MADISON, Wis. (2/28/12)--A new report from the Filene Research Institute paints a picture of low-income consumers' financial habits while illuminating the challenges and opportunities credit unions have in serving them.
Members of this group "especially feel the costs of accessing cash, which for many is their payment and savings vehicle of choice. Contrary to stereotypes, they seem wary of payday loans and even responsible short-term debt. And many of them devise elaborate savings mechanisms outside of traditional savings accounts," said Filene.
The brief makes several policy recommendations and spells out several lessons for credit unions designing products for cash-centric consumers like those profiled in the report. Lessons include:
- Prepaid cards are seen as a substitute for a financial institution;
- Interviewees prize predicable, transparent fees; and
- Credit unions should offer transparent basic accounts.