Savings Products to Help Low-Wealth Households ± A REAL Solutions® Implementation Guide is a 2010 publication of the National Credit

Union Foundation¶s REAL
Solutions® program.

About the National Credit Union Foundation (NCUF)
The National Credit Union Foundation (NCUF) raises charitable funds, runs innovative programs, and makes impactful grants for America¶s credit union movement. NCUF¶s mission is to ³promote and improve consumers¶ financial independence through credit unions.´ Among the NCUF programs achieving this mission: REAL Solutions® ² Helping millions of consumers gain access to affordable financial services, achieve financial literacy, grow savings, build assets, and buy homes. Development Education ² Leading training on cooperative principles in the modern consumer marketplace to overcome what credit unions identify as the greatest threat to their future: ³the eroding of credit union philosophy.´ Social Impact Management ² Meeting a ³triple bottom line´ that benefits credit unions, members, and communities.

About REAL Solutions®
REAL Solutions® is the signature program of the National Credit Union Foundation. REAL ² ³Relevant, Effective, Asset-building, Loyalty-producing´² Solutions® works to help credit unions offer a wide range of products and services that have proven successful in serving working families with low wealth and modest means. Using product/business models created and tested by credit unions, REAL Solutions® disseminates information to credit unions through special meetings, an online impact center at www.realsolutions.coop, and state and national conferences. As NCUF¶s signature program over the past three years, REAL Solutions® has been adopted in 37 states and is saving members tens of millions of dollars. It has now become a documented business strategy for credit unions to grow their memberships by serving the underserved. Real people with real needs are finding REAL Solutions® at credit unions.

About the Author
Nancy Pierce, Ph.D., is the President of Tipton Research Group in Kansas City, MO which provides research and consulting services to the credit union industry. She is a 25-year veteran of the credit union industry and served as president of Mazuma Credit Union in Kansas City, MO and Chairwoman of both the Missouri Credit Union Association and the Credit Union National Association (CUNA). Following her retirement from Mazuma Credit Union, Nancy received her Ph.D. in Consumer and Family Economics from the University of Missouri ± Columbia in 2004. She is currently serving as a Field Coach for the National Credit Union Foundation¶s REAL Solutions® program and has provided services in the following states: California, Colorado, Kansas, Missouri, Montana, New Mexico, Oregon, Texas and Wyoming.

Acknowledgements
I would like to express my gratitude to the following credit unions and associations that willingly shared information regarding their savings programs to help low-wealth households: Altana Federal Credit Union in Billings, MT American Airlines Credit Union in Fort Worth, TX Centra Credit Union in Columbus, IN Communicating Arts Credit Union in Detroit, MI CommunityAmerica Credit Union in Lenexa, KS Credit Union Association of New Mexico Day Air Credit Union in Kettering, OH Employees Credit Union in Estherville, IA First Financial Federal Credit Union in Wall, NJ Langley Federal Credit Union in Newport News, VA

Members Cooperative Credit Union in Cloquet, MN Metro Credit Union in Chelsea, MA North Island Financial Credit Union in San Diego, CA Prince George¶s Community Federal Credit Union in Upper Marlboro, MD Purdue Employees Federal Credit Union in West Lafayette, IN State Employees Credit Union in Raleigh, NC Weber State Credit Union in Ogden, UT Wright-Patt Credit Union in Fairborn, OH

Disclaimer
With respect to content of this publication, neither the National Credit Union Foundation, Inc. (NCUF) nor any of its affiliates or its or their respective employees make any express or implied warranty or assume any legal liability or responsibility for accuracy, completeness, or usefulness of any information, commercial product, service, process, provider, vendor, trade name/mark that is disclosed. References to any specific commercial product, service, process, provider, vendor, or trade name/mark in this publication also does not necessarily constitute or imply that such a product or provider is endorsed, recommended, or warranted by NCUF. The views and opinions of the authors expressed herein do not necessarily state or reflect those of NCUF and such reference shall not be used for advertising or product endorsement purposes. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is provided with the understanding that the publisher, NCUF, is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought.

For more information, contact:

REAL Solutions® c/o National Credit Union Foundation 601 Pennsylvania Avenue NW, Suite 600 Washington, DC 20004-2601 Phone: 800.356.9655, x6770 Email: lkitsch@.ncuf.coop Fax: 202.638.3912 Web: www.realsolutions.coop

Table of Contents
Introduction .......................................................................................................................................... 1 Small Savers Products ........................................................................................................................ 3 Model 1:Wealth Builder Account ..................................................................................................... 4 Model 2: MyFund Account .............................................................................................................. 6 Model 3: Pot of Gold Account ........................................................................................................ 8 Model 4: Dream Plan Share Certificate ........................................................................................ 10 Reverse- Tiered Savings Products ................................................................................................... 13 Model 5: TrueSaver Account ....................................................................................................... 14 Model 6: Langley Saves .............................................................................................................. 16 Model 7: Delta Package Share Account....................................................................................... 18 Round-up Savings Products ............................................................................................................. 20 Model 8: EasySaver..................................................................................................................... 21 Model 9: Save Your Change (Auto Savings) ................................................................................ 23 Model 10: MyFund+Sweeps ........................................................................................................ 25 Attached Savings Products .............................................................................................................. 28 Model 11: Auto Loan Plus ........................................................................................................... 29 Model 12: Savings Accelerator .................................................................................................... 32 Model 13: Salary Advance Loan (SALO) ..................................................................................... 35 Prize-Linked Savings Products ........................................................................................................ 38 Model 14: Save to Win ................................................................................................................ 39 Model 15: Super Savings ............................................................................................................ 44 Model 16: Emergency Fund Account ........................................................................................... 49 Savings Challenge Programs ........................................................................................................... 54 Model 17: Financial Makeover .................................................................................................... 55 Model 18: Savings Challenge NM ............................................................................................... 60 Individual Development Accounts (IDAs) ........................................................................................ 65 Model 19: FUEL Accounts .......................................................................................................... 66 Model 20: CUFP IDA Program .................................................................................................... 68 Other Savings Products .................................................................................................................... 71 Model 21: MatriMoney® ............................................................................................................... 72 Youth Savings ............................................................................................................................. 74

Club and Special Share Accounts ................................................................................................ 75 Safe Accounts ............................................................................................................................. 75 U.S. Savings Bonds ..................................................................................................................... 76 Concluding Remarks ......................................................................................................................... 78 Resources .......................................................................................................................................... 80

Introduction
A 2008 study from Alliant Credit Union and the International Society of Certified Employee Benefit Specialists found that 55% of American workers are living paycheck to paycheck, and only have the equivalent of one or less paychecks in savings to handle any financial emergency that may occur. Over 80% do not feel financially secure. The good news however, is given the current economic environment, more Americans have started to save again. Credit unions should seize this opportunity to lead the way to help low-wealth households build savings. Many credit unions may feel they are not in a position to build up deposits because of current weak capital levels as a result of losses or other challenges from the recent recession. They may feel now is not the time to add new savings products that could increase expenses and further diminish capital ratios. Unfortunately, this is a short-sighted view and the wrong approach to the current economic climate. First of all, low-wealth savings products are not necessarily going to result in an infusion of deposits. Low-wealth households, by definition, are those with little in the way of savings to support them during an economic blip. They are households struggling to save little by little. Second, low-wealth savings products do not necessarily have to be expensive products to introduce. With some slight modifications to share programs or certificate products, a credit union can implement a program that can help small savers build wealth. Third, and most importantly, it¶s an opportunity to build and strengthen relationships with struggling members. Many people are feeling particularly vulnerable and at a loss about where to turn for help as a result of personal financial setbacks or from the fear of such a setback and the effects it would have on their families. The opportunity is ripe to help these households prepare for tomorrow and improve their financial well-being. A report from the Center for Financial Services Innovation (CFSI) on ³Turning Today¶s Economic Inflection Point into Tomorrow¶s Savings Behavior,´ indicates that while the impetus exists today among low-income earners to save, they face cultural, behavioral, and structural barriers. Many of the models and examples provided in this implementation guide include recommendations on how to structure savings products so they overcome these behavioral challenges. For example, the report emphasizes automated savings, incentives to save, goal-setting savings, and innovations such as prize-linked savings to help low-wealth savers. Readers will find examples of all these suggestions in the implementation guide. REAL Solutions®¶ Savings Products for Low-Wealth Households Implementation Guide is structured by types of savings products and programs. The list includes: y Small savers products y Reverse-tiered savings products y Round-up savings products y Attached savings products y Prize-linked savings products y Savings challenge programs y Individual Development Accounts (IDAs) y Other savings products
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The CFSI report states that innovation is critical to help consumers save successfully. But organizations that step up to the challenge can be rewarded by bringing in many underbanked individuals to the savings fold, while improving organizational reputations. The savings products featured here demonstrate that credit unions are willing to depart from the norm and try new alternatives to help the low-wealth saver.

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Small Savers Products
What is meant by small savers products?
Imagine being wealth-poor and trying to come up with the $500 or $1,000 often required to open a better-rate savings certificate. You know you should save. You really do want to save. But that fraction of a percent that is being paid to your account doesn¶t provide much incentive to save. Furthermore, being wealth-poor, there are always financial emergencies or temptations that come along and somehow that little savings pittance seems to be better spent than saved. Small savers products are designed to fill that void. They are designed to have low barriers to entry and often feature an incentive if a savings goal is met or a penalty for early withdrawal.

How do small savers products help low-wealth households?
Most small savers products start with an opening balance of $100 or less and are often fashioned like a certificate or restricted savings account. Many require regular automated deposits to the account. Some feature an incentive when a goal is met; others have a penalty if the savings is closed or deposits are not made as agreed. Many pay a rate similar to a certificate for a comparable term. The low entry amount coupled with limited access to funds makes this a viable product for low-wealth households to help them build a savings habit.

Why should a credit union offer a small savers product?
Most credit unions have as their missions, words that equate to helping their members improve their financial well-being. ³Well-being´ is generally defined in terms of assets. One study found that 55% of American workers are living paycheck to paycheck, with only one or less of their equivalent paychecks in savings to handle a financial emergency. What better way to help the asset-poor develop a savings habit and build wealth than with a small savers product?

Who¶s doing it?
Four different credit union examples are featured here to help small savers build wealth or save for a goal. All four have low entry amounts to open the account, all require automated monthly deposits, and all have restrictions on withdrawals.

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Model 1: Wealth Builder Account Altana Federal Credit Union 3212 Central Ave. Billings, MT www.altanafcu.org Assets: $205 million Members: 21,600 Contact: Scott Avants, VP of Sales Savants@altanafcu.org

Introduced in 2008, Altana FCU¶s Wealth Builder Account is designed to have a small entry amount ($25) and small automated monthly deposits ($25). Members cannot withdraw funds from the account until $1,000 is saved; otherwise they pay a $25 penalty fee per transaction. If a monthly deposit is not made for two months in a row, the funds are transferred to a regular share savings account and the member is charged a $25 penalty fee. Product Features & Requirements: y A monthly automatic deposit of $25 or more is required y Withdrawals are limited to two free per month, after a $1,000 balance is reached and maintained y No withdrawals are permitted prior to reaching $1,000 without a $25 penalty fee per transaction y If the account is closed before a $1,000 balance is reached, a closing fee is imposed Product Pricing: y Dividends are earned, regardless of the balance y Dividend rate as of May 2010 was 1.00% APY Results as of May 2010: y # of Wealth Builder Accounts: 297 y $ balance of Wealth Builder Accounts: $1,156,810 y Average balance/accountholder: $3,895 Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Wealth Builder was initially introduced with a direct mail postcard, targeting two groups: o 18-34 year olds with household incomes of less than $30,000, and less than $5,000 in savings with the credit union o 35-54 year olds with household incomes between $30,000 and $99,999, and less than $5,000 in savings with the credit union y Today, most of the marketing is done by frontline staff to new and existing members; individuals who do not have a savings plan are particularly targeted and encouraged to save for a purpose ± no matter what that purpose may be

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Technological Considerations: A list of accounts each month that did not receive the minimum $25 deposit is produced by the credit union¶s core processor. Letters are sent to these members. If a deposit is not made the following month, the balance is transferred into the share savings account and the account is closed. Educational/Training/Staffing Considerations: Visual tools are essential for selling this product. Employees are trained to show members how to use online calculators so they can see the effect of their savings growing over time. This tool is tremendously effective, according to Scott Avants, VP of Sales. Measuring Success: y 297 savers with an average balance nearing $4,000 y Altana FCU¶s goal is to increase the number of accounts annually

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Model 2: MyFund Account Weber State Credit Union 4140 Harrison Blvd. Ogden, UT 84403 www.weberstatecu.com Assets: $89 million Members: 8,800 Contact: Dustin Allen, Product & Marketing Manager dustin@weberstatecu.com

Introduced in October 2009, the MyFund Account has as its premise the member¶s commitment to save for a particular goal. No deposit is required to open the account; however automatic monthly deposits of at least $10 are required and penalty-free withdrawals are limited to two per year. Product Features & Requirements: y No deposit required at time of opening account y Automatic deposits from payroll or another WSCU account is required; minimum amount of $10 per month; no maximum limit y Additional money can be added at any time and WSCU¶s MyFund+Sweeps checking feature goes to the MyFund Account (see WSCU¶s MyFund+Sweeps under Round- up Savings Products) y Two penalty-free withdrawals can be made from the account per calendar year Product Pricing: y The MyFund Account earns a higher dividend than regular share savings or even WSCU¶s highrate savings account y Withdrawals in excess of two per calendar year are charged $25 per withdrawal Results as of May 2010: y # MyFund Accounts: y $ balance of MyFund Accounts: y Average balance/accountholder: Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y WSCU Website y When product was launched, pads of paper with ³My __[insert savings goal]__ Fund´ were situated in branches so members could write their savings goals on them and post them on the walls. There were goals such as ³My Caribbean Cruise Fund´ or ³My Face Lift Fund,´ said Dustin Allen, Product & Marketing Manager. ³It was a lot of fun and very well received.´ Technological Considerations:
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142 in the first seven months $61,000+ in first seven months $430

y

WSCU uses Symitar Epysis¶ core processing system. This system has the capability to set up the withdrawal limits and automatic transfers required for this product

Educational/Training/Staffing Considerations: y Employees were trained on how the MyFund Account worked, and took part in the initial launch and posting of goals Measuring Success: y 142 accounts opened in first seven months y Continued interest and enthusiasm for a goal-based savings plan with limited access Additional Information: According to Allen, the two annual free withdrawals were determined by members¶ need to access their funds. One withdrawal is designated for a planned event such as Christmas or vacation money, and another withdrawal is designated for an unplanned event such as an emergency. This allows members enough access before their goal is reached or when something unforeseen occurs, but still maintains the account¶s intended discipline of saving on a regular basis toward a goal.

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Model 3: Pot of Gold Account Prince George¶s Community Federal Credit Union 14450 Old Mill Rd Upper Marlboro, MD 20772 www.princegeorgescfcu.org Assets: $116 million Members: 14,500 Contact: Polly Quinn, VP Marketing & Business Development PQuinn@princegeorgescfcu.org

Introduced in January 1995, the Pot of Gold Account is a goal-savings certificate over a five-year period. Members select the amount of money they wish to save in that time frame, monthly or bi-weekly automated deductions are set up, and when combined with a tiered-interest rate, the account grows until it reaches their desired financial goal. Product Features & Requirements: y Deposits must be through automatic transfer, payroll deduction, or ACH y Members must make 60 monthly or 130 bi-weekly deposits based on goals, as follows: o $10,000 tier $156.31/month $71.59/bi-weekly o $ 5,000 tier $ 79.70/month $36.50/bi-weekly o $ 3,000 tier $ 48.37/month $22.15/bi-weekly Product Pricing: y Rates are tiered based on account balance and as of May 2010 were: o < $2,500 1.0% o $2,500 - $5,000 2.0% o $5,000 - $7,500 2.5% o $7,500 - $10,000 3.0% Results as of May 2010: y # of Pot of Gold Accounts: 1,838 y $ balance of Pot of Gold Accounts: $7,288,327 y Average balance/accountholder: $3,933 Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Prince George¶s Community FCU¶s Website, newsletters, word-of-mouth Technological Considerations: No special technology is necessary. Educational/Training/Staffing Considerations:
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Pot of Gold Accounts are covered in product training for all new employees. Measuring Success: y The monthly or bi-weekly payments combined with the tiered interest rate ensure that members reach their financial goal within the five-year period The program is extremely popular with members, according to Polly Quinn, VP Marketing and Business Development. In fact, members ask for the account by name.

