A partnership among the Filene Research Institute, Visa and the Ford Foundation has led to 40 credit unions issuing nearly $85 million in loans to underbanked and minority consumers over the course of 18 months.

The results of that partnership are the subject of a new report from Filene released today. Filene’s “Reaching Minority Households Incubator” report analyzes individual taxpayer identification number lending, data-mined auto loans, QCash® small-dollar loans, community microfinance small-business lending and payday payoff® installment loans.

Samuel heard about the ITIN Lending Program offered through Illiana Credit Union and was able to secure an affordable home loan. He is one of several people whose stories are included in a new report from the Filene Research Institute on loans for minority and underbanked consumers.
Samuel heard about the ITIN Lending Program offered through Illiana Credit Union and was able to secure an affordable home loan. He is one of several people whose stories are included in a new report from the Filene Research Institute on loans for minority and underbanked consumers. Photo courtesy of the Filene Research Institute

Forty credit unions were included in the report’s final results, delivering 58,482 loans for a total of $84.8 million, reaching 18,558 underbanked consumers. The ITIN Lending program showed the most success, since credit unions were able to provide access to loans and credit to non-citizens using an individual taxpayer identification number as opposed to traditional forms of identification.

The report is also accompanied by a personal story of Sara Rodriguez, detailing her struggle to find work as a non-U.S. citizen. Thanks to a $500 business loan from Point West Credit Union, Rodriguez was able to start a sustainable local business known as Sara’s Tamales, selling homemade tamales, and ultimately financed her home from the revenue the business generated.

According to a video from Filene detailing Rodriguez’s story, 33 million households are unable to get the formal financial services they need from a financial institution, such as transactional and savings accounts and traditional loans.

Filene reports that while minorities comprise 30 percent of U.S. households, they hold only 10 percent of net household wealth. That statistic prompted a question the credit union "think and do tank" aimed to answer in its 112-page report: Could traditional FIs find financially sustainable ways to make a difference for financially vulnerable minority households?

“Meeting the needs of financially vulnerable populations and pursuing financial stability do not have to be mutually exclusive pursuits,” George Hofheimer, who wrote the report and is Filene’s chief knowledge officer, said in a statement. “Financial institutions are at the front lines of changing the disparity in access to basic financial services for African-American and Hispanic households. Providing products like those tested in the incubator program can be a win-win-win for the customer, financial institution and community.”

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