MADISON, Wis. (1/31/14)--Neighborhood Trust FCU's debt management program, The Trust Card, has been selected as the fifth and final product for the Filene Research Institute's accessible financial services incubator.
The Trust Card, which is a joint program between the $8.7 million-asset credit union and New York's Neighborhood Trust Financial Partners, aligns financial counseling with reducing credit card debt.
The Trust Card consolidates existing unsecured debt, offers a fair interest rate and sets a fixed monthly credit card payment that is within a consumer's budget.
Since its trial rollout 18 months ago, the New York credit union has consolidated about $300,000 of debt for 45 Trust Card users. The program saved borrowers thousands in interest and generated substantial revenue with zero charge-offs.
"We searched nationwide to find innovative financial products that benefit low- and moderate-income U.S. consumers," said Cynthia Campbell, director of innovation labs at Filene. "The Trust Card joins four other products to be tested in areas like non-prime auto loans, small dollar loans and employer-based loans."
The other four products are:
"Pay Yourself Back," Innovations in Poverty Action. This program switches consumers from making monthly loan payments to making savings deposits once the loan is paid off.
Employer-sponsored income advance loan, NorthCountry FCU, Burlington, Vt. Employees of select employer groups are eligible for small dollar loans that are auto-deducted from direct-deposited paychecks.
Non-prime auto lending, National Credit Union Foundation. Purchasing reliable transportation can be a challenge for some consumers, but is necessary for access to employment, housing and education. This program helps lenders fairly price and manage non-prime auto loans.
"Borrow and Save," National Federation of Community Development Credit Unions. This also is a small dollar loan that includes a component for building emergency savings.
Filene is seeking credit unions to test the Trust Card, "Pay Yourself Back" and the employer-sponsored income advance loan.