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Model 4: Dream Plan Share Certificate American Airlines Credit Union 4151 Amon Carter Blvd Fort Worth, TX 76155 www.aacreditunion.org Assets: $5 billion Members: 219,600 Contact: Becky Emmert, Manager of Deposit Programs Becky.Emmert@AAcreditunion.org

Introduced in August 2006, the Dream Plan is a goal savings certificate over a five-year period. Entry amount is only $25 and the minimum automated deposit per month is $25. Additional deposits to the account are allowed. There is a penalty for early withdrawal unless the money is used to finance a home purchase through the credit union. Product Features & Requirements: y $25 to open account; a member must set up a recurring deposit of at least $25 per month through payroll deduction, monthly transfer or ACH transfer y Additional deposits are allowed with no maximum deposit amount y Set up as 60-month share certificate y 180-day penalty for early withdrawals, unless certificate amount is used to purchase a home and is financed through AACU Product Pricing: y Rate as of May 2010 is 3.14% APY Results as of May 2010: y # of Dream Plan Share Certificates: 1,400 y $ balance of Dream Plan Share Certificates: $7.56 million y Average balance/accountholder: $5,400 Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Currently marketed as a savings ³Dream Plan´ to make dreams come true y Future marketing strategy will be focused on saving for the future y AACU Website, postcards, stuffers with maturity notices, etc. will be used Technological Considerations: An internal program detects when members haven¶t made a deposit to the certificate for 90 days and a reminder is sent to the member. After no investment activity for 120 days, the Dream Plan Share Certificate is closed and the member is charged an early withdrawal penalty of 180 days interest. Educational/Training/Staffing Considerations:
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Dream Plan accounts are included with product training for all new employees. Measuring Success: y Two different groups are currently using the Dream Plan according to Becky Emmert, Manager of Deposit Programs: o Small savers o Savers with greater means who locked in at a higher rate and are depositing additional funds into the account y Popular with grandparents who set up a long-term savings vehicle for their grandchildren Additional Information: While the Dream Plan account has been successful, the credit union plans to retool the certificate with greater emphasis on saving for the future, states Emmert. She says the environment is right to emphasize savings.

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Summary Comments
Many households are unprepared for life¶s economic blips, much less The Great Recession. The current economic environment is ripe for helping households build savings for unforeseen emergencies. The small savers products featured here do not require a lot of retooling by credit unions wishing to implement similar programs. Prince George¶s Community FCU¶s Pot of Gold and American Airlines CU¶s Dream Plan are 60-month share certificates that require low monthly automated deposits. Pot of Gold is designed so that the rate plus monthly or bi-weekly deposits ensure the member reaches a particular goal amount within five years. The Dream Plan pays an attractive rate and allows deposits in addition to the monthly minimum amounts. Some members have taken advantage of the higher rate and have moved additional deposits into the account which could increase a credit union¶s cost of funds more than originally planned. Both of these products penalize members 180 days of interest for early withdrawals. Altana FCU¶s Wealth Builder Account precludes withdrawals until the member reaches $1,000 in savings, or is charged a $25 penalty fee. Once the member reaches $1,000, two free withdrawals are allowed per month. The Wealth Builder is set up as a savings account without any specific term, but a minimum monthly automated deposit of $25 is required. The Wealth Builder is a good example of a product to help members build up savings to cover emergencies. Weber State CU¶s MyFund is an example of an emergency savings product coupled with a goal savings product. Two penalty-free withdrawals are permitted each year ± one to cover an unplanned event and one to cover the planned goal event. American Airlines CU¶s Dream Plan does permit early withdrawals if the member uses the funds as a down payment on a new house and finances the loan through the credit union. This kind of design that combines a savings goal with a loan could work quite well for credit unions. For example a goal to save for a down payment on a car could include monthly deposits to a higher-earning certificate, but any early withdrawal penalty is waived if the member combines the down payment with an auto loan through the credit union. Some products featured here pay a higher rate of interest, but require monitoring the accounts to ensure recurring deposits are made. A variation could be an account that pays a lower rate of return, but when a specified goal is reached, the member receives a percentage match if deposits are made as agreed. The tradeoff is lower monitoring and mailing costs during the product term, but higher auditing costs at the end. The upside is that when the member has reached his/her goal and collects the reward at the end, there is a contact opportunity during which the member¶s efforts are acknowledged and congratulated. This could be a good relationship-building strategy.

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Reverse-Tiered Savings Products
What is meant by reverse-tiered savings products?
Imagine an upside-down rate structure where you earn more on less! That¶s the concept behind a reverse-tiered savings product ± a higher interest rate is paid on lower deposit amounts. The structure is upside-down from traditional rate structures, where interest rates increase as deposit amounts increase. In a reverse-tiered structure, interest rates decrease as deposit amounts increase.

How do reverse-tiered savings products help low-wealth households?
Instead of rewarding only the biggest savers, a reverse-tiered savings product encourages small savers to take advantage of higher rates with their first-dollar saved. Most reverse-tiered savings products are structured like simple share accounts, but with an inverse rate structure, so that savers don¶t need to come up with $500 or even $100 to open a higher paying certificate or other savings product. Many start paying the higher rate on the minimum membership share deposit.

Why should a credit union offer a reverse-tiered savings product?
Why would a credit union want to pay more for less money? A reverse-tiered savings product is a great way for a credit union to market its uniqueness from banks or other financial institutions. It encourages small savers to open accounts and to begin saving and earning higher returns. Many credit unions use the product as a reward for members¶ business and loyalty, and require active checking accounts and/or direct deposit. A combination credit union checking account, direct deposit and a reverse-tiered savings product are a great way to help low-wealth households build wealth and establish self-sufficiency.

Who¶s doing it?
Three different credit unions and their product structures are featured here: y Wright-Patt Credit Union¶s TrueSaver Account y CommunityAmerica Credit Union¶s Delta Package, and y Langley Federal Credit Union¶s Langley Saves Wright-Patt CU¶s TrueSaver Account is the credit union¶s primary share account. Members must qualify for the higher interest rate up to $500, but don¶t have to open a separate account. Both Wright-Patt CU¶s and CommunityAmerica CU¶s reverse-tiered products are priced to reward members for desired activities. Langley FCU¶s product is structured to encourage a savings habit.

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Model 5: TrueSaver Account Wright-Patt Credit Union 2455 Executive Park Blvd Fairborn, OH 45324 www.wpcu.coop Assets: $1.8 billion Members: 190,400 Contact: Tammy Adamson, Member Operations Analyst tadamson@wpcu.coop

Introduced in July 2007, TrueSaver is the member¶s primary share account. In order to qualify for the premium rate paid on the first $500 in the account, members must have an active checking account, and either use direct deposit or receive eStatements.

Product Features & Requirements: y The TrueSaver account is the member¶s primary share account and requires a $5 minimum deposit y To receive the high savings rate for balances up to $500, members« o «18 years and older, must have an active Wright-Patt CU checking account (with at least four qualifying transactions per month), along with eStatements or direct deposit o «automatically qualify if under 18 years of age o «cannot be delinquent on any WPCU loan obligation, have any negative balance in any WPCU share account, or have caused WPCU a financial loss Product Pricing: y As of May 2010, TrueSaver pays 7% APY on savings up to $500; with a dividend rate of .50% on amounts over $500 y This is a variable rate that can change after the account is open and rates change Results for April 2010: y # of qualifying TrueSaver accounts: y % of members qualified to receive premium TrueSaver dividends: y $ dividends paid to qualifying TrueSaver accounts: y $ dividends paid to non-qualifying TrueSaver accounts: y Average balance/qualifying accountholder: Regulatory/Legal Considerations: No special considerations. 88,074 of 202,454 43½ % $223,579 $78,788 $2,800

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Marketing Strategies: y When initially launched, there were a lot of in-branch marketing promotions. In addition, emails and postcards were sent to members informing them of the new dividend structure y WPCU Website and newsletters continue to promote the unique dividend structure y TrueSaver is promoted within SEGs, schools, and the community as the credit union difference Technological Considerations: y Similar technology for any tiered-account structure y Member receives the higher dividend for only one TrueSaver account; WPCU¶s data processing system, Symitar, looks for matching SSNs and if more than one account is found, it pays the higher rate for the oldest account Educational/Training/Staffing Consideration: When TrueSaver was initially launched, classroom training was used to help employees understand the reverse-tiered structure and how it benefitted lower-savers. Employees are proud of the TrueSaver structure and how it helps people save. Measuring Success: y Over 45% of members qualify for the TrueSaver rate y The average TrueSaver share balance for qualifying members has increased from $2,037 in 2007 when the program was launched to its current average of $2,800 Additional Information: The TrueSaver share account ³sells´ itself, according to Tammy Adamson, Member Center Operations Analyst. When the program was launched, the focus was to encourage members with small balances to save by giving them an incentive. The concept of a reverse-tiered share account was completely new to the market, says Adamson. Employees embraced it 100%.

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Model 6: Langley Saves Langley Federal Credit Union 721 Lakefront Commons, Suite 400 Newport News, VA 23606 www.langleyfcu.org Assets: $1.5 billion Members: 177,000 Contact: Richard Hill, AVP RHill@Langleyfcu.org
Revised and reintroduced in April 2008, the Langley Saves account requires a recurring deposit of at least $10 per month and features a three-tiered upside down rate structure to help members learn to save, establish self-sufficiency, reduce debt, and build wealth.

Product Features & Requirements: y For those 19 years and older, a minimum recurring deposit of at least $10 each month is required y The upside down three-tiered rate structure was designed to help young people and those of modest means develop a savings habit while earning high dividends Product Pricing: y As of July 2010, interest rates were: Minimum Savings Amount Tier 1 Up to $500 Tier 2 >$500 to $2,500 Tier 3 >$2,500 y Annual Percentage Yield (APY) 5.10% 3.03% .50%

The dividend rate is variable and may change after an account is opened

Results as of March 2010: y # of Langley Saves accounts: 3,456 y $ balance of Langley Saves accounts: $4,907,520 y Average balance/accountholder: $1,420 Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Langley FCU Website y Newsletters y In area schools
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Technological Considerations: Similar technology as for any tiered structure account. Educational/Training/Staffing Consideration: The product is included with product training for new hires. Measuring Success: y Approximately 2% of members hold a Langley Saves account y Average balance is over $1,400 y Savings goals have included home ownership, an emergency account, school tuition, retirement, and debt repayment Additional Information: Richard Hill, AVP at Langley FCU, states the dividend structure may be more costly, but it definitely builds member loyalty and is a way to show the credit union difference. The account has been used in area schools to teach kids how dividends help savings grow and about the importance of saving, says Hill.

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Model 7: Delta Package Share Account CommunityAmerica Credit Union 9777 Ridge Dr. Lenexa, KS 66219 www.cacu.com Assets: $1.8 billion Members: 187,000 Contact: Mary Rhodes, VP of Product Management MRhodes@CACU.com

The Delta Share Package Account requires an active CommunityAmerica CU checking account and credit card to qualify for the premium rate up to $1,500. Product Features & Requirements: y Must have an active CACU checking account (defined as seven or more deposits and/or demand withdrawals in a month) and an active credit card (defined as four or more transactions in a month) Product Pricing: y As of May 2010, the Delta Share Package Account pays 5% APY on savings up to $1,500; the dividend rate is .25% on amounts over $1,500 y The dividend rate is variable and may change after an account is opened Results as of May 2010: y # of Delta Package Share Accounts: 2,000 y $ balance of Delta Package Share Accounts: $3,000,000 y Average balance/accountholder: $1,500 Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y CACU¶s Website y Employee cross-sales Technological Considerations: Similar technology as for any tiered structure account. Educational/Training/Staffing Consideration: The Delta Package is included as part of product training. Measuring Success: 2,000 members are currently taking advantage of the product which means they use the credit union¶s checking product and credit card in order to receive the higher rate that this product offers.

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Summary Comments
On the surface, a reverse-tiered savings product appears to be an expensive method to build and reward relationships. For example, Wright-Patt CU¶s 7% on the first $500 for qualifying accounts amounts to about $35 per year instead of $2.50 per year at the .50% dividend rate paid on non-qualifying accounts. Wright-Patt CU leadership believes the difference in cost of $32.50 per member is worth its value in obtaining a member¶s checking business and either eStatements or direct deposit. Similarly with CommunityAmerica CU¶s Delta Package, members must have an active checking and active credit card in exchange for the premium rate. Whereas Langley Saves does not necessarily reward for product usage, it does require a recurring monthly deposit. Presumably, most members would choose direct deposit or payroll deduction to ensure a regular deposit. Interestingly, only 2% of Langley FCU members and only 1% of CommunityAmerica CU members take advantage of the reverse-tiered savings products. Over 43% of Wright-Patt CU members qualify for TrueSaver, so they also use the credit union¶s checking account and direct deposit or eStatements. For most credit unions, 43% is a high checking account penetration rate. Credit unions interested in a reverse-tiered share structure similar to that offered by Wright-Patt CU should determine a break-even point for its rate structure. For example, if the credit union¶s penetration of checking accounts is low, what would the penetration rate need to be to offset the added cost of funds? If members had to opt for eStatements, how much would that save the credit union each year? Wright-Patt CU¶s 7% rate is quite generous. Other credit unions may not need to pay as much to get similar results. Wright-Patt CU suggests on its website that members should consider opening a certificate once they reach the $500 amount in their TrueSaver account. That should make sense to members wanting to earn as much as possible on their money. However, Wright-Patt CU reports that the average balance in the TrueSaver account has actually gone up almost $800 since the TrueSaver concept was launched in 2009 ± from $2,037 to $2,800. This implies that members are building their savings balances by choosing liquidity over rates. If that¶s the case, cost of funds may actually be declining for the credit union.

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Round-up Savings Products
What is meant by ³round-up´ savings products?
Imagine your change jar has gone electronic. Similar to emptying your pocket change into a jar at the end of the day, the change left over from debit or checking transactions are emptied into a special savings account. You only have to keep track of whole dollars and can forget about the amount to the right of the decimal point. In the case of a debit card round-up, transactions are rounded up to the next whole dollar and the difference is swept into a special savings account. In the case of a checking sweep account, any change left in the checking account at the end of the day is transferred to a special account.

How do ³round-up´ savings products help low-wealth households?
Few people miss their change and even fewer want to mess with it when trying to balance their checking accounts. ³Round-up´ products require little-to-no effort for participants to begin saving ± even if in small amounts. Eventually those small amounts do add up, just like when our change jar fills up and we are amazed at how much money it contains.

Why should a credit union offer a ³round-up´ savings product?
Many credit unions realize their members want to save, but have difficulty doing so. ³Round-up´ types of products are designed to help members who lack the discipline to save by making it very easy for them. Such products also encourage more members to use more services with the credit union ± in particular, transaction services that are often used to determine a member¶s primary financial institution.

Who¶s doing it?
Three different credit unions and their products are featured here: y Wright-Patt Credit Union¶s EasySaver y First Financial Federal Credit Union¶s Save Your Change (Auto Savings), and y Weber State Credit Union¶s MyFund+Sweeps Weber State CU¶s program sweeps change leftover in the member¶s checking account at the end of the day into a special account. First Financial FCU¶s round-up debit card savings program is designed for those savings for a special purpose. Wright-Patt CU¶s EasySaver program provides a quarterly percentage match to round-up transactions. In return, it has found members are more apt to transact business using their debit cards, which in turn provides the credit union with more interchange income.

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Model 8: EasySaver Wright-Patt Credit Union 2455 Executive Park Blvd Fairborn, OH 45324 www.wpcu.coop Assets: $1.8 billion Members: 190,400 Contact: Tammy Adamson, Member Operations Analyst tadamson@wpcu.coop
Wright-Patt CU¶s EasySaver ± tested with employees in December 2006 and introduced to members in January 2007 ± is a debit card round-up restricted savings account, where deposits can only be made through debit card use. The credit union also pays a match to the account each quarter if the member signs up for eStatements. Product Features & Requirements: y Must have a Wright-Patt CU (WPCU) checking account with debit card y Each debit transaction is rounded to the next dollar and the change is placed into a special EasySaver account y Lump sums are posted once a day from all debit card purchases made that day y The EasySaver is a restricted savings account and deposits can only be made through the debit round-ups y Withdrawals can be made at any member center or over the phone Product Pricing: y A small dividend (.50% as of May 2010) is paid quarterly to the account; in addition, WPCU matches debits quarterly in the following manner if the member also signs up for eStatements: o 50% of debit round-ups for the first 30 days from when the first debit transaction posts to the account o Thereafter, WPCU matches 5% of debit round-ups or the balance in the account, whichever is lower (the match will be based on debit round-up activity, unless a member has withdrawn money from the account and the balance is less than the round-up lump sum) Results as of May 2010: y # of EasySaver accounts: 12,937 y $ balance of EasySaver accounts: $649,826 y Average balance/accountholder: $50.43 Regulatory/Legal Considerations: Annual matches of $300 or more are reportable to the member on IRS Form 1099. The credit union caps its match at $300 per year.

