Income Advance Program

Beyond Payday Lenders and Pawn Shops: Thinking Differently about Small Dollar Loans

For many Americans, a few hundred dollars can mean the difference between financial stability and distress. Financial distress is not an isolated problem; rather, it has ripple effects that extend not just to a person’s family, but also his or her employer. Ted and Ned Castle of Rhino Foods understand that financially stable employees are healthier, happier, and more reliable.

Can credit unions partner with for-profit businesses to help their employees be more financially secure, and in so doing, increase profitability for both the business and the credit union? Ted and Ned would answer this question with a resounding yes. They joined our podcast to share how they have leveraged small dollar loans to benefit their employees, their credit union partner, and their own bottom line.

Key Insights and Takeaways

  1. Over 60% of Americans don’t have $500 in savings, and finances are the biggest stress for most employees. This situation is an epidemic, and can have massive consequences for a business’ bottom line. Credit unions, in concert with employers, can act as a helping hand for those in need.
  2. A small dollar loan facilitated by a credit union and an employer can be a critical component in helping an employee escape the poverty trap.
  3. It’s important that we think about what the default option is, because people usually stick with the default. By making continual saving through paycheck deductions the default option, many Rhino Foods employees were able to build up their first nest egg ever. Shifting this frame of reference can be all it takes to help employees adopt healthier financial behaviors.

Read the full transcript:

Cameron: Hello, and welcome to another episode of the Remarkable Credit Union Podcast. We created our podcast to help Credit Union leaders and marketers think outside of the box about technology, marketing and community impact. Each episode, we bring on expert guests from inside and outside of the industry for conversations about innovation. Our goal is to challenge your preconceptions about business as usual and provide you with actionable takeaways that you can use to grow your membership, increase share of wallet and magnify the positive impact in your community.

Cameron: Today’s big question. Can Credit Unions partner with for-profit businesses to help their employees be more financially secure, increase profitability for the business itself and grow their Credit Union membership and income? Today, I am very excited to welcome two special guests.

Cameron: First up, I have Ned Castle, who is with the Rhino Foods Foundation, where he’s been working for the last year and a half. Ned has a background in media production, non-profit capacity building, and a variety of other skills. Which is perfect, because he’s a bit of a Jack of all trades in this early stage with the startup we’re going to be telling you about around the Income Advance Program today. One exciting personal fact about Ned is he is a late in life surfing enthusiast, so you can just picture Keanu Reeves in Point Break, and you know exactly what he looks like.

Cameron: Next, I’d like to welcome Ted Castle. Ted is the owner and founder of Rhino Foods, which he founded back in 1981. Back in 1981, they started out with an ice cream store when Ted was coaching hockey at UVM. They’ve grown in a whole bunch of different directions since then, including starting making products with other companies. They now have 60% market share of all the cookie dough and ice cream that’s made today, and over 220 employees. Rhino Foods is a proud B Corp since 2013, and just this last year, Ted and Rhino Foods won the Hal Taussig Award as the most outstanding B Corp in the country.

Cameron: When I asked Ted what his personal highlight was, he said, “Having Ned as his son.” Aw, so we can see that they’re a close family. Ned and Ted, thank you for joining us today.

Ted: Great, Cameron.

Ned: Thanks for having us.

Cameron: I’d love to start, if you guys can tell, because I remember hearing about this idea of employer income advances to employees several years ago. How did you guys first discover that this was a need at all?

Ted: This is Ted speaking. I love this story, because it’s a combination of a lot of interesting things between a non-profit, a business and a Credit Union. Really, how it started is the United Way had a training in Vermont called Bridges Out of Poverty, and a few of us from Rhino went to it. The training is really about understanding more about generational poverty, generational middle class and wealth, obviously, with a big focus on poverty.

Ted: When we came back from that training, one of the things we heard loud and clear is what’s some of the things that are inhibitors for generational poverty, are challenges. A few things really stuck out. One was credit, access to credit and also time. The final one that was interesting is they talked a lot about what is important, is relationship. We came back to Rhino and were trying to understand how difficult it was for our employees that were living more paycheck to paycheck.

Ted: We did a lot of asking the questions of our supervisors, our HR group and, obviously, directly to the employees. We learned a lot that we didn’t know, that, more about the need. The obvious things that most HR people tell you is, “We have people coming in and asking for payroll advance.” They raid their 401K, and if you talk to almost any privately held business owner, you’ll find out that people are coming to them all the time asking for small dollar loans. That’s how we basically rolled into this idea of … We sort of knew it, but didn’t know it, or didn’t pay attention to it. I’d stop there to say it’s was really due to the training, highlighting it a bit for us.

Cameron: Can you share like the big ideas? You went to this training and it affected you emotionally. It’s not like it was kind of a paradigm shift, but you saw that there was a role for Rhino Foods to play in your employees’ life that maybe is not the traditional role we think of a business playing. Can you tell us, like sort of just at the core, what is the big idea for what you guys have built, first at Rhino, and now you’re sharing more broadly with the world?

