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Debt in Focus

Credit Union :Chino
Assets :$26,500,000
Address :2290 E Superior Street | Silver, NM 88061

Details :

User Qualifications :

Available through website to any person

Rates, Fees, and Terms :

  • A free, anonymous debt management tool for members
  • Free to credit unions acting as Beta sites during 2009
  • Beginning May 1, 2010, cost of program will be $599 for Filene members for a one-year license; $1,199 for a one-year license for non-Filene members; plus a one-time set-up fee of $150

Vendors/Systems/Technology Used :

Web-based program is offered through Filene Research Institute; no special technology is needed

Target Market :

Any consumer with financial challenges that prefers an anonymous, at-home budget solution

Marketing Strategy :

  • Credit union website
  • Staff referrals

Program Results/Statistics :

As of April 2010, 21 members from Chino FCU have used Debt in Focus.

Member Benefits :

  • Anonymous debt service that is free to end user
  • User friendly; user is able to save information and return to the tool at any time
  • Provides end user with a summary of their debt totals, ratios, and estimated budget
  • Provides end user with an honest look at one’s own situation that may be the impetus to change
  • Provides end user with an action plan to make improvements

Additional Information :

Debt in Focus emerged from a Filene Research Institute’s I3 think tank team and has been under Beta testing by 288 credit unions through April 30, 2010. The team found that at least three obstacles kept consumers from seeking traditional, face-to-face financial assistance:

  • They found discussions about personal finances was embarrassing and uncomfortable;
  • They were intimidated and confused by industry jargon;
  • The schedules of financial counselors were often inconvenient.

While anonymous, credit unions do receive monthly reports that show how many members have used the site. Staff at Chino Federal Credit Union refers members to Debt in Focus if members have been denied a loan because of their debt load or to help a member keep a car from repossession. “If the member is willing to work with our collector by using Debt in Focus to build a budget to manage his/her financial debt and is able to demonstrate an ability to manage the payment, we can allow the member to keep the car,” says Bill Stites, Chief Information Officer at Chino.

Another way that a credit union has used Debt in Focus is as a prerequisite to financial counseling service. America First Federal Credit Union in Utah found its demand for financial counseling exceeded its capacity to manage the load. Members are now steered to Debt in Focus first to self-assess their financial situation. Many are able to discover solutions to their debt management problems without further intervention. Others with more difficult situations that want one-on-one assistance can opt for personal intervention, but start with a clearer understanding of their needs and objectives.

The Credit Union Association of New Mexico (CUANM) plans to use Debt in Focus to complement its Savings Challenge program in 2010. Six credit unions will be participating in the Savings Challenge in New Mexico. All participants will use Debt in Focus to track their performance. Those playing at home will be able to use Debt in Focus as well, to improve their financial well-being.

Matt Davis, an Applied Research Advisor with the Filene Research Institute, notes that Debt in Focus is a good way to draw in new members or for existing members to learn more about their credit union products and services. As consumers hear about Debt in Focus or the Savings Challenge, they can go to the credit union’s website and click on the Debt in Focus link and the links to the credit union’s products and services.

An added enhancement to the program for 2010 is an expense section where users can list their expenses beyond just debt, says Davis. The program will provide the user with a budget based on inserted information. Davis states that 130 credit unions are ready to launch the Debt in Focus program in May when Beta testing is complete. He anticipates about 700 credit unions participating with 150,000 unique users. Some states are planning to obtain a license for every credit union in their state to offer the program.

Feedback from Debt in Focus users has been encouraging, states Davis. Of those surveyed, 70% agreed that the program helped them better manage their debt. “We receive ‘thank you’ notes from end users that say they had never taken the time to go through their financial affairs before,” says Davis. “They are also thankful for how quick and easy the program is to use.” Both Davis and Stites note that younger members are apt to use the program. “We see it as a tool to reaching teenagers,” states Stites, “when they are more impressionable and willing to make changes regarding their financial affairs.” Half of Debt in Focus users are younger than 36, notes Davis.