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Marketing Strategies: y Whenever a member orders a debit card, employees are prompted to offer him/her the EasySaver account y Newsletters and the WPCU Website promote EasySaver with the following illustration of how it works: Technological Considerations: WPCU uses Symitar as its data processor. The credit union is willing to share programming information with credit unions using the same system if they are interested in providing a similar program to members. Educational/Training/Staffing Considerations: y Classroom PowerPoint training was completed when the program was first launched as part of staff training y An employee test group was used prior to the program¶s launch y All documents and training materials are on the credit union¶s internal network y Employees are encouraged to use the product so they are familiar with it and can help explain it to members Measuring Success: y Over 25% of active members with checking accounts take advantage of the EasySaver program y Over 89% of EasySaver accounts are also enrolled for eStatements and are therefore eligible for the credit union match y Many members have learned to wait until the match has been paid each quarter, and then transfer the money to their TrueSaver (primary share) account to take advantage of its higher interest rate (see WPCU¶s TrueSaver account in the ³Reverse-Tiered Savings Accounts´ section). Additional Information: Tammy Adamson, Member Center Operations Analyst, emphasizes that it is important for employees to understand how the debit round-up program works and how the matching occurs. Therefore, employees are strongly encouraged to take advantage of the product themselves, so they can explain how it works to members. Some members have opted out, Adamson explains, because they have trouble balancing their checking account. But employees are often able to give members guidelines on how to manage the balancing process. WPCU has found that the average number of transactions is higher for those members who use EasySaver. Whereas the credit union may pay more in matched funds as a result, it also receives more interchange income from the increase in transactions.

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Model 9: Save Your Change (Auto Savings) First Financial Federal Credit Union 1800 Rt. 34 N Wall, NJ 07719 www.firstffcu.com Assets: $181 million Members: 24,200 Contact: Jessica Revoir, Marketing Manager JRevoir@firstffcu.com

Introduced in December 2009, Save Your Change (Auto Savings) is a debit card round-up savings program with a purpose; that is to save for a down payment on an auto or other auto-related expenses. Product Features & Requirements: y Must have a First Financial FCU checking account with debit card y Each debit transaction is rounded to next dollar and the ³change´ is placed into a special Club Savings Account y Lump sums are posted once a day from all debit card purchases made that day y No dividends are paid to this account y The purpose of the special Auto Savings Club Account is to help with the down payment for an automobile, or other auto-related purposes y Withdrawals can only be made in a branch or over the phone y First Financial FCU reserves the right to close the account if the member is not using the account as an auto savings product y Members can opt out of the program at any time by closing the account Product Pricing: y No dividends are paid to the Club Account y If the member gets an auto loan with First Financial FCU, the credit union will match 10% of the Club Savings amount up to $250 y Otherwise members can withdraw Club Savings without penalty Results as of May 2010 (after four months): y # of Save Your Change (Auto Savings) accounts: 350 y $ balance of Save Your Change (Auto Savings) accounts: $11,200 y Average balance/accountholder: $32 Regulatory/Legal Considerations: No special considerations. Marketing Strategies:
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y y y y y y y

First Financial FCU Website In-branch signage using media TV screen ads, ATM screen ads, 8.5x11´ signs and 22x28´ framed posters Emails were sent to members about the program when it was first launched Added as a ³quick link´ from time to time on credit union email publications Mentioned on social media sites ± Facebook and Twitter Listed with other products and services in brochures, newsletters, annual report, etc. Featured in radio ads and ³pay per click´ online advertising

Technological Considerations: y The round-up transfer to Club Accounts is an automatic process set up by the IT department to run each evening y The program looks at all POS and PIN transactions made by members during the day; if a member has opted into this product, the program rounds up the leftover ³change´ and puts it into the member¶s Save Your Change account Educational/Training/Staffing Considerations: y Classroom PowerPoint training was completed when the program was first launched as part of staff training y The product is incorporated into training for new hires y An employee test group was used prior to the program¶s launch Measuring Success: y In just four months, about 350 members have signed up for the Auto Savings product y It is still too early in the program to tell how many Auto Savers will obtain a car loan y Participating members have indicated they are pleased to be able to save for their next auto purchase without having to think or do anything about it ± just by using their debit card Additional Information: If a member doesn¶t qualify for a car loan, then he/she doesn¶t qualify for the matched funds, but he/she can continue to use the product for a future auto loan. Saved funds can also be used for anything related to an auto purchase such as gas, insurance, first auto payment, etc. Jessica Revoir, Marketing Manager, states First Financial FCU is looking to incorporate more savings options besides Auto Savings, such as Tuition Savings, Home Savings, and ³Other´ Savings by the end of 2010. Revoir believes the round-up debit feature of the Auto Savings program helps those who might otherwise have trouble saving for a down payment on an automobile. While this was the primary reason for the product¶s inception, members can use it for other automobile-related needs as well.

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Model 10: MyFund+Sweeps Weber State Credit Union 4140 Harrison Blvd. Ogden, UT 84403 www.weberstatecu.com Assets: $89 million Members: 8,800 Contact: Dustin Allen, Product & Marketing Manager dustin@weberstatecu.com
Introduced in January 2010, the MyFund+Sweeps concept evolved from the original round-up savings products. Instead of using a round-up debit process which could lead to overdrafts and NSF or overdraft charges, the MyFund+Sweeps transfers non-whole dollar amounts left over in the checking account each day to a special MyFund savings account. Product Features & Requirements: y Must have a Weber State CU checking account and MyFund savings account (See Weber State MyFund account under the ³Small Savers Savings Products´ section) y Any change ($.01 to $.99) left in the checking account at the end of the day is automatically swept into the member¶s MyFund savings account Product Pricing: y The MyFund+Sweeps option simply provides an additional automatic transfer to a member¶s MyFund account at the end of each day (See Weber State MyFund account under the ³Small Savers Savings Products´ section) Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Weber State CU Website y A checking account and the sweep feature are offered to all new accounts; it is part of the new account process Technological Considerations: y Weber State CU uses the Symitar Epysis system; a custom program was written to schedule the end of day sweep from the checking to the MyFund account Educational/Training/Staffing Considerations: y An employee promotional contest using teams to see who could sign up the most members proved effective and fun y Employees are encouraged to use the sweep feature for their own checking accounts to become familiar with how it works

Additional Information:
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The sweep feature for Weber State CU¶s checking account probably appeals more to those members who like to check their account each day and know what their balance is and what change will be swept to the MyFund account, says Dustin Allen, Product & Marketing Manager. It may not be as appealing to those who don¶t check their accounts frequently and would find the sweep feature more difficult to take into consideration when it came time to reconcile account balances.

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Summary Comments
Wright-Patt CU¶s EasySaver program follows the original business plan developed by the Filene i3 team that conceived of the credit union debit card savings program, similar to Bank of America¶s Keep the Change® model. The business plan suggests using quarterly 5% matches, and this is in fact what WrightPatt CU uses for EasySaver. Wright-Patt CU has had great success with its EasySaver program, as 25% of active members with checking accounts use the product. Further, 89% of users have enrolled to receive eStatements, making them eligible for the match. First Financial FCU¶s Save Your Change and Weber State CU¶s MyFund+Sweeps are programs that evolved from the original model. Both credit unions had representatives on Filene¶s 30 Under 30 ³Change Your Savings´ team. The team addressed the fact that round-up savings programs make it too easy for members to transfer their rounded up savings back into checking, thereby diminishing the savings incentive. The team suggested using savings goals in conjunction with the change ³round-up,´ so that users would have a reason to leave funds in the savings account. First Financial FCU is testing this concept by using saving for auto expenses as its goal. It does not provide a match, nor does it pay dividends to the account, but it does provide a match up to $250 if the money is used to purchase a car through the credit union. The product has only been available for four months, so it is too early to determine its effectiveness. The credit union plans to provide more savings goal options in 2011. Weber State CU is testing a checking account sweep in lieu of a debit round-up. Any change left over in a member¶s checking account at the end of the day is swept into a special savings account ± MyFund ± which is a goal-oriented savings program. Withdrawals are restricted to two free per year. The ³sweep´ is also a new product feature and it is too early to measure results. The MyFund account does pay a higher rate of interest than does the credit union¶s regular savings account. SAFE Credit Union in California launched its Perfect Cents debit round-up program in 2007 after completing a pilot study and survey of the program. While it used the standard 5% match during the pilot, it decided to eliminate the match for the full program. The survey found 75% of pilot users would continue using the feature even without a match. SAFE CU¶s program sweeps the Perfect Cents change into the Share Savings Account or other savings product selected by the member. How effective are round-up programs when it comes to helping members save? The average balances for the models featured in this implementation guide suggest they are not very effective. However, Wright-Patt CU¶s members have learned to wait for the match to be paid, after which they transfer the money to their TrueSaver accounts to take advantage of the higher dividend rate. So conceivably, the money is still being saved ± just in a higher-paying account. First Financial FCU¶s and Weber State CU¶s programs are too new to determine effectiveness. The concept of the money being swept into a goaloriented savings account appears to make sense where withdrawals are restricted, providing the account pays a higher rate of return.

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Attached Savings Products
What is meant by attached savings products?
Imagine if with each loan advance or with each loan payment you make, a portion of the funds automatically goes into savings. Would you miss it? Combining a savings component with the transaction of borrowing money can be an effective solution to help consumers save.

How do attached savings products help low-wealth households?
Many low-wealth households may have the wherewithal to save, but lack the discipline to save on a regular basis. When individuals close on a loan, whether it is for a purchase or for an emergency, they are generally more willing to consider setting aside a small amount into a savings account for future needs. After all, immediate needs have been satisfied, so why not use the opportunity to help them prepare for the future? Some savings components can be a requirement for obtaining the loan; some can be the member¶s choice (i.e., they can opt-in), but once in, there are penalties for early withdrawals or cancellations. The concept is generally to make the attached savings component an automatic and effortless process so that it becomes out of sight and out of mind.

Why should a credit union offer an attached savings product?
A loan + savings combination uses two core credit union products. Product development should be minor. In addition, it is an easy and effective way to help members save for future emergencies or goals. Automated collection of payments, including the savings component, makes the product economically successful for the credit union and effortless for the member. As such, it could be used to cross-sell more members on direct deposit and payroll deduction.

Who¶s doing it?
Three credit union products are featured here: y Day Air Credit Unon¶s Auto Loan Plus product y Purdue Employees FCU¶s Savings Accelerator product, and y State Employees Credit Union¶s payday lending alternative product Day Air Credit Union was an early provider of tying a savings product to a loan with its Auto Loan Plus product. Purdue Employees FCU ties a certificate to an auto loan with a matching rate and term through its Savings Accelerator product. And State Employees Credit Union ties a very effective savings requirement to its payday lending alternative product.

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Model 11: Auto Loan Plus Day Air Credit Union 3501 Wilmington Pike Kettering, OH 45429 www.dayair.org Assets: $206 Million Members: 25,600 Contact: Melissa Johnson, SVP MJohnson@dayair.org
Introduced in July 2007, Auto Loan Plus allows car loan borrowers to commit to automatic monthly savings in a time deposit certificate. Early withdrawals are penalized unless for documented auto repairs. Product Features & Requirements: y A restricted certificate is opened with a maturity date that matches the loan payoff date y Members can add up to $30 to their loan payment, but no minimum amount is required; often members simply round their payment up to an even amount y Share certificate rate is equal to a 60-month certificate y Automatic payments for both the loan payment and the savings amount are required y Funds can be disbursed without penalty under the following conditions: o repairs for the auto that secures the loan (a copy of the repair invoice is required) o end-of-loan term (money can be used for any purpose) y At maturity, funds are transferred to the member¶s main share account Product Pricing: y As of May 2010, the credit union¶s 60-month certificate paid a rate of 3% y Early withdrawal from the share certificate results in a $50 fee and loss of 180 days of interest y The savings component can be canceled with a $25 fee and forfeiture of all dividends earned Results as of May 2010: y # of Auto Loan Plus accounts: 99 y $ balance of certificate balances: $45,706 y Average term is 5 years y Average round-up amount is $10/month y About 70% of borrowers follow through to the end of the loan term or use money for auto repairs; the remaining 30% decide to pay the penalty and take the money Regulatory/Legal Considerations: y The loan agreement indicates the actual loan payment without the savings amount y An addendum is signed at loan closing with the appropriate savings disclosure as well as an agreement for the adjusted loan payment amount (see attached disclosure) Marketing Strategies: y Mostly employee-driven at time of loan closing

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Technological Considerations: y The certificate is set up as a restricted savings account similar to a share-secured loan y No other special technology is required Educational/Training/Staffing Considerations: y The product is included with training for new hires y Emphasizing the value of the savings component to employees helps them cross-sell the product to members Measuring Success: y About 70% of members who take advantage of the Auto Loan Plus product keep up the savings portion of the loan until loan maturity or for car repairs y According to Melissa Johnson, SVP, members often forget they have part of their loan payment going into a savings certificate and are pleasantly surprised when they come into the credit union to get a loan for car repairs and discover they have the money in savings y The benefit of ³out of sight, out of mind´ savings helps members who may often have trouble building savings while making an auto loan payment

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Day Air Credit Union¶s Auto Loan Plus Program Addendum

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Model 12: Savings Accelerator Purdue Employees Federal Credit Union 1551 Win Hentschel Blvd. West Lafayette, IN 47906 www.purdueefcu.com Assets: $612 million Members: 57,200 Contact: Nicole Thompson, Communications Specialist nthompson@purdueefcu.com Evelyn Royer, VP Risk Management eroyer@purdueefcu.com
Introduced in August 2008, Purdue Employees FCU¶s Savings Accelerator product can save members up to 10% of their loan payment in a certificate that matches the loan¶s term and rate. Product Features & Requirements: y Must have direct deposit y Loan payments and share certificate deposits must be made through auto transfer and at the same frequency as direct deposits y Borrower may deposit up to 10% of the monthly loan payment into share certificate y Early withdrawal from share certificate results in a penalty and loss of dividends y Offer valid on new PEFCU auto loans with terms not to exceed 60 months, or refinances with remaining terms of 36 or more months y Financing on used vehicles is available up to retail NADA value Product Pricing: y Share certificate rate and term matches the loan rate and term y Savings example: On a $10,000 auto loan with a 48-month term and monthly payments of $237.15, 10% of the monthly loan payment or $23.71 per month gets deposited into the certificate 10% Deposit 12 Months 24 Months 36 Months 40 Months $284.52 $569.04 $853.56 $1,138.08 Rate 6.50% 6.50% 6.50% 6.50% Certificate Balance $293.15 $605.94 $939.67 $1,295.75

Your Total Savings = $1,295.75

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Results as of March 2010: y # of Savings Accelerator accounts: 59 y $ balance of Savings Accelerator accounts: $12,229 y Average balance/accountholder: $207 y An average of five Savings Accelerator accounts are opened each month Regulatory/Legal Considerations: No special notice disclosures are required for the loan; however, the certificate type and specifications are noted on a certificate disclosure. Marketing Strategies: y PEFCU Website pages (promotions, auto loans, home page) y Targeted offers to online banking users y Borrowers are informed about the Savings Accelerator product when processing an auto loan y Other strategies that are used at times: o ³Ads´ on in-branch televisions o 8.5x11 promotional flyers on sales staff desks (see attached) o Distribution of buckslips in branch lobbies and drive-through lanes, and via community business partners and special events y Mentioned in the bi-annual direct mail invitation to apply for an auto loan sent to members with current auto loans that are 18 to 24 months old Technological Considerations: A special certificate was set up that links the certificate with the loan and can be managed by frontline staff. Educational/Training/Staffing Considerations: Nicole Thompson, Communications Specialist, notes that it is important to help staff respond to member questions about whether it¶s better to simply pay the additional dollars on the loan to pay it off faster. The focus of the Savings Accelerator product is to help individuals develop a savings habit. Once the loan is paid off, it is hoped the member will continue to save for future needs. Thompson also states that employees may need to be reminded to offer this product. Often they are not thinking about a deposit product while explaining a loan to a member. However, once they are used to having this new product, it simply becomes part of the package that gets offered to members each time. Measuring Success: y About five Savings Accelerator accounts are being opened per month y Current average certificate balance is $207 Additional Information: The product is particularly appealing to graduating college students, notes Thompson. She thinks this is because they see it as an opportunity to begin saving. It becomes a forced-savings measure for those without the willpower to save directly.

