NAPERVILLE, Ill. (12/14/10)--Innovations from the Filene Research Institute were discussed and representatives from the Illinois State Treasurer’s Office presented small-dollar loan programs at the final in-person meeting of REAL Solutions Partner credit unions in Illinois for this year. The REAL Solutions program works through state credit union leagues to help credit unions offer services that have proven successful for people of modest means and “low wealth.” The Filene innovations centered on member savings and debt reduction initiatives, and loans and other support for small and start-up businesses. These included:
* Debt in Focus: A Web-based debt management tool that is anonymous, contains no financial jargon, and provides the users with a summary of their situation; *The Big Payoff Loan: A debt “snowball” plan; * Co-Opera: A co-op to co-op lending website that provides opportunity for more cooperation among cooperatives; * Two Grand Plan: A program to assist members with savings earmarked for emergency situations; * R-Bond: A solution that provides a way to reward low-income taxpayers for saving by allowing a portion of a tax refund to be directed to a savings bond; * UMatter: A member referral and benefit program; * 60-Day Loan Guarantee: Given that many less reputable lenders over the past few years have diminished trust in the marketplace, this program gives members a refund on paid interest in the first 60 days if the loan was returned/paid back, regardless of the reason; * B N Biz Fund: Provides young entrepreneurs with greater access to funding to start or expand a business; * CU Launch: A program designed to match specialized needs with customized services with a consultative approach to starting up a new business; and *LIFT (Lower Interest For Timeliness): Allows members to reduce their interest rate, pay their loan off quicker and reduce the amount of interest paid by making their loan payment on time-- each year they pay on time until the end of the term.
Staff from the Illinois Treasurer’s Office provided details on small-dollar loan opportunities available via its office. They are:
* Opportunity Illinois: The Illinois State Treasurer’s Office invests millions of dollars annually in low-interest loans to consumers and community development agencies through the Opportunity Illinois program. The office partners with eligible lenders to offer interest rate reductions to nonprofits, financial institutions, hospitals and credit unions to improve their services in underserved communities. The office also works with lenders to make loans affordable for Illinoisans with disabilities, families of U.S.military personnel called to duty, and victims of natural disasters. * The Opportunity Illinois: The micro loan program provides the capital that credit unions and community banks need to help low-income residents who might turn to payday lenders. Because of their low interest rates, micro loans may be a cost-effective way for low-income residents to pay for expenses and emergencies without racking up unmanageable debt. * Access to Capital through State Deposits: The Treasurer’s Office provides low-cost liquidity to banks, credit unions and savings and loan institutions located in the state. The goal is to provide an additional source of funding for Illinois financial institutions during the current economic and market conditions.
The Illinois Credit Union League and the Illinois Credit Union Foundation have teamed up with the National Credit Union Foundation to offer the “REAL Solutions for Low Wealth Households” program. Currently, 48 credit unions in the state are participating. REAL stands for Relevant, Effective, Asset-building, Loyalty-producing, and is being operated in 40 states and more than 1,100 credit unions.