Six credit unions across the Unites States to participate in the Pay Yourself Back (PYB) pilot.
MADISON, WI (July 3, 2014) — Filene Research Institute together with Innovations for Poverty Action (IPA) in New Haven, CT, announced today that the product incubator for the Pay Yourself Back (PYB) product, a savings mobilization product is full with six credit unions across the country participating. The PYB product is one of five products in the Filene Research Institute’s accessible financial services incubator funded by the Ford Foundation. The product was submitted by IPA and they are managing the product trial as a subcontractor of Filene Research Institute.
The idea for Pay Yourself Back came from the observation that, although many individuals struggle to set aside money for savings, they often are able to make room in their budgets for regular loan payments. Payments towards loans and contributions towards savings are thus seen by consumers in different ways, even though they can fulfill the same needs. Pay Yourself Back is designed to leverage a pre-existing habit of making payments to seamlessly convert borrowers into savers. The concept is simple: borrowers make a commitment to continue to make “payments” after they have finished paying off their loan. Instead of going to a lender, however, these payments go towards the person’s own savings account. The person is thus “paying herself back.”
“Since the Federal Credit Union Act of 1934, Credit Unions have been promoting thrift and meeting the credit and savings needs of consumers, especially persons of modest means, it is a part of who they are as a not-for-profit, member owned organization,” said Cynthia Campbell, director of innovation labs at Filene, “It makes sense they embraced Pay Yourself Back because it is another tool to help their members save money.”
INSERT – Comment from IPA
Credit unions across the country that will be testing the PYB product:
Educators CU, Racine, WI
District Government Employees FCU, Washington, DC
Cooperative Federal CU, Syracuse, NY
Holy Rosary CU, Kansas City, KS
Brooklyn Cooperative FCU, Brooklyn, NY
CTA C&M CU, Chicago, IL
Filene Research Institute is an independent, consumer finance think and do tank dedicated to scientific and thoughtful analysis about issues affecting the future of credit unions, retail banking and cooperative finance. Founded 25 years ago, Filene is a 501(c)(3) nonprofit organization. Nearly 1,000 members make the nonprofit’s research, innovation and impact programs possible.
Contact: Cynthia Campbell, Director of Innovation Labs, Filene Research Institute, 612 W Main Street, Madison, WI 53705 (608) 661-3755 CynthiaC@Filene.org