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Purdue Employees FCU¶s Savings Accelerator Brochure

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Model 13: Salary Advance Loan (SALO) State Employees¶ Credit Union 1000 Wade Ave. Raleigh, NC 27605 www.ncsecu.org Assets: $20.6 billion Members: 1.6 million Contact: Phil Greer, SVP Loan Administration Phil.greer@ncsecu.org
State Employees¶ Credit Union (SECU) began offering its Salary Advance Loan (SALO) product in January 2001 as a short-term cash loan alternative to those offered by payday lenders. In 2003, SECU modified the loan product to require a deposit of 5% of the loan amount into a restricted savings account. The modification was made because members continued to depend upon a cash advance to make it until payday. The hope was to help members build sufficient savings in order to break them from the payday loan cycle. To accomplish this goal, SECU prohibited members who withdrew their money from the restricted savings account from taking a SALO advance for a period of six months. This provision helped ensure that members would continue to build savings until they felt self-reliant within the credit union. Product Features & Requirements: y A line-of-credit up to a maximum of $500 y 5% of each loan advance is placed into the Salary Advance ³Cash Account´ and is pledged as collateral for the loan y Access to the Cash Account is restricted and withdrawal of funds could suspend borrowing privileges on the SALO for up to 6 months y Direct deposit is required and the loan must be repaid on the member¶s next pay date Product Pricing: y 12% APR y No fees y The Salary Advance Cash Account earns interest Results as of April 2010: y # of members who have used SALO: 134,881 y # of SALO advances in April: 79,250 y $ loaned in April: $29,788,820 y $ interest earned on SALO since inception of the program in 2001: $10,116,468 y $ net charge-offs since program inception: $3,070,000 Regulatory/Legal Considerations: The required savings is disclosed in the Reg Z documentation on the loan.

Marketing Strategies:
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The Salary Advance Loan is primarily marketed by loan staff to members who do not qualify for SECU¶s normal unsecured loan program. Technological Considerations: The credit union automates its SALO loan product as much as possible. Members can use the credit union¶s voice response system or Internet to access funds. The automated system determines the loan amount available to the member, whether the member has direct deposit, and whether the member puts the required 5% into savings. It then places the member¶s loan funds into a predetermined account. Educational/Training/Staffing Considerations: No special training required. The SALO loan and its features are included in any product training for new hires. Measuring Success: y Approximately 5% of members are using this product y Loan losses as a percent of dollars loaned is .21% y Members who have previously been unable to save, suddenly have savings; one individual with over $3,000 in savings continues to use the SALO loan because it has provided him with a means of saving money. y Collectively, there is in excess of $17.6 million on deposit in the cash accounts associated with SALO Additional Information: The SALO loan program is more than just a low cost alternative to payday lenders, states Phil Greer, SVP Loan Administration. It also provides the opportunity to build savings, re-establish a positive payment history, and gain access to free financial counseling. Coupled with an array of appropriate financial services, members using the SALO product have a chance to succeed.

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Summary Comments
When a savings component is optional, it is important to keep reinforcing the importance and benefit to borrowers to credit union employees. Case in point, Melissa Johnson, SVP at Day Air CU realized that no Auto Loan Plus savings products had been added for the first five months of 2010. In the past the credit union had been generating about six new Auto Loan Plus accounts per month. Employees definitely needed a reminder about this product offering. Whereas Day Air CU¶s certificate savings product is opened with a maturity date that matches the loan payoff date, the certificate rate is similar to the credit union¶s 60-month certificate. The emphasis for the savings product is to help with any necessary car repairs; and with appropriate receipts, members can withdraw money without penalty. Purdue Employees FCU¶s Savings Accelerator product is designed to be a savings product with a term and rate that matches the loan. No early withdrawals are permitted without penalty. Since the product has only been available for less than two years, it¶s too early to determine its success in helping members develop a regular savings habit. Many credit unions have tried tying a forced savings component to a payday loan alternative product to help members get out of the payday cycle. For the most part they have found that when members pay the loan off, they also deplete the savings portion. One credit union model requires members to double their cash loan needs with half of the loan amount going into a restricted savings account. The wellintentioned goal was that when the loan was paid in full, the member would have access to a similar amount in savings for the next emergency. What typically happens, however, is that when the loan balance matches the savings balance, the member pays the remaining loan off in order to turn around and borrow again. SECU¶s SALO loan doesn¶t restrict members from withdrawing their savings when the loan is paid in full. However, it does preclude the member from borrowing again for six months. For this popular low-priced loan, that¶s incentive enough for borrowers to leave their money in the restricted account until they are ready to go it alone.

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Prize Linked Savings Products
What is meant by prize-linked savings products?
Imagine putting $25 into a savings account and then getting a call from your credit union telling you that your $25 savings entry just won $100,000. That¶s a pretty good return on your money! A prize-linked savings product is simply a savings account that offers prizes through sweepstakes entries in addition to earning interest. To participate, members simply deposit money into a specific prize-linked savings account and earn entries based on the amount saved.

How do prize-linked savings products help low-wealth households?
According to the Filene Research Institute¶s 2009 Final Project Results for ³Save to Win,´ 57% of adults play the lottery and 80% of lottery revenue comes from players with incomes of less than $50,000 per year. There is something very powerful and alluring about the possibility of winning a prize or gaining in the short-run rather than the long, arduous task of building savings through compound interest. The possibility of striking it rich by winning the lottery has much stronger appeal to lower-income households because for them the possibility of getting rich in any other manner is incongruous with their daily financial struggles. During the Save to Win project, 11,500 account holders saved $8.5 million. The project successfully attracted non-savers, the asset-poor, and low-to-moderate income groups. Of those completing a survey, 56% reported they had not saved regularly before participating in Save to Win. Those reporting no (zero) financial assets upon opening the account, were on average, able to save $263.

Why should a credit union offer a prize-linked savings product?
³Winning´ is a powerful incentive regardless of the prize size. Save to Win extends the credit union mission of helping members improve their financial well-being. To the extent that Save to Win deposits represent a redirection of income from a form of entertainment (i.e., playing the lottery) to a form of saving, a prize-linked savings product may help change habits from consumption to saving.

Who¶s doing it?
Prize-linked savings programs are catching on. Eight credit unions from the Michigan Credit Union League participated in the 2009 Save to Win project supported by the Filene Research Institute and the Doorways to Dreams (D2D) fund. Communicating Arts Credit Union was one of the eight and is featured here. Centra Credit Union was one of the original credit unions to offer the Filene i3 product and its Super Savings is still going strong as reported here. The third example, Members Cooperative Credit Union, offers a slightly different twist on the program and uses the allure of prizes to get members to sign up for an Emergency Fund Account.

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Model 14: Save to Win Communicating Arts Credit Union 630 Howard Detroit, MI 48226 www.CACUonline.org Assets: $30 million Members: 8,100 Contact: Kim Vermander, VP Lending & Development Kim@CACUonline.org
Introduced in 2009, Save to Win is a prize-linked certificate program offered through the Michigan Credit Union League (MCUL). In 2009, eight credit unions participated in the project, one of which was Communicating Arts Credit Union (CACU). In 2010 there are 19 Michigan credit unions participating in the program. There are 15 cash prizes awarded each month with a grand prize of $100,000 drawn from all eligible members at all participating credit unions. In addition, CACU is offering 10 monthly cash prizes for eligible CACU members. Product Features & Requirements: y Must be at least 18 years of age, a legal resident of the state of Michigan, and a member in good standing with the credit union y Members must open a one-year special share certificate with a minimum deposit of $25 y Each $25 increase in the member¶s monthly balance qualifies as a drawing entry, with a maximum of 10 entries per month per member y To be eligible, account must be open and active at the time of the drawing y Only one withdrawal is allowed per year y A participating member is limited to winning one prize per month Product Pricing: y Participating credit unions pay an interest rate that varies from 1% to 1.5%; CACU pays 1% y In 2009, the per-credit union contribution was $10,000; this went toward funding the grand prize, plus $5,000 in individual credit union monthly prizes y In 2010, MCUL has committed to covering the cost of all overall prizes, with the exception of individual credit union monthly prizes y In 2010, 15 overall monthly cash prizes will be awarded that range in size from $125 to $1,000 y CACU will offer 10 monthly cash prizes ranging in size from $15 to $100 y In addition, there will be one overall grand prize winner of $100,000 Results for 2009: y Communicating Arts CU: o # of Save to Win accounts: 1,078 o $ balance of Save to Win accounts: $307,000 o Average balance/accountholder: $283

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y

All MCUL credit union participants: o # of Save to Win accounts: 11,500 o $ balance of Save to Win accounts: $8.5 million o Average balance/accountholder: $739

Regulatory/Legal Considerations: The two principal areas of law governing lottery-based prize-linked savings products are gambling and banking, both of which are heavily regulated by the federal government and individual states. A lottery is an event in which a prize is awarded based on chance, where entry is gained by giving something of value. A sweepstakes, by contrast, is a game of chance in which entry is open to all entrants without any payment or other consideration. (For a complete discussion of legal and regulatory considerations, see Filene i3¶s ³Save to Win: 2009 Final Project Results & 2010 Implications for Credit Unions.´ Marketing Strategies: y Marketing planning and strategy were among the core services provided by D2D, the Filene Research Institute, and MCUL, with involvement from participating credit unions y A slogan that caught on: ³What Would You Do with $100,000?´ y Participating credit unions held a friendly competition to see who could open the most accounts between Memorial Day and Independence Day y Individual employee incentives tied to sales targets Technological Considerations: Some IT considerations may be necessary to calculate the number of eligible entries. With the Save to Win product, entries are calculated based on each $25 increase from the previous month. Educational/Training/Staffing Considerations: y Frontline employees are the most important ambassadors for the product y Sales training and sales incentives helped generate strong take-up of the program Measuring Success: y Communicating Arts CU: o Had the highest penetration of members using the product among participating credit unions: 15% of CACU¶s members participated in the product o Highest percentage of asset poor (67%) among participating credit unions y All MCUL credit union participants: o 56% of Save to Win participants reported they had not saved regularly before using this product o Among this group, an average of $588 was saved o Feedback from participants included ³Anyone can afford $25´ to participate and save Additional Information: Save to Win was conceived as a ³shared services´ pilot, where many functions such as marketing, technological issues, and prize administration were centralized. The collaboration enabled many credit unions that wouldn¶t have been able to offer a similar product on their own to be part of the much larger scale project. Communicating Arts CU had previously considered offering a prize-linked savings product but found the obstacles insurmountable for its size. The credit union jumped at the chance to participate in the Michigan project, according to Kim Vermander, VP Lending & Development. Many of the credit union¶s lower income members aren¶t regular savers, but love the chance to win monthly prizes, she says. The low barrier to entry makes Save to Win particularly appealing to low-wealth and low-income households.

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Communicating Arts Credit Union Save to WinŒ Savings Promotion Raffle OFFICIAL ACCOUNT AND PRIZE ENTRY RULES 1. How to Enter: The Save to WinŒ Savings Promotion Raffle (³Raffle´) begins on January 1, 2010 and ends December 31, 2010 (³Raffle Period´). Automatic Entries: An eligible member of a participating credit union automatically receives Raffle entries based upon the following: Monthly Prize Drawing ± One (1) entry monthly for every $25 increase in the monthly balance for the member in a Qualifying Share Certificate Account at month¶s end, with a maximum of ten (10) entries per month per member. Grand Prize Drawing ± One (1) entry monthly for every $25 increase in the monthly balance for the member in a Qualifying Share Certificate Account at each month¶s end, with a maximum of ten (10) entries per month per member. Participating members are limited to a total of 120 entries during the Raffle Period for the Grand Prize Drawing. Communicating Arts Credit Union (CACU) Members Monthly Prize Drawing - One (1) entry monthly for every $25 increase in the monthly balance for the member in a Qualifying Share Certificate Account at month¶s end, with a maximum of ten (10) entries per month per member. Automatic Entries will be recorded by participating credit unions once the balance is calculated at month¶s-end, quarter-end, and December 31, 2010 processing. Qualifying deposits/balances must be received and posted by the participating Credit Union by midnight Eastern Time on the day of each month-end and the December 31st processing date. Automatic Entries are only eligible to win during the drawing period covered. 2. Qualifying Share Certificate Account: Participating credit unions will establish Qualifying Share Certificate Accounts. Rates and other terms and conditions of a Qualifying Share Certificate Account may vary at each institution. A participating member is limited to one (1) Qualifying Share Certificate Account at one (1) participating credit union, with a minimum opening deposit of $25. Participating members may deposit unlimited funds in a Qualifying Share Certificate Account, with an unlimited number of deposits, provided that prize entries and eligibility are limited as set forth in these rules. 3. Prize Eligibility: Corporations, limited liability companies, partnerships, associations, sole proprietorships, business and labor organizations, other public or private entities, and employees of participating credit unions are not eligible to receive Monthly or Grand Prizes. Officers, directors and vendors of the Credit Union are not eligible to receive Monthly or Grand Prize. Participation in the Raffle and eligibility to win prizes is limited to legal residents of the State of Michigan. All participants must be at least eighteen (18) years of age, a legal resident of the State of Michigan, and a member, with a traditional share account, in good standing in the participating credit union. To win a prize in a drawing, a participant¶s Qualifying Share Certificate Account must be open and active at the time of the drawing. A participating member is limited to winning one Monthly Prize per month. If the Qualifying Share Certificate Account is owned by more than one member, only the primary member is entitled to win a Monthly Prize. All transactions constituting Raffle entries must occur within the State of Michigan. Before receiving any prize, a participant must confirm eligibility by verifying identity, age and Michigan residency, as well as certifying that all transactions constituting Raffle entries occurred within the State of Michigan. If a member with a Qualifying Share Certificate Account is ineligible for the Raffle, such member will continue to be the account holder but deposits to the account will not constitute qualifying Raffle entries. 4. Prizes: MONTHLY PRIZES: All Monthly Prizes are cash prizes and will be deposited in winner¶s traditional share
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account. Prizes may NOT be deposited in the member¶s Qualifying Share Certificate Account. As more specifically provided below, the Save to Win program will award fifteen (15) prizes each month to winning members. Drawings for Monthly Prizes will be conducted within fourteen (14) days of the conclusion of the previous month, for which valid entries will be determined. Winners will be notified via telephone, email, or standard U.S.P.S. mail. Prizes are non-transferrable. ONE (1) WINNING ENTRY WILL BE RANDOMLY SELECTED TO RECEIVE A $1,000 CASH PRIZE TWO (2) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $500 CASH PRIZE FOUR (4) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $250 CASH PRIZE EIGHT (8) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $125 CASH PRIZE

GRAND PRIZE: One Grand Prize Drawing will be held on or before January 31, 2011. One Grand Prize winner will be selected from among all participants in the Raffle. Accordingly, there will only be one Grand Prize winner and there will not be a Grand Prize winner selected from the members of each participating credit union. The winner will be notified via telephone, email, or standard U.S.P.S. mail. The Grand Prize is non-transferrable. ONE (1) WINNING ENTRY WILL BE RANDOMLY SELECTED TO RECEIVE A GRAND PRIZE OF $100,000, TO BE DEPOSITED INTO THE WINNING MEMBER¶S TRADITIONAL SHARE ACCOUNT. Communicating Arts Credit Union (CACU) MEMBERS MONTHLY PRIZES: All Monthly Prizes are cash prizes and will be deposited in winner¶s traditional share account. Prizes may NOT be deposited in the member¶s Qualifying Share Certificate Account. As more specifically provided below, CACU will award ten (10) prizes each month to winning members. Drawings for Monthly Prizes will be conducted within fourteen (14) days of the conclusion of the previous month, for which valid entries will be determined. Winners will be notified via telephone, email, or standard U.S.P.S. mail. Prizes are non-transferrable. TWO (2) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $100 CASH PRIZE FOUR (4) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $50 CASH PRIZE FOUR (4) WINNING ENTRIES WILL BE RANDOMLY SELECTED TO RECEIVE A $25CASH PRIZE 5. Odds: Actual odds of winning are based upon the number of eligible entries received. Each eligible entry shall have a chance of winning Monthly Prizes that is equal to that of other entries within the same participating credit union. Each eligible entry shall have a chance of winning the Grand Prize that is equal to that of all other entries in the Raffle. 6. Decisions: By entering into the Raffle, entrants agree to abide by and be bound by these Official Rules, and to accept the decisions of the participating credit unions as final. Entrants also agree to hold each participating credit union and each third party contributing funds and/or services to the Raffle (collectively and hereinafter referred to as the ³Parties´), and each of their officers, directors, employees, members and representatives, and agents harmless from any liability arising from participation, or the acceptance of a prize. The Parties and each of their officers, directors, employees, members, and representatives, and agents are not responsible for any negligence, claims, liability, injury, property loss, or other damages of entrants and/or winners arising from, or in connection with, acceptance of prizes awarded or participation in this Raffle. The participating credit unions reserve the right to disqualify entrants who fail to follow these Official Rules or who make any misrepresentations relative to the Raffle and prize redemption. 7. Publicity: Each winner agrees to permit the Parties to use his/her name and likeness in promotional and other materials, without additional compensation or permission, except where prohibited by law. Each winner also agrees that his/her name and prize amount will be given to other entrants upon request.
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8. Compliance with Law: All issues and questions concerning the construction, validity interpretation, and enforceability of these Official Rules, or the rights and obligations of entrant and the Parties in connection with the Raffle, shall be governed by, and construed in accordance with, the substantive laws of the State of Michigan, without regard to its choice of law provisions. This raffle is void where and to the extent prohibited by law. 9. Taxes: Winner is solely responsible for all applicable federal, state and local taxes and any expenses associated with the prize, unless otherwise indicated. 10. Miscellaneous: The Parties may agree to substitute prizes of equivalent value, amend the rules or discontinue the Raffle at any time. The Parties disclaim any responsibility to notify participants of any aspect related to the conduct of the Raffle. Written copies of these rules are available during normal business hours at any participating credit union location. A copy of the authoritative and updated rules are available at: www.michigansavingsraffle.org. In the event of any conflict between the rules posted on the www.michigansavingsraffle.org website and any other version of the rules, the version posted on the website will be considered the definitive and controlling version.

