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Filene: Implications of Sharing and Collaborative Consumption
Monday, November 30, 2015 6:30 AM

A new report from the Filene Research Institute investigates why credit unions have lagged behind in the access, or shared economy, despite the fact that its competitive advantage is driven by pooling resources.  

“Credit unions were onto this ‘new’ trend in the finance world in the 1800s when farmers first combined resources to cooperatively acquire equipment on credit, before the harvest season,” said Hope Jensen Schau, professor at the University of Arizona, and author of the research. “Credit unions have continued in a member-to-member, collaborative financial model that is, in light of the access economy we see today, extremely farsighted. However, credit unions are not mentioned in the popular press.”

To take the next step in collaborative, member-to-member financing, the research found that credit unions can:

  • Embrace and publicize the original credit union mission to essentially remind consumers that, when it comes to the shared economy, credit unions were the very first to the table;
  • Acknowledge the threat and opportunity of peer-to-peer lending companies. While companies such as Lending-Club pose a threat to credit unions, they also usher in an opportunity, as they have reinvigorated the idea of the shared economy, a concept credit unions can capitalize on; and
  • Review family requirements in financial instruments. Financial instruments with strict family definitions and requirements not only rule out alternative household arrangements, but also restrict financial products catered to those arrangements. Moving beyond legally sanctioned collectives aligns with the credit union mission.