Credit unions across the United States are joining initiatives and adopting new strategies to help un- and underbanked consumers break out of the alternative market and into mainstream financial services. Just this week, CUNA has reported on the Bank On efforts in Alabama as well as low income lending in Cleveland.These efforts are important steps in reaching the nearly 30% of U.S. households that don’t have access to basic, safe, affordable services.
This week, CreditUnions.com is shining the light on credit unions that are bringing un- and underbanked consumers into the credit union fold. Kinecta Federal Credit Union is piloting a new take on a debt consolidation loan through its wholly owned CUSO Nix Neighborhood Lending. Its Payday Payoff and Payday Payoff Plus loans consolidate a borrower’s payday loans into one loan with better fees and a lower interest rate. But these loans aren’t just about offering a better product, they’re about helping borrowers change their behavior so they can adopt a better financial lifestyle. Read more today.
Veridian Credit Union’s payday loan alternative gives members access to money while helping them build savings. Instead of steep fees and ballooning interest rates, the credit union charges a one-time origination fee and rates ranging from 19% to 21%. We don’t want to be another payday lender, says Kara Van Wert, manager of consumer and indirect lending at Veridian. Our loan is geared toward helping members through their situations and helping them learn how to save. Click here to learn more.
Credit unions such as Manatee Community Credit Union and Self-Help Federal Credit Union are partnering with employers to break the predatory payday-lending mold. Manatee offers employees of select community institutions customized financial wellness plans that include financial coaching and consumer credit counseling as well as access to an employer-sponsored payday equivalent loan of up to $1,500. Self-Help is carving out a niche in citizenship loans with an employer partnership that provides loans for employees that want to become an American citizen but struggle to cover the cost. Read 3 Approaches To Employer Lending for more information.
For underserved small business owners, Vystar Credit Union offers a microbusiness starter credit card with limits as low as a $500. And Consumers Credit Union allows business owners to complete an express application if they’re looking for a loan of $50,000 or less. Discover more ways to connect with underserved business borrowers in The Mega Opportunity In Microbusiness.
Finally, the need for services that help consumers adopt mainstream financial products isn’t limited to the main land. In Honolulu County, HawaiiUSA Federal Credit Union’s Life Events Assistance Program (LEAP) provides employees, members, and the community the resources to achieve financial stability and reach financial goals. In this week’s Q&A with Scott Kaulukukui, senior vice president of marketing and community outreach, he talks about LEAP and HawaiiUSA’s status as a Native CDFI.