Fourteen credit unions will participate in an auto loan pilot program geared for low-income borrowers. The program, designed by the Filene Research Institute and the National Credit Union Foundation, rewards consumers for on-time payments, rather than penalizing them for late payments. Testing is expected to last 18 months. Filene’s financial services incubator will evaluate how well NCUF’s product works to provide loan accessibility. The incubator was started in August with a $700,000 grant from the Ford Foundation. The program was picked for testing from more than 20 submissions.
Among the credit unions that will test the subprime product are EECU Credit Union in Fort Worth, Texas; SchoolsFirst Federal Credit Union in Santa Ana, Calif.; and Summit Credit Union in Madison, Wis.