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Model 15: Super Savings Centra Credit Union 1430 National Road Columbus, IN 47201 www.centra.org Assets: $888 million Members: 125,400 Contact: Nan Morrow, VP Corporate Development nmorrow@centra.org
Piloted in October 2006, and launched in January 2007, Centra Credit Union¶s Super Savings account is a specially designated, prize-based savings account. There are 12 monthly drawing periods, with 10 monthly prizes. For each $25 in monthly average balance per account, members receive a chance to win prizes that total approximately $1,300 in value each month. The grand prize each month is $1,000 in merchandise such as laptop computers, flat-panel TVs, or deluxe gas grills. The remaining prizes are often gift cards with values from $15 to $100. Product Features & Requirements: y Must be 18 years of age and a member in good standing y Participants are limited to winning one prize per month and only one grand prize ($1,000 in value) per year y Members automatically receive a sweepstakes entry for each $25 monthly average balance in the account, plus an additional entry for each time the member makes a $25 deposit during the month y Members without a Super Savings account can enter the sweepstakes each month by submitting a 3x5 card with name, address, telephone number and the words, ³Centra Credit Union Super Savings Account Prize Entry;´ only one such entry per month is permitted Product Pricing: y Account pays an interest rate of .15% compared to .2% for a regular share account y Although the Super Savings account earns slightly less than do regular shares, the total cost of funds is higher, notes Nan Morrow, VP of Corporate Development at Centra CU because the cost of the monthly prizes increases the program¶s expenses. However, Morrow points out if the funds were in higher-priced accounts, such as certificates, the overall cost could be higher. Overall, she believes the trade-offs are acceptable. y The credit union did eliminate its quarterly and annual drawings in an attempt to curtail some of the program¶s expenses. Even with those cost-cutting adjustments, the program remains popular with participants. Results as of May 2010: y # of Super Savings accounts: y $ balance of Super Savings accounts y Average balance/accountholder: y % of participants between the ages of 26 and 55: y % of participants with incomes below $50,000: y % of participants with incomes between $50,000 and $75,000: Regulatory/Legal Considerations:
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1,799 just under $1 million $555 60% 50% 25%

The primary legal considerations to offering a prize-based savings program in Indiana are as follows: participants must be 18 years of age or older, and members must be allowed to participate even if they are not enrolled in the program. A copy of Centra¶s ³Official Account and Prize Entry Rules´ is provided at the end of this section. Marketing Strategies: The savings product is primarily marketed on Centra CU¶s Website and in newsletters. Prize winners are congratulated on the Website and in the branches. Technological Considerations: Members¶ monthly average share balances are calculated automatically. A program then uses the monthly average share balances to calculate the number of entries per member. The only manual process is the need to enter account numbers for mail-in entries. Account numbers are then randomly selected for monthly prizes. Educational/Training/Staffing Considerations: The Super Savings program is just one of many products for which new employees receive training. The product remains popular with employees because all members are eligible to enter and win. Morrow notes that staff time for the product can require several hours a month to select and purchase prizes, oversee the drawing, and distribute prizes to winners. Measuring Success: y Super Savings balances and numbers of participants have continued to grow over the 3½ years since first implementation y Two different groups use the product, notes Morrow ± o Those who have difficulty saving and are enticed by the offer of prizes o Those who participate simply for the chance of winning a prize

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Centra Super Savings OFFICIAL ACCOUNT AND PRIZE ENTRY RULES 1. NO PURCHASE NECESSARY TO ENTER OR WIN. 2. How To Enter. Centra Credit Union's Super Savings Account began October 18, 2006 and will be ongoing ("Super Savings Account Sweepstakes Period"). To Enter Automatically: An eligible Centra Credit Union member automatically receives Super Savings Account Sweepstakes entries based on the following: * One (1) entry monthly for every $25 in monthly average balance for each member with a Super Savings Account at month-end for monthly prizes. * One additional entry in the monthly drawing will be given for each day that the member makes a Super Savings Account deposit during that month. Automatic entries will be recorded by the Credit Union once the average balance is calculated during month-end processing. Qualifying deposits/balances must be received and posted by the Credit Union by midnight Eastern Standard Time on the day of each month-end. Automatic entries are only eligible to win during the drawing period covered. To Enter Without Making a Deposit into a Super Savings Account: For Eligible Centra Credit Union Members who have not yet enrolled in the Super Savings Account, once a month, you can print your name, address, city, state, zip code and day and evening telephone numbers on a 3 x 5 card, along with the words, "Centra Credit Union Super Savings Account Prize Entry" and mail it to: Centra Credit Union, 1430 National Road, PO Box 789, Columbus, IN 47202, Attn: Marketing. Each handwritten entry will be deemed received by the Credit Union when it is time and date stamped by Credit Union personnel. Only one entry per month per member will be accepted. Multiple entries are void, and if a handwritten entry is declared a monthly winner, but the judges are unable to determine the winner due to illegible writing, that entry will be disqualified. Each handwritten entry will receive one chance to win within each drawing period. All handwritten entries must be received by 5:00 pm Eastern Standard Time on the last business day of each month. All entries (whether automatic or handwritten) become property of the Credit Union and will not be returned. Making a deposit via a Super Savings Account will not improve an individual entry's chances of winning over the postcard entry, other than providing an additional entry in the monthly drawing. 3. Super Savings Account Sweepstakes Drawings. There will be twelve (12) monthly drawing periods per calendar year: January 1 through January 31, February 1 through February 28, March 1 through March 31, April 1 through April 30, May 1 through May 31, June 1 through June 30, July 1 through July 31, August 1 through August 31, September 1 through September 30, October 1 through October 31, November 1 through November 30, and December 1 through December 31. There will be twelve (12) monthly drawings held on the second business day of the month following each monthly drawing period. After each monthly drawing, all entries will be disposed of for purposes of the following monthly drawing, and entry qualifications will be based on the Super Savings Account's current standing. The time of each drawing will be determined at the Credit Union's sole discretion. Non-winning entries received during each drawing period will not be eligible for any subsequent Super Savings Account Sweepstakes Drawings. In each drawing, the winner(s) will be randomly selected from eligible entries.

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4. Prizes. The number of prizes for each Super Savings Account Monthly Sweepstakes Period may vary, depending on the type of prizes given in that month. The top prize each month shall be valued at $1,000. Other prizes will total approximately $300 in value. Winners will be contacted as close to the day of the drawing as possible based on available member contact information and need not to be present to win. Prizes are not transferable. Each winner is solely responsible for reporting and paying applicable state and federal taxes. Each winner must provide the Credit Union with valid identification and a valid taxpayer identification number or Social Security number before any prize will be awarded. All prizes are subject to change throughout the Super Savings Account Sweepstakes Period. 5. Odds. Actual odds of winning depend on the number of eligible entries received. 6. Eligibility. Legal residents of the United States (except where prohibited by law) are eligible to participate and win. All participants must be at least 18 years of age, and a member in good standing in the Credit Union. Participants are limited to winning one prize per primary member (Social Security number) per month. 7. Decisions. By entering into the Sweepstakes, entrants agree to abide by and be bound by these Official Rules, and to accept the decisions of the Credit Union as final. Entrants also agree to hold the Credit Union and each of its officers, directors, employees, members and representatives, and agents harmless from any liability arising from participation, or the acceptance of a prize. The Credit Union and each of its officers, directors, employees, members, and representatives, and agents are not responsible for any negligence, claims, liability, injury, property loss, or other damages of entrants and/or winners arising from, or in connection with, acceptance of prizes awarded or participation in this Sweepstakes. The Credit Union is not responsible for stolen, lost, late, misdirected, damaged, incomplete, illegible, or postage-due mail or entries; or for transactions that are processed late or incorrectly, or are lost or not received due to any reason. The Credit Union reserves the right to disqualify entrants who fail to follow these Official Rules or who make any misrepresentations relative to the Sweepstakes and prize redemption. 8. Publicity. Each winner agrees to permit the Credit Union to use his/her name and likeness in promotional and other Credit Union materials, without additional compensation or permission, except where prohibited by law. Each winner also agrees that their name and prize amount will be given to other entrants upon request. 9. Compliance with Law. All issues and questions concerning the construction, validity interpretation, and enforceability of these Official Rules, or the rights and obligations of entrant and the Credit Union in connection with the Sweepstakes, shall be governed by, and construed in accordance with, the substantive laws of the State of Indiana, without regard to its choice of law provisions. 10. Resolution of Disputes. Except where prohibited by law, as a condition of participating in this Sweepstakes, each participant agrees that (1) any and all disputes and causes of action arising out of or connected with the Sweepstakes, Super Savings Account Sweepstakes Drawing or any prizes awarded, shall be resolved individually, without resort to any form of class action, and exclusively by final and binding arbitration under the rules of the American Arbitration Association and held at the AAA regional office nearest Columbus, Indiana; (2) the laws of the State of Indiana will govern the enforcement and all proceedings at such arbitration; and (3) judgment upon such arbitration award may be entered in any court having jurisdiction. Under no circumstances will any participant be permitted to obtain awards for, and each participant hereby waives all rights to claim, punitive, incidental or consequential damages, or any other damages, including attorneys' fees, other than actual out-of-pocket expenses (i.e., costs associated with entering the Sweepstakes), and waives all rights to have damages multiplied or increased.

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11. Miscellaneous. This Sweepstakes is void where prohibited. The Credit Union may substitute prizes of equivalent value, amend the rules or discontinue the Sweepstakes at any time. The Credit Union disclaims any responsibility to notify participants of any aspect related to the conduct of this Sweepstakes. Written copies of these rules are available during normal business hours at any Credit Union location, by mail upon written request to Centra Credit Union, Attn: Marketing, 1430 National Road, Columbus, IN 47201 with a stamped, self-addressed return envelope, and on the Credit Union's Web site at www.centra.org. 12. Sponsor: Centra Credit Union is the sponsor of this Sweepstakes and is headquartered at 1430 National Road, Columbus, IN 47201.

Updated June 2008

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Model 16: Emergency Fund Account A Prize-based Savings Program to Encourage Savings Members Cooperative Credit Union 101 14th St. Cloquet, MN 55720 www.membersccu.org Assets: $283 million Members: 28,200 Contact: Robin Ongaro, VP Marketing & Business Development Robin.ongaro@membersfcu.org
Introduced in September 2009, Members Cooperative CU¶s Emergency Fund Account is a specially designated, prize-based savings account that is marketed as an emergency savings account. There are 12 monthly drawing periods with a monthly prize of $250, and one annual drawing for a prize of $1,000. Each $5 minimum automatic transfer into the account is a qualified entry into the monthly drawing, with a maximum of four entries per month. The annual drawing is held for all active Emergency Fund Accounts, defined as those that maintained a $5 minimum incoming automatic transfer per month. Product Features & Requirements: y Must be at least 16 years of age (if under 18, the member must have a cosigner on the account) y $5 minimum automatic transfer from member¶s checking or primary savings account y With the exclusion of the first monthly drawing, accounts must be open for at least 30 days prior to the drawing to be eligible y No purchase, application or account is necessary to enter the drawing; members can request that their name and information be included in the drawing Product Pricing: y In addition to the monthly and annual prize, accounts are paid the same dividend rate as for regular savings Results as of May 2010: y # of Emergency Fund Accounts: 318 y Average balance/accountholder: approximately $300 Regulatory/Legal Considerations: The ³age of majority´ in Minnesota is 18; however, the Members Cooperative CU lowered the participation age to 16 with a co-signer in acknowledgement that young people have emergencies as well. Marketing Strategies: y A press release was sent to all local newspapers y In-branch marketing is used via posters and inLighten technology y Winners are featured in the credit union¶s newsletter Technological Considerations: The credit union¶s core processor (Open Solutions) did not require any additional programming for this product.
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Educational/Training/Staffing Considerations: Lunch and learn sessions were held with all staff, and step-by-step guides were developed. Measuring Success: y Positive feedback from members ± especially the winners y Small monthly deposits into the account help members develop a savings habit and the prize money offers a great incentive for opening the account Additional Information: The Emergency Fund Account product was created by an ad hoc employee committee that brainstormed and did the research to launch this entirely new product, states Robin Ongaro, VP Marketing & Business Development. The product demonstrates the credit union¶s mission of being a positive financial influence in the lives of its members. Whereas the Emergency Fund Account is a permanent product, the prize contest will end at year-end 2010, says Ongaro.

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Members Cooperative Credit Union (MCCU) 101 14th Street Cloquet, Minnesota 55720 Emergency Fund Account Official Rules Prizes: $250 (monthly) Method of entry: A minimum of $5 will be automatically transferred into the Emergency Fund Account on a monthly basis. Each $5 minimum automatic transfer into the Emergency Fund Account is a qualified entry into the monthly drawing, with a maximum of four entries per month. Entries must be automatic transfers from the entrant¶s MCCU checking account or MCCU primary savings account into the Emergency Fund Account. Annual drawing will be held for all active Emergency Fund Accounts. An account is considered active if it maintains a $5 minimum incoming automatic transfer per month. The $250 monthly drawings will be held on the first of each month, with the first drawing held on October 1, 2009 and the last drawing on December 31, 2010. With the exclusion of the first monthly drawing, accounts must be open at least 30 days prior to drawing in order to be eligible for entry. No purchase, application or account necessary to enter. Odds of receiving prizes are dependent upon the number of Emergency Fund Accounts opened as well as the number of people who request to participate without opening an account. 16 total prizes will be given away: 4 in 2009 and 12 in 2010. MCCU reserves the right to stop this promotion at any time without notice. You must be a U.S. resident and 16 years of age or older to register. Employees of Members Cooperative Credit Union and its subsidiaries, affiliates and promotion agencies are not eligible to win. The winner will be responsible for all taxes on the prizes. MCCU may report the value of the prizes to the IRS. No prize substitution or transfers allowed. You need not be present to win. Void where prohibited by law. All prize winners must complete a publicity release form to receive the prize.

