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    The 411 with REAL Solutions Field Coaches

    We asked our field coaches to tell us about an interesting REAL Solutions project they’re working on. Here’s what they told us:

    Mark Lynch is working with the Massachusetts League and two credit unions in that state to build a partnership with their Brazilian community. Specifically, he says –

    It is interesting because there is a tremendous opportunity for credit unions to become the provider of financial services to Brazilians, who are either unbanked, under banked or wrongly banked.

    The first step in the plan is for credit unions to have a presence at a Brazilian Expo in Boston on June 5 & 6. We hope to establish relationships with community leaders and then use these new relationships to develop strategies and action plans to serve Brazilians. It is also interesting because we have two credit unions that are passionate about working together on the project and are eager to bring other credit unions into the project as the strategy develops.

    In the long term, We hope that this could become a model for other states or even a national project.

    The next most likely step would be to attempt to duplicate the approach in Florida, which has the largest Brazilian population in the country. We think that the more success we have, the easier it will be to duplicate the strategy in other states.

    Vicki Joyal, our impact assessment guru, is working on a payday loan alternative (PDLA) impact assessment. She explains -

    I’ll be working on this project with multiple leagues, credit unions, and core processors to gather account-level data for members who use CU payday loan alternative products. I am anxious to help CU executives “follow” these members over time so that they can more accurately assess the direct financial benefit to member borrowers, the effectiveness of required savings components, and the extent to which PDLA users graduate into mainstream CU products/services.

    We’ll be able to provide these CUs with real figures and stories to use in advocacy efforts, as well as additional information to help them improve their PDLA products as needed.

    Nancy Pierce, our resident research expert, has this to say:

    I am working with a Kansas City Catholic credit union that is doing outreach through a parish church to the Latino community. Many of the households are undocumented. We recently held a focus group of five undocumented families and learned of their daily challenges and struggles to try to provide their families a better life than they may have had in Mexico. For example, they can’t send their children to state-run or even community colleges. They must send them to private colleges which are very expensive, but they feel they owe their children a good education so they can get better jobs.

    I am working with the CU to better understand their financial needs and how to develop products that meet those needs but still provide the CU with safeguards to ensure its safety and soundness. The output from this project will be a documented case analysis that can be used by other credit unions trying to accomplish similar outreach opportunities.

    I am also working on a savings toolkit for low wealth households. There are a number of interesting products that credit unions are using to help families dig themselves out of debt and start saving for their future. Examples are the Savings Challenge programs, prize-based savings, save the change programs, etc. I will be documenting how various models work and provide specific CU examples.

    I love doing these kinds of toolkits because they offer me the opportunity to talk with credit unions doing unique and innovative things to help low wealth households.

    Bill Myers: "Change creates opportunity, so I'm watching changes, looking for opportunities."

    • The interchange fees on plastic card transactions have given financial institutions a generous source of income which has been used to support member rewards and allow small CUs to have card programs. Retailers and consumers have their eyes on these charges and have successfully lobbied the Senate to regulate interchange income.
    • Similarly the regulation of Courtesy Overdraft fees will allow credit unions to reconsider their reliance on punitive fees as a primary income source.
    • Several recent studies of Financial Education have drawn the distinction between financial knowledge and financial capability. Previous financial education efforts have measured provider outputs (eg number of people attending a class) rather than impacts (the change in member financial lives). The difference is in action: making important financial decisions for one's own benefit.
    • Paper checks have declined from 61% of all payments in 2000 to only 26% in 2010. On line bill pay and prepaid cards are poised to become preferred payment methods.
    • Small CUs are faceing dire challenges. Collaboration may be one of the solutions. If small CUs can offload their backoffice and concentrate on member service, they may be able to obtain both efficiency and outstanding personal service.

    What about you, leagues and credit unions? What are you working on?

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