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Report #230 | | Members | Sign In

Debt in Focus: Rethinking Financial Guidance

Two years ago, members of i3 came to the realization that consumers are embarrassed; they need a trusted place where they can look at their own financial situation before they take the next steps in getting help. And the i3 team set out to build a solution.

  • Matt Davis Innovation Director at Filene Research Institute

Executive Summary

What do the residents of Eden Prairie, Minnesota; Columbia/Ellicott City, Maryland; and Newton, Massachusetts have in common? First, they take home the top three prizes according to Money magazine’s 2010 list of America’s best small cities. Second, their combined populations represent roughly the same number of consumers who have used a new online debt management tool collaboratively developed by credit unions to directly assist consumers: Debt in Focus. That’s a quarter of a million people!

What is the research about?

In this brief, Matt Davis retraces the Debt in Focus program development process, which took place over a relatively short time frame—two years. He slices the data that have been gathered from Debt in Focus’s 250,000 users to profile the types of consumers who are attracted to this program. Davis shares credit union best practices and leaves us with a clear path for getting involved and moving forward.

What are the credit union implications?

Credit unions already know the value of offering financial counseling services. Consider that counseling consumers before they make a large purchase can reduce their delinquency rates by 19%. Still, questions remain regarding the right delivery channel, metrics, and effective content. Debt in Focus was not designed to be the total cure, but rather to give consumers an inexpensive, anonymous way to become more engaged with their finances.