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Summary Comments
Prize-linked savings definitely adds excitement to the discipline of saving. The results from the Michigan Credit Union League¶s 2009 Save to Win project are encouraging when it comes to attracting low income and non-savers to the product. Over half of the program participants that completed surveys indicated they had not been able to save prior to participating in Save to Win. Members from Communicating Arts CU reported the highest percentage of asset poor participants (67%), yet 15% of all members became Save to Win account holders ± the highest penetration of members among all participating credit unions! But the question raised by the Filene i3 project report is whether the momentum can be maintained once the initial enthusiasm by staff and members ebb? Through the collaboration of participating credit unions, MCUL, D2D, and Filene, Michigan credit unions can boast a huge grand prize of $100,000. That can go a long way toward sustaining excitement. Centra CU was the first credit union to launch a prize-based savings program in 2007. Super Savings is now in its fourth year. It requires a commitment of staff time to oversee the program and keep the prize bin loaded with exciting surprises for participants. Centra CU has curtailed some of its account expenses by eliminating quarterly and annual drawings and prizes. Unlike the Michigan program which requires an increase of at least $25 to the account each month to qualify for prizes, Centra CU uses the member¶s average account balance to determine number of entries, plus an additional entry for each $25 deposit during the month to encourage continued deposits. Sustainability is a function of growing deposits while keeping a lid on prize expenses. Centra CU reported 1,300 Super Savings accounts with balances of approximately $500,000 four months after the program¶s launch. Today, accounts have increased by about 38% and balances have doubled. Nan Morrow, VP of Corporate Development at Centra CU, states that although the Super Savings account is priced slightly lower than regular savings, the total cost of funds is higher when prize money is taken into account. However, she argues that if the funds were in higher-priced certificates, the overall cost could be greater. One example of how cost of funds could actually decline when combined with a sweepstakes product is from a credit union that was offering a monthly cash prize for its regular share savings account. Each dollar on deposit in the core share account was an entry for the monthly $5,000 cash prize. According to the CEO of the credit union, one member transferred $80,000 from another institution to the credit union in hopes of a chance at the $5,000. The CEO tried to talk the member into putting some of the money into higher paying certificates, but the member refused. The credit union is located in a small market where the local media picked up on the credit union¶s novel approach to encourage savings and the credit union¶s sweepstakes-related account became part of the community buzz. Core deposits increased beyond the break-even point. Subsequently however, the credit union has dropped the sweepstakes feature. It wasn¶t due to the cost, says the CEO as the reason for dropping the program. Rather, it was the perception of giving away cash prizes in a down economic environment when the credit union was feeling pinched, as well. The CEO would like to see the program return when the time is right and adds that a small market where word-of-mouth works exceptionally well is an ideal location for a sweepstakes product since the credit union did not have to spend any money on advertising! The goal for Members Cooperative CU is to get members to save for an emergency. It is using monthly and annual cash prizes to move members toward a habit of automatically setting aside money each month. The credit union¶s Emergency Fund Account will continue beyond 2010, but the credit union has only committed to fund prize awards through the end of 2010.

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Savings Challenge Programs
What is meant by a savings challenge program?
Imagine a weight watchers reality contest, but for your wallet. You and your family go head-to-head against other selected families for 10 to 12 months to see who can save the most money and get rid of debt within that time frame. Oh, and you and your family must share your financial situation and progress with followers-at-large who may be inspired to improve their own financial lives with you. You will have a coach to give you financial advice; but in the end, it is up to you and your family to decide what and how many sacrifices you are willing to make to be a winner. What¶s to gain? Maybe as much as $10,000!

How does a savings challenge program help low-wealth households?
Whether a winner or not, individuals and families that are selected to compete, and those that play at home and take advantage of online tools and resources, often make lifestyle changes that allow them to reach savings- and debt-reduction goals. Watching the selected families make difficult decisions to improve their financial lives often inspires others with financial challenges to focus on new goals. The program offers competitors and those who play at home with a host of resources, tools and coaching tips on how to reduce debt, increase savings, and monitor progress.

Why should a credit union offer a savings challenge program?
Credit unions that are implementing the savings challenge are finding the program produces informed, thrift-conscious consumers, one family at a time. But as the circle of families that adopt the savings challenge principles grows, a new buzz begins to swell so that families inspire others to take on the savings challenge. Members and non-members have the ability to follow family contestants as they struggle with lifestyle changes, with their setbacks and gains; and they realize these families are no different from their own. Local media outlets are generally receptive to following the families as well, because it combines human interest stories with challenges that many families face, particularly in a down economy. The result is more consumers who learn of the program, tune in, perhaps are moved to make changes themselves, and learn more about the sponsoring credit union.

Who¶s doing it?
Many credit unions are starting to take the savings challenge. It originally was piloted at GECU in El Paso, TX in 2007. Featured here are the Financial Makeover program offered by CommunityAmerica Credit Union in Lenexa, KS, and a new statewide initiative involving five credit unions in New Mexico starting in June 2010.

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Model 17: Financial Makeover CommunityAmerica Credit Union 9777 Ridge Dr. Lenexa, KS 66219 www.cacu.com Assets: $1.8 billion Members: 187,000 Contact: Mary Rhodes, VP of Product Management MRhodes@CACU.com
Introduced in January 2008, CommunityAmerica Credit Union¶s Financial Makeover program is an outgrowth of the Filene i3 ³Savings Revolution´ innovation. CommunityAmerica CU (CACU) chose the Savings Revolution concept and Financial Makeover name because strategically it wants to position itself as being able to help members or non-members ³make over´ their financial situations. Program Features & Requirements: y Eligibility requirements include: o Must be citizens or legal residents of the U.S. o Must be a credit union member(s) or eligible to join the credit union and willing to open transactional accounts for purposes of monitoring contest results o Must demonstrate a need for a financial makeover and a willingness to significantly improve their current financial situation o Must be willing to develop a savings goal and provide monthly reports on progress and results o Must be willing to work closely with a CACU¶s financial coaching team o Must be willing to reveal and share financial situation with the public o Must be comfortable being interviewed for print and electronic media discussing participation in the CommunityAmerica Financial Makeover y Financial Makeover winners are determined based on the following: o 45% of score based on savings increase o 45% of score based on debt reduction o 10% to allow for significant unanticipated events that may occur to the families over the course of the year and other participation-related activities y A spreadsheet is used to track performances of families by coaches y Participants are selected based on the following through an essay format and personal interviews: o Demonstrated need and willingness to significantly improve financial situation o Capacity to improve their financial situation o Willingness to develop goals and report on results monthly o Willingness to work with a coaching team at least monthly o Willingness to share financial information with the public (personal information such as salaries and expenses are not disclosed publicly) o Willingness to blog weekly about personal situation o Comfortable being interviewed by the media o Background checks for accuracy of information o Varied financial situations y Participants agree to share their stories and relate their learning experiences
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y y y

Top family receives $10,000; three runner-up families receive $2,500 each All families who submit applications are offered financial coaching Families that choose to ³Play Along at Home´ can download worksheets and request a coach by contacting a branch

CACU¶s Program Budget: y Prize money: $10,000 for the winning family; $2,500 for each of the other three families y In-branch collateral and displays: $6,000 ± this generally includes initial materials at the beginning of the year, as well as a mid-year refresh y Dedicated Website and blog including design, programming, support: approximately $25,000 y Media spend: $100,000 - $200,000 (depending on how the credit union chooses to position the program) o Recruitment (newspaper, online, radio): $50,000  Other ways to promote would be via branches, newsletters, internal Website, etc. o Radio spend throughout the year: average 65 TRP/week over 26 weeks: $100,000 (TRP refers to ³Targeted Radio Points´ used to calculate the net effective buy) Processes and Results as of May 2010: y Four external families have been selected to vie for the top prize out of 130 applications y Four internal candidates have been selected from staff to participate this year y Eight runner-up external families have been selected this year to participate in a mini-competition with the top four families receiving smaller quarterly prizes ranging from $500 to $2,500 o The runner-up families are required to blog on their experience at http://www.cacufinancialmakeover.com/blog_community y There are four quarterly meetings each lasting two hours during which families share information and participate in an educational curriculum as follows: o January ± Budget Leaks: Families review a variety of expense categories and where they may have opportunity to gain savings. Breakout sessions follow with coaches to determine how to cut expenses by at least $50 each month and to work on other areas for saving; o April ± Credit Scores and How They Are Influenced: Presentation followed by a coaches review of personal credit reports with families and how to improve them;
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o

o

o

Summer ± Families and Money: Session includes tips for saving money; for example, branded and generic brand grocery items are taste-tested to determine if there is a difference, providing families some help as to when to purchase generic versus more expensive brands. Other fun activities include comparison shopping for a variety of products in a contest format; September ± Keeping to Your Spending Plan During the Holidays: Review holiday strategies for saving money; for example, using brown paper sacks as wrapping paper with hand decorations or handmade Christmas cards or a scrap book as a Christmas present, that can be added to during the year for other holidays. Staff provides a variety of examples of homemade offerings that they have used in the past. Contestants brainstorm ways to save money; November ± Dinner is held at a nice restaurant for all families and coaches; media are invited and the grand prize winner is announced at this event.

Regulatory/Legal Considerations: All forms and processes were reviewed by compliance and legal counsel. Background checks on the contestants were suggested to mitigate publicity risk. Marketing Strategies: y Helping both members and non-members ³make over´ their finances is a major brand messaging platform used by CACU. It is used as the credit union¶s primary differentiator during the recruitment period in the fall, so even if someone decides not to apply for the contest, he/she at least knows CACU has the capability to serve a person¶s financial needs ± going beyond mere checking accounts and loan products; y Mass media advertising is used during the recruiting period in the fall, leveraging radio, newspaper, and online vehicles to cast a wide net among non-members; y The credit union has tried a variety of efforts in branches to recruit members, from kick-off events, large displays and print collateral promoting the upcoming Makeover; y Information and applications are handed out at branches (this seems to provide the best results) and online via PDF downloads from promotional landing page on cacu.com and cacufinancialmakeover.com; y Social media such as Facebook and Twitter ± these methods were used in 2009 to announce the contest. Twitter is used for the Savin¶ Mavens program to send out daily savings tips; see http://www.cacu.com/personal/learn/SavinMavens.aspx; y Partnered with local radio broadcast group to do paid radio time using interviews of family contestants and their progress throughout the year on four stations. Each station follows one family and does approximately one family interview per month, with it being played multiple times on air throughout the day over the course of two weeks; y CACU also has a presence on the Websites of all four stations, providing Q & A for financial questions and links to the Makeover Website to promote readership and a following of family blogs; y Free local newspaper and TV coverage when winners are announced or when mid-year results are reported; y Media are invited to all quarterly sessions. Technological Considerations: y A special Website has been developed where viewers can follow along with the participants, read their blogs, provide encouragement, and play along; y A straightforward, non-biased method of tracking results for participants is critical; families need to know exactly how their results will be measured; y Blogs need to be managed and administered; CommunityAmerica¶s marketing department reviews all blogs and provides basic editing measures.
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Educational/Training/Staffing Considerations: y Each family is assigned two coaches: one is a financial investor; the other is a branch manager y In 2009, the credit union offered a coaching certification program to staff; 44 employees have completed the program y Staff has easily gravitated to the program and they get excited for the families; employees see and hear positive results from members who play along at home and improve their financial wellbeing Measuring Success: y 65 families entered into ongoing coaching relationship as part of the 2009 program y Media attention has helped bring in new members who are asking for the free financial makeover y Monitoring financial improvements by tracking before and after balances of those families that choose to use coaches y CACU¶s marketplace differentiation y Website hits Additional Information: y Coaches are not provided any additional incentives; coaching is in addition to normal work responsibilities. but the position is considered prestigious and desirable y Mary Rhodes, VP of Product Management, provides the following advice to credit unions interested in starting a similar program: o Screen applicants carefully as part of the selection process; complete background checks; make sure applicants are aware of all expectations prior to selection o Help employees be sensitive to the emotions of families going through the program as they struggle with improving their financial habits o Be aware of family dynamics ± these are real people with real lives; dynamics can change during the course of the year-long program o Advise coaches not to become overly involved with their families
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y

y

By assigning two per family, coaches can and often choose to play different roles within the coaching team o Coaches provide recommendations, but in the end, the choice of direction remains with the families o Coaches are selected and matched based on their relative location to participating families and how their individual skill sets match the respective family needs; o Determine financial and employee resources and develop scope of project within those resources Rhodes also cautions credit unions to be sure they are willing to expand their service offerings based on the needs of members who want to make improvements in their lives ± the Financial Makeover program is designed for people struggling with their current financial situation. But CommunityAmerica CU has implemented new products as a result of its outreach efforts, such as: o 2nd chance checking o Credit restore program in partnership with Consumer Credit Counseling Service o Credit rebuilder loans CommunityAmerica CU has made a commitment to Financial Makeover, and there has been a culture shift toward financial discussions and helping members improve their financial lives as a result of implementing the program o

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Model 18: Savings Challenge NM A Statewide Savings Challenge Program Credit Union Association of New Mexico (CUANM) 4200 Wolcott Ave. NE Albuquerque, NM 87109 http://www.cuanm.org Assets: Members: Contact: $342 million 45,900 Kathy Darwin, Program Coordinator KDarwin21@comcast.net

New Mexico¶s Savings Challenge program is an outgrowth of the Filene Research Institute¶s ³Savings Revolution´ concept which was an i3 innovation. Five credit unions in New Mexico signed up for the state¶s first Savings Challenge. The Challenge started in June 2010 and will conclude in April 2011. Each credit union will be selecting three savers to coach and follow, for a total of 15 statewide participants. In addition, participating credit unions will be encouraging members to play at home. The Savings Challenge NM will use Filene Research Institute¶s Debt in Focus program as its budgeting vehicle to help all participants, whether participating in the Challenge or playing at home. The Credit Union Association of New Mexico (CUANM) purchased Debt in Focus licenses for each of the five credit unions. Participating credit unions include: y Chino Federal Credit Union ($28 million in assets) in Silver City, NM y Everyone¶s Federal Credit Union ($19 million in assets) in Tucumcari, NM y Guadalupe Credit Union ($101 million in assets) in Santa Fe, NM y High Plains Federal Credit Union ($42 million in assets) in Clovis, NM y Rio Grande Credit Union ($150 million in assets) in Albuquerque, NM Program Features & Requirements: y Eligibility requirements: o Individual/family must be a citizen(s) or legal resident(s) of the U.S. o Individual/family must be a credit union member(s) in good standing for at least 90 days o Must demonstrate a need for a savings makeover and a willingness to significantly improve current financial situation y Three criteria will be used to evaluate the Savings Challenge NM winners: o Percent increase in savings o Percent decrease in debt o Percent improvement in credit score y An outside CPA firm will be used to tally the totals and determine the winner y All participants must agree to meet monthly with their local financial coaches who will help them set a strategy, adjust plans as necessary, and monitor their progress
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y y y

All applicants submit personal household information, including household composition, household income, debts, assets, and expenditures Applicants agree to background checks and permit the credit union to make personal information public Participants agree to share their stories and relate their learning experiences

Program Budget: Income: y $2,500 contributed by each participating credit union for a total of $12,500 y $40,500 received from an Innovation Grant through the National Credit Union Foundation y $16,000 in leveraged funds through CUANM Expenses: y $2,500 Savings Challenge Website development and maintenance y $10,000 to state grand prize winner y $2,500 to first place winners in other four credit unions y $250 to remaining 10 participants y $12,000 for videos and educational materials y $21,000 for marketing and communications y Credit unions are individually responsible for marketing materials, copying of educational materials, educational facility set-up expenses, staff resources, etc. Processes and Results as of May 2010: y Application deadline was April 30, 2010; each of the five credit unions received from three to eight applications y Each of the credit unions will select its final three participants y Each credit union will decide how to market the program; for example, High Plains FCU purchased a billboard on Main Street in Clovis to make the community aware of its Savings Challenge NM program y Each credit union will provide one coach per saver y All coaches are in the process of receiving training using Debt in Focus y The Savings Challenge NM will begin in June 2010 at which time each family will meet with its individual coach to establish a budget using Debt in Focus y Copies of each families¶ budget will be distributed as follows: o To the respective coach o To the CPA firm responsible for tallying results o To CUANM y Coaches will meet monthly with their families to update financial information y ³At home´ players can submit their budgets to their respective credit unions for review, advice and monitoring, as well y Following the June introductory meeting, there will be eight educational sessions that participants attend at their respective credit unions, concluding in April 2011 (a copy of these sessions can be requested from Kathy Darwin at KDarwin21@comcast.net); ³at home´ players will be invited to these educational sessions, as well y YouTube videos will be used to interview participating families regarding their stories, why they chose to participate, their goals, what they are learning through the process, etc. y Videos will also be collected and posted for all coaches describing their relationship with participating families, their advice and suggestions to families, etc. y Each credit union is responsible for collecting its own YouTube videos, but credit unions are trying to work with local school systems to engage students to participate in the video process y Videos will also be used during the educational sessions Regulatory/Legal Considerations:
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Application and disclosure contents offered through Filene Research Institute¶s ³Savings Revolution Implementation Guide´ were amended to fit the New Mexico model and were then reviewed and approved by CUANM¶s legal counsel. Marketing Strategies: Each credit union is responsible for its own marketing strategy and for purchasing its own materials. Special marketing logos and materials were developed for Savings Challenge NM and include: teller signs, statement stuffers, pens, and press releases. Primary methods of marketing used by credit unions have been Websites and newsletter articles. One credit union purchased a billboard to market its program. Technological Considerations: y A special Website was developed for participating credit unions where viewers can follow along with the participants, view educational videos, and play along y A straightforward, non-biased method of tracking results for participants is critical; New Mexico credit unions have chosen a CPA firm to monitor and track results Educational/Training/Staffing Considerations: y New Mexico¶s program incorporates Debt in Focus as its budget management tool; therefore all coaches are being trained in how to use Debt in Focus y Educational curriculums have been developed for eight training sessions for participants and play at home members y In addition, educational videos and workbooks are being developed to help both play at home and the 15 family savers y Staff and coaches must be committed to the program and its purpose of helping members improve their financial well-being Measuring Success y Membership growth will be tracked for participating credit unions and compared to growth for non-participating credit unions during the challenge period y For the 15 participating families, reporting results include: o Overall debt reduction o Overall savings growth o Improvement in creditworthiness y For play at home families, reporting results include: o Overall debt reduction o Overall savings growth o Improvement in creditworthiness

