On February 24, 2020, Filene launched our Center of Excellence for Consumer Financial Lives in Transition to be led by Dr. Lisa Servon of the University of Pennsylvania.
We had a chance to speak with Dr. Servon on Episode 68 of the Filene Fill-In in July to talk about the work she’s embarking on with us over the next four years and the new forms of economic struggle and financial fragility in light of COVID-19. Here are some brief highlights from that conversation.
What does being the Filene’s Fellow of Center on Consumer Financial Lives in Transition within the credit union space mean to you?
This idea of consumer financial lives in transition, it really breaks down into two components. One is that there are a lot of trends happening in the economy right now that are affecting Americans' financial stability and in fact making them less stable, more unstable. And the second is that there are particular kind of areas of life. We will be looking specifically at health, physical health. We'll be looking at incarceration and re-entry and we'll be looking at the changing nature of work. So, you know, it's kind of looking at these larger trends and larger issues and how they're impacting certain groups of people.
What do you foresee evolving in the future as new forms of financial fragility that we not be facing today?
One thing we're seeing is that families are derailed financially more often than they used to be. In other words, their ability to absorb the need for a car repair, a home repair, dealing with perhaps an illness or an accident….So I think there are three trends that are really creating a very different landscape. One is that wages have been declining since the 1970s, so people just have less money. The second is that income is much more volatile. Income volatility has doubled over the past 30 years, which means that people are less likely to be able to predict how much money is coming in and out of their household, … And the third is this lack of a social welfare safety net and lack of or decline in an employer's provision of the kinds of benefits that created that kind of a buffer.
How do you see impacting or changing the North American credit union system?
What I think we're hoping for as a result of the center is that we'll all be more informed about these challenges and opportunities that are provided by the current situation and that the credit union system will change by adapting itself to this new reality.
 | Check out the full podcast with Filene Fellow Dr. Lisa Servon and hear about the work she will embark on over the next four years and her answer to the provocative question that led her to start one of her main research pursuits -- if alternative financial services are so bad for people, then why are so many people using them? |
Generous support for the Center of Consumer Financial Lives in Transition is provided by CUNA Mutual Group, BCU, Digital Federal Credit Union (DCU) and PSCU.