Stay Informed!

By Anne Li on 03/30/2011 @ 11:00 AM

Tags: Innovation, Innovators

Over the years, CFED has found sympathetic resonance with partners in the credit union movement, based on a shared interest in building the assets and financial security of individuals and families. Over the past year, we teamed up with Filene i3 (Ideas, Innovation, Implementation), which is committed to strengthening the credit union industry through the development of new products, services and business models.

Denise Gabel, Chief Innovaton Officer of the Filene Research Institute and CFED Innovative Idea Engineer, met with Kim Pate, CFED’s Vice President for External Relations, and Anne Li, CFED’s Program Director for Innovation, more than a year ago to brainstorm how to work together to promote innovation. From that conversation came an invitation from Denise for innovation@cfed to propose five consumer-focused financial solutions that needed labs for testing. The fruits of the creative efforts of five Filene i3 teams are described, together with other innovations, in a new report authored by Gabel titled Key Findings: Blueprints for Innovation.

• CFED Innovative Idea Champion Diane Browning worked with an i3 team to look at Retirement Bonds. While many of today’s headlines focus on financial problems such as credit card debt and mortgage foreclosures, the next looming issue could easily be caused by a lack of planning for retirement. Low- to moderate-income individuals and those who work for small businesses are likely to be particularly hard hit.
• Kim Pate worked with two i3 teams. Savings Exchange: The current structure of retirement incentives within the U.S. tax code does little to help those who have the fewest resources. The majority of the nation’s $367 billion in asset incentives helps households earning more than $80,000 a year (for more, read CFED’s report, Upside Down). While the 60% of American taxpayers making less than $38,000 share less than three percent of these benefits, the top one percent of households – whose average income exceeds $1.25 million – receives more than 45% of the subsidies.
• The Signal: Simply living to full life expectancy will disable an estimated 65 – 75% of Americans, who will need help managing benefits and understanding asset growth limits so their benefits stay intact. Given the complexities of disability benefits, consumers have to go to multiple websites and agencies to determine their benefit levels and asset limits. It is confusing, time-consuming and frustrating – and the margin for error is great.
• CFED’s Savings & Financial Security Program Director Leigh Tivol and Innovative Idea Champion Rimmy Malhotra worked with a team on Goalmine(TM) College Savings. For the first time in generations, young adults in the United States are no longer attaining post-secondary education at a higher rate than their parents. For students in low-income households, the challenge of obtaining a college degree is especially difficult. Families making less than $20,000 per year face an average cost burden of at least 44% of their annual incomes for four-year public universities, even after factoring in grant aid.
• CFED Senior Program Manager for Applied Research Kasey Wiedrich worked with a team on MI-COOP. For over 17 million Americans, the path to the American dream includes a manufactured home. With an average cost in 2009 of roughly $63,000, today’s manufactured housing offers an affordable entry into home ownership. This low price, relative to a site-built home, underscores how manufactured housing can help more families build assets and achieve affordable housing. Sadly, there are a number of obstacles in obtaining traditional financing on a manufactured home, specifically when the borrower is unable to afford a significant downpayment.

You can read about the innovations, from problem to solution, as well as the work of the other Filene i3 teams in Key Findings: Blueprints for Innovation by Denise Gabel. The publication is available for free download for a limited time only through the special innovation@cfed link, found here.

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