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Summary Comments
Whereas taking on a savings challenge program might seem overwhelming, the good news is there are a lot of resources and credit union examples to help with such a project. Credit unions can also choose to downsize the project from those models featured here. However, it appears the key components of the program include: y a Website where non-contestants can follow along with their favorite family¶s progress; y online tools and resources to help those who are playing at home; y the availability of coaches to help not only contestants, but those who are playing along at home; and y media coverage of the program to generate awareness. Each credit union or groups of credit unions that take on the project seem to give it an individual flavor at the start or else they let the program evolve over time. CommunityAmerica Credit Union, for example, has expanded its contest in 2010 beyond four external families to include four internal credit union employees and eight runner-up external families that can all vie for smaller prizes. The credit union has also found through its Financial Makeover program that there has been an internal culture shift where a greater emphasis is now placed on helping people ³make over´ their financial lives. As a result, the credit union has introduced new products to help members overcome past financial blemishes that have precluded them from participating in traditional products. The Savings Challenge program that will soon roll out in New Mexico uses Filene¶s Debt in Focus as its budgeting tool to help participants. This is a simple and economical solution for those credit unions with limited online tools and resources to help both competing families and those playing from home. In 2007, GECU in El Paso, TX was the first credit union to try the Savings Challenge. After two successful challenges, it decided to organize a ³College Edition´ in 2009. Six college students competed for the grand prize of $10,000. The emphasis was on paying down college debt and other expenses. The grand prize winner not only eliminated most of her debt but with help from her coaches was able to find several scholarships to help pay all of her tuition. For 2010, GECU is returning to six local El Pasoans for its ³Back in the Black´ Savings Challenge. This year¶s goal is to provide not only the six challengers, but all GECU members with the skills to get out of the red and into the black. Wright-Patt Credit Union¶s Savings Race is an eight-month program and is in its 2nd edition. It added a new twist the second time around by inviting members to help determine the winner by registering to be a member of the Savings Race Fan Club, and by voting once a day for the family they believe deserves to win the $10,000 grand prize. The voting is intended to help give contestants an added boost through the long period and is only one of the measures used to determine the winner. Meeting or exceeding savings and debt reduction goals remain the primary measures. Wright-Patt CU also added Mini Races this go around. The mini race is a form of ³play at home,´ where members register and complete various budgeting and money-saving tasks over the course of the Savings Race and can vie for monthly prize drawings up to $1,000. Players can earn points for completing certain tasks, enabling them to enter into monthly drawings. Perhaps the biggest rewards from these Savings Challenge programs are the anecdotal stories of real people who made lifestyle changes because of what they learned through the process ± whether competing or by playing at home. It¶s the story of one family who competed in CommunityAmerica CU¶s Financial Makeover program and was able to reduce debt and improve its credit report to the extent that when the family needed a new car, it qualified for a single-digit car loan rate. It¶s the story of a runner-up contestant who thanked the credit union because she was able to build up her savings and planned to use her $2,500 prize money to return to school to get her degree ± her lifelong goal. It¶s the story of a grand prize winning family whose 13-year-old son got up to make the acceptance speech for the family and offered a very motivating and moving speech about what he had learned through the year-long
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process. It¶s the emotional, human interest stories of success that keep these credit unions committed to Savings Challenge programs year after year.

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Individual Development Accounts ) (IDAS)
What is meant by IDA savings products?
Imagine yourself a lower-income worker struggling to save enough money to buy a house or get a college degree so that you can move into a better-paying job. It may seem to you like these goals are completely out of reach. Then you hear of a program that will match your savings dollar-for-dollar to help you reach your goal if you complete some financial literacy classes. Sound too good to be true? It¶s not. That¶s exactly why IDAs were developed. An IDA is a matched-savings account designed to help people of modest means acquire an economic asset on the road toward long-term financial stability. Typical asset goals include home ownership, higher education, or small-business capitalization. Financial education is a core component of most IDA programs to help individuals improve financial literacy skills and to provide support for a successful asset purchase.

How do IDA savings products help low-wealth households?
Typical matches are often dollar-for-dollar (or 1:1) or greater up to a certain dollar threshold. For example, let¶s say the dollar match is 1:1 up to $4,000 for a family. When that family has been able to save $4,000 on its own and has completed the required financial education components, it receives a $4,000 match, for a total of $8,000 to use as a down payment for a home or for another approved asset. Participants must meet income-based criteria and be willing to follow through with the asset-specific training, based on their chosen goal. They must also have the capacity to save a certain amount of money each month to reach their goal.

Why should a credit union offer an IDA savings product?
IDAs are great programs to help families and individuals of modest means establish a pattern of regular saving and ultimately purchase a productive asset. But they can be resource-intensive unless the credit union is able to partner with a community organization to help with the financial education component and is able to receive grant funding through a foundation to help with the match. Some state credit union foundations are helping credit unions provide IDAs by setting up partnerships, providing matched funds, and/or offering training.

Who¶s doing it?
Two credit union IDA programs are featured here. METRO Credit Union¶s FUEL accounts are IDAs designed to help low income families with high school children save for college. And Employees Credit Union is one of 20 credit unions participating in the Iowa Credit Union Foundation¶s ³Credit Union Family Partnership Project.´

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Model 19: FUEL Accounts METRO Credit Union 200 Revere Beach Parkway Chelsea, MA 02150-9100 www.metrocu.org Assets: $788 million Members: 119,600 Contact: Charlene Bauer, SVP Strategic Initiatives CBauer@metrocu.org
Introduced in January 2010, FUEL (Families United in Educational Leadership) is an IDA savings program for lower income Chelsea families to help them save for their children¶s college expenses. Families attend Savings Circle meetings, students attend afterschool programs, and accountholders receive a one-to-one savings match up to $1,500. Product Features & Requirements: y Must be a middle or high school student in the Chelsea school system y Families agree to save a predetermined amount each month based on a goal of $1,500 by the student¶s senior year y Families agree to attend at least six Savings Circle meetings per year to learn more about financial management, the college application process and to receive/provide peer support y Students agree to participate in an afterschool program for homework support and a positive environment Product Pricing: y Families receive a 1:1 match, creating a $3,000 college fund for each student y Funds are applied to qualified higher education expenses Results as of May 2010: y Program began in January 2010 with 100 students and their families enrolled in the program y Only two families have dropped out because they moved out of the area Regulatory/Legal Considerations: Funds are in the name of the Chelsea Education Foundation FBO the student; funds do not have to be reported by the student when applying for financial aid, scholarships and grants. Marketing Strategies: y The target market for this program is low income families in the Chelsea area that would not normally consider a college education within reach due to their financial situation y FUEL reached out to community organizations asking for assistance in identifying qualified families and then provided informational seminars y FUEL met with interested families on a one-to-one basis to explain the program and its requirements Technological Considerations: y Ability to automate the monthly matches and reports
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Educational/Training/Staffing Considerations: y Chelsea Education Foundation has committed one part-time employee to the program; she is responsible for monitoring the activity of the families and coordinating the various Saving Circle meetings y FUEL staff aggressively pursues funders for grants; in addition, FUEL staff interviewed the initial families Measuring Success: y Students and families openly discuss college ± a dialogue that previously did not take place y The Savings Circle meetings keep families engaged in the process y The high school drop-out rate in Chelsea is high; the afterschool program provides students with a safe after-school environment that additionally provides the academic assistance needed to keep them engaged in school, help them achieve good grades, and ultimately qualify them to attend college y A waiting list of students wanting to enroll in the program y The goal is to have 400 participants once matching funds have been committed y Two universities have agreed to fund on an annual basis, 25 full scholarships and an unlimited number of partial scholarships as part of the program Additional Information: FUEL (Families United in Educational Leadership) is the result of a local philanthropist, Robert Hildreth, sharing his vision with the Chelsea School Department and Metro Credit Union. Through FUEL, collaboration among Metro CU and other community organizations was established. All accounts are funded through Metro CU. Matching funds are donated by Metro CU, other businesses, and youth programs in the city of Chelsea. Chelsea is a low- to moderate-income area, states Charlene Bauer, SVP Strategic Initiatives. Over 80% of students participate in the food supplement program.

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Model 20: CUFP IDA Program Employees Credit Union 2714 Central Ave. Estherville, IA 51334 www.employeescu.com Assets: $72 million Members: 6,500 Contact: Cathy Beaver, Operations Manager CBeaverecu@yourstarnet.net
Employees Credit Union is one 20 credit unions participating in the Iowa Credit Union Foundation¶s ³Credit Union Family Partnership (CUFP),´ an IDA program that was launched in 2008. Qualifying income criteria apply. Six hours or more of financial education is required. Matched savings funds can be as high as 2 ½ to 1. Product Features & Requirements: y Income cannot exceed 200% of the federal poverty threshold at the time of application ($21,660 for an individual in 2009) or it must fall within the federal earned income tax credit limits or the person must qualify for Temporary Assistance to Needy Families (TANF) y Household net worth cannot exceed $10,000, not including a primary residence and one vehicle y Must be willing to complete six or more hours of financial education y Must be able to save at least $25 per month; maximum savings per month for the match is $400 (cap is to prevent one-time large deposits such as a tax refund) y Savings must be used for down payment or closing costs on a house, for post-secondary education or job training, to start a micro-enterprise, or for purchase or down payment on a car Product Pricing: y Dollar for dollar match or 1:1 from the Iowa Credit Union Foundation y An additional 1:1 match has been provided by the Iowa Department of Human Rights y An additional .50:1 match is provided by Employees Credit Union y Maximum savings amount is $2,000 per individual ($7,000 total with matches), or $4,000 per family ($14,000 total with matches) Results as of May 2010: y five active participants y one has completed the program and purchased a home y four new enrollees are ready to start Regulatory/Legal Considerations: No special considerations. Marketing Strategies: y Target markets are low-income individuals and families that are able/willing to save and participate in financial education to acquire an economic asset to help them achieve long-term financial stability y Strategies include: o Word-of-mouth from participants
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o o o o o

Community action agencies provide referrals Credit union employees market the program to individuals/families that appear to be good candidates Website and newsletter promotions Letters from employers or member groups Information from the credit union included in report cards to area high schools

Technological Considerations: No special considerations. Educational/Training/Staffing Considerations: The Iowa Credit Union Foundation provides much of the support behind the program, including train-thetrainer and additional training sessions for participating Iowa credit unions. There are quarterly conference calls among participating credit unions to share experiences and discuss ongoing matters. Measuring Success: y Initially, 9 Iowa credit unions participated in the IDA program; now there are 20 credit unions offering the program in 91 of the 99 Iowa counties y Employees CU was one of the original participants and can boast of having the first successful IDA-saver graduate ± a 28-year-old single woman who saved $2,000 and with her $5,000 match was able to purchase a home in July 2009 y Participants report positive experiences from the financial education sessions in learning how to budget, the importance of an emergency fund, discovering ³spending leaks,´ and making affordable purchases Additional Information: In 2006 the Iowa Credit Union Foundation along with the League¶s subsidiary partner, Coopera Consulting, decided to make financial stability and the elimination of poverty part of its strategic plan. IDAs were selected as the means toward financial independence. The Foundation received private funds to put the program in place. Cathy Beaver, Operations Manager at Employees CU, states her credit union became involved because she knew in her small rural community of Estherville, there would be many people who would meet the income guidelines and could benefit from the program.

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Summary Comments
The two examples featured here demonstrate how critical partnerships are to successful IDA programs. METRO Credit Union¶s program is strongly supported through the sponsoring FUEL organization, the Chelsea Education Foundation, and other community businesses and organizations. Employees Credit Union and 19 other participating credit unions in Iowa rely on the Iowa Credit Union Foundation for training support and for grants to fund the matches. Montana Credit Unions for Community Development (MCUCD) participates in six statewide IDA programs that have various asset goals. MCUCD¶s role is to design and implement the IDA and financial education component of the program, provide training to credit union and support staff on program policies and procedures, produce monthly IDA statements for participants, manage the IDA software, and track progress of monthly savings deposits. There are 28 participating credit unions in the state of Montana. To date, 154 IDAs have been opened and participants saved $79,000 or an average of $520 per IDA. Matched dollars to date are $233,000, or a little over $1,500 per IDA. This represents a 3:1match. Santa Cruz Community Credit Union (SCCCU) established its own 501(c)(3) nonprofit affiliate ± Santa Cruz Community Ventures ± to secure outside funding for its core community development programs. One of those is an IDA program. To date, 86 participants have completed the IDA program for a total investment of $997,580. With local foundation funding, SCCCU expanded its IDA program to partner with the Independent Living Program to assist at-risk, foster youth prepare for aging out of the foster care system when they reach 18. Participants hold jobs, attend four financial education workshops and save $500 over two years. Savings are matched 2:1 for a total savings of $1,500 that can be used for a car, rent, or essentials for college. To date, the program has netted five graduates and seven more are ready to start the next session. Participants also receive a financial incentive of $50 to start their savings accounts. Perhaps an interesting evolution for an IDA program is to pattern it around the Savings Challenge program (see Savings Challenge Programs), with income-qualifying criteria. Coaches could be used to provide individual financial counseling. Participants could blog about their struggles or successes to save money and those at home could serve as a cheering section, encouraging them to reach their savings goals. Upon reaching those goals, participants could be awarded matched funds in lieu of prizes either from the sponsoring credit union or through foundation grants. The concluding step for successful participants would be to acquire their asset goal: their first home, a college education, starting their own business, etc. Such a model might help elevate IDA programs to the level of excitement and human interest appeal generated by savings challenge program.

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Other Savings Products
What is meant by other savings products?
This section includes other innovative ideas to help individuals save. Generally, these products do not represent significant deposits for credit unions, but are instead offered as a strategy for building relationships with members and their families. They include such products as ³right-time savings´ products, youth savings, club accounts, safe accounts, and savings bonds.

How do other savings products help low-wealth households?
The products featured here are designed to help individuals and families save for specific purposes or at specific times of their lives. In a sense, they are niche savings products. But they are centered on the concept of saving for future needs or planned events.

Why should a credit union offer other savings products?
Most of the products featured here are relationship-building products. Youth savings accounts, for example, introduce youth and teens to credit unions as financial institutions. Depending on how credit unions manage these accounts, they have the opportunity to secure these young people as life-long, loyal members. Right-time savings, such as the MatriMoney® account can help credit unions build trusting partnerships with young adults as they begin a new chapter in their lives. Club accounts help people save for recurring events, such as Christmas and vacations. Safe accounts are designed to help those members who choose not to receive dividends on their savings. U.S. Savings Bonds are often a good savings tool for low- to moderate-income households because they pay a good rate of return and aren¶t in the form of cash, making access to the funds less tempting.

Who¶s doing it?
Many credit unions are offering these types of products. North Island Financial Credit Union¶s MatriMoney® account is a unique program piloted by the credit union in 2006. It is featured here as an example of a right-time savings product. The other product categories are treated as discussions as to why credit unions might want to offer them as well as other helpful ideas and resources.