Ted: Well, I think that’s that interesting question. People, I would say, well, “I guess it’s because you guys are employee-focused. You care a lot about your employees. You’re trying to help advance your employees. You have a unique culture around workplace practices.” I think that with that, it makes it sound like we don’t look for things that make good business sense. We basically, yes, we come from a place of culture. We come from a place of giving our employees a voice, and motivating and engaging and lifting our employees up. That is true.

Ted: At the same time, we look at anything that we do from a business perspective. How does it help attract people? How does that help retain people? We heard, when we went to our supervisors, we had a lot of employees that would be really good employees and then they, next thing they’re not showing up to work, and they’re late for work, and then they’re late to take their kids to school. When you dig into that, you find out that a simple car breaking down with a $500 repair bill was creating absentee problems, which is sort of the number one thing that take people out of a manufacturing job.

Ted: We realized that we’re losing our best people, sometimes because they don’t have $500 in a savings account. Sure, we came at it from an employee perspective and caring perspective. At the same time, the business need is how to retain your best people.

Cameron: Tell me a little about the specific program that you developed though. Someone … This was the scenario of someone has their car break down, they don’t have … They can’t afford it. Maybe, in many cases, you said they disappear and you’re losing a good person. What did you guys build, and how did you communicate that to your employees, and how was it received?

Ted: Ned, I’ll let you take that one because you’ve been doing a lot of work spreading this idea, and sort of hitting the highlights for some people.

Ned: Sure. The model of the program is based on a partnership between an employer and financial institution. In our case, that financial institution is a Credit Union, NorthCountry Federal Credit Union in Vermont. NorthCountry was around at the beginning of sort of piloting this program. The idea is to move the sort of lending of money, either as a payroll advance or just a loan from a business owner, move that lending outside of the context of the business and into the Credit Union, into the financial system.

Ned: Basically, the way the program works is after the employer and the Credit Union have set up this partnership, essentially, an employee can come to HR, flag that they need a loan. They fill out an application with the HR personnel. That application screens for some basic eligibility. In our case, it’s eligibility around tenure, so length of time someone’s been employed at the business. Also, to make sure they’re not in any kind of corrective action. The reason for this is to sort of signal to the Credit Union that the individual is stably employed.

Ned: After the application is screened, it’s sent to the Credit Union and the HR person helps us schedule a time for that employee to go to the Credit Union, and they can get that loan within the same day or sometimes 48 hours. Really, the idea is that someone can come in, have an emergency, and have that emergency dealt within usually 24 hours, sometimes 48 hours. That’s sort of the basic concept.

Ned: One of the things I love about sort of the origin story of this program, which was before I was involved, instead of rolling it out as a big program, what the HR folks did at Rhino is they, basically, waited for the first person to come in looking for a payroll advance, and then they offered them this alternative.

Ned: Through sort of starting small, and making sure it worked, and finding all of the sort of pain points and eliminating them, they started a program that was grassroots, that worked for the first few people that used it. Then it sort of spread through word-of-mouth through the company until it then became, obviously, now it’s a formal part of the benefits package, and just explained to folks when they first come onboard at Rhino. That’s kind of the origin story and the basics of how the program works.

Cameron: It sounds like part of the core concept is when someone’s in a situation of financial fragility, and their car breaks down or they have a medical bill and they can’t afford to pay that from savings, their options are pretty limited. It’s either maybe an informal loan through family members, they approach their employer, as you said. Or otherwise, they’re really at the mercy, if their credit is not good, of, I assume, check cashers and payday lenders and pawn shops. That’s kind of the … I think, I can imagine how that’s really damaging to the overall health of an employee, and that can actually cause an employee to spiral into worse and worse financial situations, and then that impacts your relationship with them.

Cameron: I think one of things that’s really unusual about what you guys have done, compared to a lot of the employee benefits programs is, I had seen some interesting data around how you’ve quantified the positive benefit. I guess, as you said, Ted, that this isn’t just kind of a feel good, right thing to do, though it certainly is that. You’ve actually seen specific measurable results at Rhino Foods as a result of this program. I was curious if you could share maybe any individual success stories that stood out, but also kind of the hard numbers that might appeal to a hardened capitalist like myself.

Ted: Yeah. Ned, I think I have this right. I think in the first three years, our retention rate went up 28% improvement. We’ve been doing this for over 10 years, and we have some really good data from a business perspective, what this would do for your retention. I think the other part of the data that is out there, it’s very evident and is becoming more and more evident, is the concept that 65% of Americans don’t have $400 in a savings account.

Ted: The other thing is, when they ask people what is their biggest stress at work, it’s financial, something around their finances. That doesn’t just mean people living paycheck to paycheck. There’s a lot of people making six figure incomes that go to work and they’re concerned that they’ve maxed out their credit cards. Financial stress is, from a wellbeing perspective, is well documented as something. If you take those sort of macro-trends and say, “If you’re a business owner, do you believe that you have employees that are coming to work and they’re less productive due to financial stress?” The answer is, “100%, yes.”

