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Reaching Minority Households

Nearly 50% of Hispanic and African American households are ‘unbanked’ or ‘underbanked’. Visa and Filene Research Institute have joined forces to help credit unions expand their reach to underserved households to tackle this disparity. 

Serving the Underserved

The Reaching Minority Households Incubator is designed to identify, test and replicate programs serving minority groups and other financially vulnerable populations in the US and Canada. Nearly 40 credit unions have committed to supporting this research and make an impact in their community.

Filene is working closely with each credit union to provide implementation expertise and resources throughout the pilot. 

Keep me informed!

Five programs in the Incubator:

Community Microfinance Small Business Lending 

  • Partner with low-income entrepreneurs to start or expand a small business
  • Pairs small business micro-loans with financial education and promotion of businesses via community boards in credit union branches
  • Over the past 15 years, nearly $3.6 million has been lent and 60% of borrowers have hired others to expand their business
  • Read more on the challenge small businesses face in this Filene Issue Brief

Payday Payoff Installment Loans

  • Helps consumers get out of an endless debt cycle and build a credit profile by consolidating up to $2,500 of high cost debt into an affordable installment loan
  • Uses a risk model from LexisNexis® Risk Solutions, leveraging alternative data to look beyond a credit score to identify qualified borrowers
  • To date, the program has issued over 11,700 loans for a total of $8.5 million in the portfolio with a 5% net charge-off ratio

QCash Quick Small-Dollar Loans 

  • Provide members an omni-channel lending solution that offers relationship based underwriting without a credit check for small, short-term unsecured loans
  • Improve access to members who can get instant funding in 60 seconds
  • In 2015, $28 million was lent leading to an estimated $3.7 million in member savings, with a net margin of 11%
  • QCash can be readily integrated with Symitar or Fiserv DNA core processing platforms

Non-Citizen Lending Program

  • Offers variety of consumer lending products to non-citizens with the same rates as traditional consumer lending products
  • Since program started in 2008, $2.1M in loans have been issued to non-citizen borrowers
  • Delinquency rates remain low (0.36%) and 70% of borrowers have maintained or improved credit scores

Data Mined Auto Loans 

  • Connects consumers with sub 640 credit scores to a new loan or refinance an existing high interest rate auto loan
  • Utilizes sophisticated data mining techniques to identify households that may benefit from an auto loan at traditional or non-prime rates
  • Industry data indicates 250 credit unions using similar techniques wrote 300,000 loans with $2.5 billion

Questions?

Adam Lee, incubator director for Filene, can help.