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Model 21: MatriMoney® North Island Credit Union 5898 Copley Dr. San Diego, CA 92111 www.myisland.com Assets: $1.4 billion Members: 92,700 Contact: Beth Small, Marketing Administrator BSmall@myisland.com
Introduced in April 2006, MatriMoney® is an example of a ³right-time´ savings program. MatriMoney® is a wedding registry that allows couples to receive cash gifts to purchase what they really need and want, without having to ask for cash. It is a great way to build relationships with young adults at a point when many life changes will likely soon occur (e.g., parenthood and home ownership). With a right-time savings program, credit unions can position themselves to be a trusted partner for future life events that require financial decision-making. Product Features & Requirements: y Both parties must open the account at least 90 days prior to the wedding y Minimum opening balance is $200 y No fees y No withdrawals permitted until wedding date or later y MatriMoney® announcement cards are provided to shower and wedding guests explaining the program y Guests that make deposits receive a card to send/present to the couple Product Pricing: y As of May 2010 the rate was .30% APY on amounts over $200 Results as of May 2010: y Currently, about 50 accounts are on the books y The credit union opens one or two accounts per week y Average account balance is about $400, after which couples normally close the account or move the funds to other accounts after the wedding Regulatory/Legal Considerations: North Island CU holds the national copyright to the name MatriMoney® but allows other credit unions to use the name at no charge. Credit unions are required to file a letter with North Island CU prior to using the name. Marketing Strategies: North Island CU focuses its marketing efforts for this product on existing members. It has found that the majority of members with MatriMoney® accounts are existing members, according to Beth Small, Marketing Administrator. The credit union utilizes this product as part of its retention/relationship strategy. Technological Considerations: No special considerations.
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Educational/Training/Staffing Considerations: MatriMoney® accounts are included with all product training for new employees. The product is well received by staff and the credit union has received good press from the product. Measuring Success: y Members who use MatriMoney® have more credit union services per household than does the general membership y 63% of those with a MatriMoney® account also have a credit union checking account and use online banking (which is how they check their gift-givers¶ names) y Average age of accountholders is 31 y Accountholders have been credit union members for an average of 6 years Additional Information: North Island CU piloted the MatriMoney® account in the fall of 2005 as one of Filene Research Institute¶s i3 projects. There is no ³one way´ to offer a MatriMoney® account, according to Small. At North Island CU, the account is a marketing variation of a regular share savings account, and no new product was developed. Other ³Right-Time´ Savings Ideas: Mountain America Credit Union in West Jordan, UT offers both a MatriMoney® wedding registry and a Graduation Registry. Another type of registry could be a New Baby Registry. While none of these accounts will attract sizeable deposits or be open for long, they do offer credit unions an opportunity to build lasting relationships with young members as they add new chapters to their lives.

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Youth Savings Programs
The younger a child learns the value of saving, the more entrenched a savings routine will be by adulthood. That¶s why many credit unions offer youth savings programs. But some are more effective than others, depending on the level of energy and resources the credit union puts into the program. According to CUNA¶s ³Model Youth Program Guide,´ young people pass through four phases to reach financial independence: learning to spend, to save, to manage money, and to borrow. The person¶s maturity level, not age, determines the rate at which the individual will move through the phases. The guide suggests that each phase creates a need for different financial services. Programs that encourage and promote financial education to youth, along with incentives for saving money are good combinations. CUNA¶s ³Thrive by Five: Teaching Your Preschooler About Spending and Saving´ provides a link to helpful advice for parents about teaching children the practice of waiting to make purchases rather than buying right now. The information is available in both English and Spanish.

Kirby Kangaroo Club and CU Succeed® are national youth and teen clubs, respectively, offered through the Credit Union Association of New Mexico. High Plains Federal Credit Union combines these youth programs with other interactive financial learning links. One such link is to Minyanland where young people can play games while learning about earning, saving, spending and giving. Parents can assign chores and children can earn money through a ³virtual allowance.´

Young members at Mazuma Credit Union in Kansas City can earn Mazuma bucks for each $5 they deposit, which in turn can be used to purchase prizes. Savings incentives such as these not only reward thrift, but bring the child into the credit union where he/she becomes familiar and comfortable with the environment. Mazuma also makes good grades pay. Youth and teens are entered into a drawing for prizes when they produce a copy of their report cards. Every ³A´ is worth three entries, every ³B´ is worth two, and every ³C´ is worth one. Northern Mass Telephone Workers Community Credit Union in MA has resurrected the stamp book concept for its youngest members. The credit union¶s Kids Smart Saver Rewards program, for members aged 5 to 13, offers a Smart Saver booklet. For every $10 deposit, young members are able to add a stamp to the booklet. Every 10 stamps can then be redeemed for a $5 gift card good at Barnes & Noble, AMC Theatres, or Toys R¶Us. NMTW Community CU also offers a Student Super Saver Account. If students deposit $50 per month for six months, the credit union rewards them with a $50 bonus deposit in the seventh month. Most consumers have trouble delaying gratification, and that is even more troublesome for young children who have difficulty understanding the concept of the future. An effective learning method is to help them exercise control over their decisions, rather than choosing an immediate gratification. For example, give a child a small savings bank or a quarter savings card and tell the youngster a full bank or
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card earns the child a trip to the credit union. Assuming such a trip is a pleasant reward, the child has an incentive to save money and the parent has a teachable opportunity to help the child learn ways in which to earn and save. If the credit union offers incentives for youth savings, such as Mazuma bucks, the child can decide whether an immediate prize is necessary or whether to save the bucks for a bigger prize at a later date. The earlier in life financial skills are developed, the more likely they are to be retained. Credit unions take pride in their partnership role when it comes to helping their members achieve financial success. Extending that role to the credit union¶s youngest members can lead to a solid, loyal pipeline of future service users.

Club and Special Share Accounts
Club accounts, such as Christmas Club Savings, have been around for a long time. Some credit unions phased out club accounts and opted for special share savings accounts that let members designate the purpose for the account. Either way, the objective is to let members save in advance for an anticipated expense. Some club accounts are set up with restricted withdrawal activity to help members save for their intended purpose. For example, Xceed Financial Credit Union in CA offers club accounts for any special purpose or occasion. Only one free withdrawal per quarter is allowed. Club accounts from Wright-Patt Credit Union in OH are set up for a particular term as determined by the member. Members can choose terms between 3 and 12 months and can choose a name for the account. Upon maturity, funds are transferred to the members¶ share or checking account for use. Redwood Credit Union in CA offers members ³Build Your Own´ savings accounts. Members can customize the accounts with special names and can specify a dollar amount goal and deadline. This account could double as a goal-savers account in that if a member selects a goal of at least $2,500 and reaches the goal within the time frame specified, the credit union will double the member¶s dividends.

Safe Accounts
Some members choose not to receive payment of dividends to their accounts. This may be for religious purposes, or the person may be a foreigner or an immigrant without, or who is unable to qualify for, a Social Security number. Since dividends over $10 must be reported to the IRS, a tax identification number is required. Safe accounts are non-interest-bearing accounts. They are referred to as ³safe´ accounts because they provide members with a safe place to keep money, in lieu of a back pocket or under the mattress. By offering a Safe share account, credit unions can invite unbanked immigrants without Social Security numbers into their memberships. They can provide these immigrants a safe place to keep money and to cash payroll checks at an affordable cost. Offering this account is an important first step toward building a relationship with these households. Western Credit Union in OH offers members a Safe account. Acceptable IDs for opening the account are a state-issued identification, passport, voter registration card, or matricula consular card. Proof of U.S. address is required and a utility bill or paystub is acceptable. No dividends are paid to the account. Members who
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don¶t qualify for Social Security numbers are encouraged to apply for Individual Tax Identification Numbers or ITINs. When members receive their ITINs, the accounts can be converted to interest-bearing accounts. Safe accounts are legal and are approved by NCUA and other regulators. Credit unions offering nondividend-bearing accounts should follow Truth-in-Savings Act disclosures and document that the member voluntarily chose this option.

U.S. Savings Bonds
Roughly one-quarter of credit unions (23%) issue U.S. Savings Bonds. Series EE Bonds are sold at onehalf the face value, i.e., a $100 bond costs $50. Series EE Bonds earn interest at a rate of 90% of the average yields on 5-year Treasury securities for the preceding six months. They reach final maturity in 30 years. In contrast, Series I Bonds are sold at face value, i.e., a $100 bond costs $100. The bond¶s earnings are based on two components: a fixed rate of return and a semiannual inflation rate that changes each May and November. The bond continues to earn interest for a period of 30 years. Both series of bonds are available in denominations of $50, $75, $100, $200, $500, $1,000 and $5,000. Series EE bonds are also available up to $10,000. Because of their low denominations, bonds are a good savings tool for low-wealth households. Another feature that is often attractive to those who have difficulty saving is the fact that they cannot be redeemed until at least one year from issuance. Furthermore, bonds aren¶t in the form of cash, making access to the funds more difficult and less tempting. Bonds can be purchased in the name of family members, making them particularly appealing to parents and grandparents who want to set aside money for their children and grandchildren for various purposes. Bonds are safe savings tools. They are backed by the U.S. Government and are replaceable, if lost. They are also exempt from state and local income taxes. The Doorways to Dreams (D2D) Fund has been promoting U.S. Savings Bonds ± in particular, the I Series ± as a savings vehicle for tax refunds in conjunction with Volunteer Income Tax Assistance (VITA) sites. As part of D2D¶s efforts, tax forms for the 2009 year included a bond-purchase option. D2D has found that between 6% and 10% of low- to moderate-income tax filers choose a savings bond for at least part of their refund. According to its research, the profile of a bond purchaser at a VITA site is a single, working parent. More than half of purchasers have no savings or investments. Furthermore, 67% of purchasers surveyed said they would have spent the money if they hadn¶t bought the bonds. Purchasers also indicated they were buying them for the long haul ± for 10 to 20 years. Based on D2D¶s research, credit unions that participate in VITA sites should consider a savings bond promotion during the tax season and in particular, at the VITA sites. Volunteers can help filers see value in putting some of their refund in an accessible savings account for easy use, but for long-term savings, a bond may be a better product for some filers than a certificate or other savings product.

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Summary Comments
At a minimum, credit unions should make certain they have an active, engaging youth savings program that makes it fun for youngsters to come visit the credit union. Make young people feel comfortable and welcome, and make saving and learning about money an enjoyable exercise for them and their parents. Similarly, a teen savings program keeps the young member connected to the credit union. Along with keeping a focus on savings, however, teens need complementary products such as debit and ATM cards, and even low-limit credit cards. Club- and special share accounts enable members to save for anticipated purposes. It¶s like the old concept of envelope savings. People often need to compartmentalize their savings for special purposes. Make it easy for them to do so at their credit union. Right-time savings products such as special events registry accounts provide credit unions with opportunities to assist individuals when they are preparing for an exciting new chapter in their lives. Credit unions can be part of that preparation and build a trusting connection with the individual or family. Credit unions that wish to reach out to immigrants should consider offering Safe accounts. The account set-up is pain-free and the cost of funds is zero. Finally, credit unions that are issuers of savings bonds shouldn¶t overlook the value of promoting those bonds as savings vehicles, especially during tax time. Bonds appear to be a viable tool to help low- to moderate-income households save for the long term.

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Concluding Remarks
A few concluding points can help emphasize some of the strategies and components that combined, make for a more effective savings program for low-wealth savers.

1.

It¶s all about building relationships.
y Promote other product usage with the savings program. For example, encourage or require the member also use the credit union¶s checking account and/or direct deposit for a better rate on savings. Remember some of the very members you want to help with your savings product, may not qualify for your traditional checking account. Consider offering a 2nd chance or fresh-start checking product (visit the REAL Solutions Impact Center for examples of fresh-start checking accounts at: http://www.realsolutions.coop/solutions/transaction-products/fresh-start-secondchance or prepaid reloadable general spending cards at: http://www.realsolutions.coop/solutions/transaction-products/prepaid-cards). Require a small monthly or bi-weekly deposit through an automated process. Make saving fun using programs such as prize-linked savings. Members will focus their attention on their credit union each month when winners are announced. Right-time savings products such as MatriMoney® help build long-term relationships. Provide cheerleaders, such as through the Savings Challenge program. These can include credit union staff, coaches, or those following along at home.

y

y y y y

2.

Try to make it out of sight, out of mind.
y y y y Make the saving process a forgettable moment. For example, the round-up debit or checking sweep of change is inconsequential to most people and can be easily managed. Include the savings function with a loan function, such as the attached savings examples. Members often forget they are building savings while paying down their debt. Automate a small monthly or bi-weekly deposit into a savings account so it doesn¶t require any work or memory on the member¶s part. Savings bonds get placed into a safe deposit box and are forgotten.

3.

Use the power of coaching.
y Members don¶t want to receive financial education, but they are often willing to listen to financial advice, particularly if they are in a contest to see who can save the most or get rid of debt. When cross-selling a savings product or feature, use the opportunity to show members how much money they can save over time through financial calculators. Help them set goals. If offering a wedding or graduation registry savings program, use the opportunity to prepare young adults for the future with other credit union products.

y y

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4.

Make employees sales ambassadors.
y Encourage employees to use the products offered by the credit union so they are knowledgeable about them, particularly if the products are more complicated such as roundup savings programs. Emphasize or target market particular savings products throughout the year so employees don¶t forget about them. For example, savings products that are attached to loans or round-up debit savings features may be forgotten by employees who may only concentrate on the core product, i.e., the loan or debit card. Help employees learn how to overcome opposition from members because they ³just don¶t have any extra money now.´ Some suggestions include: o Rounding up a loan payment to the next $1 or $5, with the difference going into a savings product; o Transferring the change or odd-dollar amount from direct deposit or payroll deduction into a savings account o When cashing a payroll check, suggest that the change or a dollar go into a savings account Include your employees in a discussion team to generate ideas about how your credit union can help make saving an actionable behavior.

y

y

y

Remember, the goal is to help low-wealth households build wealth. It¶s a dollar by dollar process!

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Resources
Alternatives Federal Credit Union. IDA program description at http://www.alternatives.org/ida.html. July 2010. Credit Union Association of New Mexico. Kirby Kangaroo Club and CU Succeed Youth Programs at http://www.cuanm.org/index.php?option=com_content&view=article&id=82&Itemid=191. July 2010. Credit Union National Association (CUNA), Inc. Model Youth Program Guide at http://buy.cuna.org/detail.php?sku=28479P. July 2010. Credit Union National Association (CUNA), Inc. Thrive by Five: Teaching Your Preschooler About Spending and Saving at http://www.creditunion.coop/pre_k/. July 2010. D2D Staff. ³Yes We Can: Inclusive Saving at Tax Time.´ at http://www.d2dfund.org/http%3A/%252Fd2dfund.org/yeswecan. D2D Fund. July 2009. Dugan, Stacy. ³Linking Saving Money to Winning Prizes with Save to Win: The Michigan Story.´ at http://realsolutions.coop/assets/2010/4/7/Save_to_Win_Michigan_League_Story_March2010.pdf. REAL Solutions®. March 2010. Filene i3 ³Incubators.´ ³Debit Card Savings Program (No Excuses Savings Club) Business Plan´ at http://filene.org/home/innovation/i3ideas/buildwealth/14. Filene Research Institute. April 2006. Filene i3. ³Peace of Mind Auto Loan Concept Document´ at http://filene.org/home/innovation/i3ideas/borrow/39. Filene Research Institute. April 2009. Filene i3. ³Save to Win: 2009 Final Project Results/2010 Implications for Credit Unions´ at http://filene.org/publications/detail/savetowin. Filene Research Institute. April 2010. Filene i3. ³Savings Revolution Credit Union Implementation Guide´ at http://filene.org/attachments/976. Filene Research Institute. Hachikian, Christina. ³Turning Today¶s Economic Inflection Point into Tomorrow¶s Savings Behavior.´ at http://cfsinnovation.com/publications/article/330660. Center for Financial Services Innovation. September 2009. Kane, Tom. ³American Workers: Getting Ahead or Just Getting By?´ at http://www.alliantbenefitsolutions.com/downloads/AmericanWorkers_WhitePaper_HR168R1108.pdf. Alliant Credit Union and the International Society of Certified Employee Benefit Specialists. August 2008. McClain, Carin. ³Individual Development Accounts: What¶s Involved in Getting Started´ at http://realsolutions.coop/assets/2010/7/19/BinderTXpresentationIDA.pdf. Montana Credit Unions for Community Development (MCUCD). July 2008. ³Taped Crusaders´ working group. DriveUp Savings Product at www.driveupsavings.org. ignite Indiana. October 2008. World Council of Credit Unions (WOCCU). MatchSavings.org at http://www.MatchSavings.org. July 2010.
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