
Data Mined Auto Loans. Established by the National Credit Union Foundation, this program employs sophisticated data mining techniques to identify households that may benefit from an affordable auto loan.
Non-Citizen Lending Program. Developed by Point West Credit Union, this program offers credit cards, personal loans, and vehicle loans to non-citizens at the same rates as traditional consumer lending products.
Payday Payoff Installment Loans. Using a risk model from LexisNexis® Risk Solutions, Kinecta Federal Credit Union’s program uses alternative data that allows borrowers to consolidate up to $2,500 of high-cost payday loan debt into an affordable installment loan.
QCash. Built by Washington State Employees Credit Union and offered by QCash Financial, this omni-channel lending solution offers relationship based underwriting without a credit check to members in search of small, short-term unsecured loans with funding in less than 60 seconds.
Filene will work closely with each credit union to provide implementation expertise and resources throughout the pilot. Spots are still available with a sign-up deadline of Sept. 15.