Guest Blogger: George Hofheimer, chief knowledge officer, Filene Research Institute, www.filene.org

After a hectic day at work I rush home, pick up the kids from their various activities, walk the dog, exchange pleasantries with my wife and then decamp to the most dreaded question of the day: “What should we have for dinner?” Unlike the made-for-TV families, we don’t meal plan and have traditionally defaulted to a few trusty standby meals…until we started devouring “America’s Test Kitchen,” the popular show that demystifies everything related to the kitchen. Through this simple intervention we now have the tools, knowledge and (changing) behavior to deal with the dreaded “what’s for dinner?” query.

For the one in five American households that are financially underserved, the dreaded question they face is much more existential. It is “how do I stretch this week’s cash to…” feed my family, pay the rent, and other mandatories for survival. Unfortunately there is no such thing as a well financed, expertly produced, easy to digest program to demystify everything related to your wallet. However, my organization (and many others) is slowly chipping away to help close the gap so that every American has access to safe, affordable and easy-to-use financial services. Let me give you a few examples:

If one in five American households is underserved, one in two minority American households are un- or under-banked. So Filene set out to test financial products targeted at minority households with significant support from VISA and the Ford Foundation. We selected products that have worked well on a small scale in local markets and we are now testing these products across the U.S. to determine scalability, desirability and feasibility.

Although it is still early, I’d like to share the following updates:

  • Nearly 40 credit unions are actively testing one of five products which are mostly focused on short-term credit needs
  • One product, Non-Citizen Lending, is returning preliminary data from the 13 testing credit unions resulting in $9 million of affordable credit to non-citizens
  • Another product, Community Micro-Finance came to us from a Canadian credit union and we will soon get results in from nine credit unions that are testing the product in their communities

Filene is also working on an idea that is confusing (and expensive) for a significant portion of American society: student debt. Debt Dragon is an engaging, online tool that provides information and gentle coaching for prospective college students (and their parents) before they dive into a long-term financial contract. Finally, we are tackling the emerging need of inter-generational lending with a concept called Bank On Family.

The purpose of all these tests is to figure out what works for the confused/unique/struggling/pick your adjective consumer. Many of the credit unions we are working with are CDFIs and we encourage OFN Members to test with us. The results will not produce a tasty, quick meal like my family’s experience with America’s Test Kitchen, but you could be part of the solution to ensure today’s consumers have tools, knowledge and (changing) behavior to access safe, affordable and easy-to-use financial products.

If you are interested in learning more about testing opportunities, please contact me at georgeh@filene.org.

 

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