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Filene Examines Loan Needs in Minority Households Incubator
Thursday, August 9, 2018 6:45 AM

A partnership among the Filene Research Institute, Visa, and the Ford Foundation has led to 40 credit unions issuing nearly $85 million in loans to underbanked and minority consumers over the course of 18 months. The results of that partnership are the subject of a report released yesterday from Filene called Reaching Minority Households Incubator.

The report analyzes five products designed to meet the needs of minority households and reviewed for their potential for long-term sustainability. Those five products include: the individual taxpayer identification number lending, data-mined auto loans, QCash® small-dollar loans, community microfinance small-business lending, and payday payoff® installment loans.

Filene reports that while minorities comprise 30 percent of U.S. households, they hold only 10 percent of net household wealth. That statistic prompted a question the credit union "think and do tank" aimed to answer in its 112-page report: Could traditional FIs find financially sustainable ways to make a difference for financially vulnerable minority households?

“Meeting the needs of financially vulnerable populations and pursuing financial stability do not have to be mutually exclusive pursuits,” George Hofheimer, who wrote the report and is Filene’s chief knowledge officer, said in a statement. “Financial institutions are at the front lines of changing the disparity in access to basic financial services for African-American and Hispanic households. Providing products like those tested in the incubator program can be a win-win-win for the customer, financial institution and community.”

Download the report.