Jul 08 2016

The Embedded Credit Union Model for Low-Income Teens

Report  
Number  
411

A systemic problem in many low-income, urban communities is the lack of accessible financial services. This brief presents Money Locker, a credit union program for low-income teens living in financial service deserts.

Heidi Albert
Founder and Executive Director
Live It to Learn It
Report Number 411

Executive Summary

A systemic problem in many low-income, urban communities is the lack of accessible financial services. Low-income teenagers, in particular, are living in financial service deserts. Not only are there very few banks and/or credit unions in low-income communities, financial alternatives such as payday loan and check-cashing centers are thriving.

The few financial institutions that are available generally charge high fees, require minimum balances and have age requirements that are prohibitive to the teen market. More importantly, teens in low-income communities do not feel that banks are accessible.

What is the research about?

This research explores the expansion of credit union activities within schools or after-school programs serving unbanked or underbanked students. As a catalyst for this model, one Chicago-based organization has partnered with a local credit union to launch Money Locker, a credit union program for low-income teens. Money Locker physically brings the credit union to the students, embedded on site, reaching students where they are.

What are the credit union implications?

There are concrete steps that credit union leaders, schools, community centers and other non-profit organizations can take to help teenagers learn about finance and safely apply those skills within the landscape of the financial mainstream. The results of the Money Locker pilot will validate the efficacy of a teen-based credit union model.