Ted: If you are living in an environment where people are in manufacturing, or more paycheck to paycheck, that question about livable wage is always an interesting one. This is, I think, what the Bridges Out of Poverty taught someone like myself, who …. If my car broke down, even if I was Ned’s age and, who is … What are you, Ned? 35 or so. If I called my mom at 35 and said, “My car broke down,” and I was having trouble paying for it, and I needed $500 she would probably say, “You sure you don’t need 750?” I wasn’t missing work ever due to my car breaking down, unless that was my own personal choice.

Ted: Whereas, I think when you really dig into this, you have a lot of people … You just take yourself back and put yourself in their situation. Car breaks down, late to work, kid’s late to school, late to work. Car still is broken down. Kid’s late to school. Then they have to go to the teacher to try to explain why the kid’s late to school, and now you’re absent or late from work again and you lose your job.

Ted: There’s lots of data that shows how people in that income bracket are, basically, going from job to job, and a lot of times it’s as simple as a hot water heater breaking down or a car breaking down. It is this underbelly of what we have here in the United States that a lot of people just aren’t aware of. I think if any business really dug in, they would be able to figure that out.

Ted: I guess, then I would switch this to the Credit Unions and financial institutions. There’s plenty of data now, how that whole segment of our population is being not included. Give credit to NorthCountry Credit Union, who when we came to them, when we had this idea, we went to them. Bob Morgan is a CEO and he said, “Gee, my Board has actually been saying, ‘I need to come up with something that is very community focused. We’re coming up with these ideas but boy, wouldn’t that help the community if we could figure out how to work with Rhino and create this program?'”

Ted: Literally, between Bob and our HR Director, the program was up and running in one month. Quite frankly, it could be started in one week now that everybody knows how to do it. My answer … Sorry to go so long here, Cameron, but it is very much of a relationship of a business with their employees, wanting to make good business decisions, and a very real problem that at least this has one of the levers to help solve it.

Cameron: No need to apologize, Ted. You are the Man of the Year, so we’re happy to have you here. Just ribbing you a little bit, because I know how humble you are.

Cameron: Ned, I have question for you, but before we jump in, Ted, I realize probably a lot of our audience may not know what a certified B Corp is. I wonder if you could just give us, because it’s a community you and I are both part of and passionate about, could you just quick, share for our listeners what a Certified B Corporation is and why it matters?

Ted: Sure. What I tell people, the first thing is, as soon as I stop talking, get off the podcast and go Google “B Corp,” and they have a great website that really gives you everything you need to know, very easy to navigate around. The simple explanation is a B Corp is a group of businesses that are interested in doing what’s right for the business and making money, but also looking at their workers, their community and their environment.

Ted: What I like about B Corps are, you can’t just say, “Oh, that’s all, sounds good. I want to become a B Corp.” There’s actually a certification process and you need to take a … You have to meet a certain threshold, 80 points. A bunch of questions. You have to come back and send it to them. It basically is saying you are part of a B Corp if you can demonstrate that you’re doing these things.

Ted: It’s not prescriptive, like you get more points if you are an ESOP. If you’re not, don’t want to be an ESOP, who cares? What are you doing in your environment? It’s a real … They’ve done a great job with the certification to make it a maturity process. It, number one, is helping companies that care about those things, look at the certification, take the test or whatever, and see where their gaps are, and then try to improve.

Ted: The other things that I like about it is there’s retreats. There’s a lot of community building. It is a movement. The founders of B Lab thought of this as a movement. Their mission is, “Business is a force for good.” How can we have businesses that are focused on their governance, the workers, their environment and their community? Wouldn’t we be in better shape if all businesses were B Corps? is the theory.

Ted: Again, we were excited to be certified in 2013, and it’s really helped us focus our efforts in what we always thought was important for business. That’s how I would describe it.

Cameron: I love it. Thank you. Big fan of it. It’s a very rigorous assessment. I basically think about it like, just imagine the NCUA, if they primarily cared about environmental and community impact. It’s a really rigorous assessment, and just opens your eyes in all sorts of ways to great opportunities for positive impact, and often really win-win things like this Income Advance Program that you all have put together. With that, I’d love to segue.

Cameron: Ned, can you tell us a little bit about, because this is a program that started at Rhino Foods. You’ve had a lot of great, I think, just wonderful things you’ve done for your community and your workers, but also good business results. Now, you guys have taken it a step further, and so can you tell us what the program looks like today and what the resources are that are available?

Ned: Sure. Before I do that, there is one thing that we sort of skipped over a little bit, that I think is important to kind of insert now. That’s, we’ve talked a lot about income advance as this sort of response to emergency cashflow, but what we’ve found over time at Rhino is that sort of emergency situation where somebody needs some money to pay for a water heater or a broken car can become kind of the doorway into getting them banked, getting them into the financial system. Getting them paying back loans that improve credit scores that oftentimes are poor. Getting them sort of linked into other tools and solutions from the institution they’re working with.

Ned: When I think about one of my sort of first real intense connections with this program, was long before I got involved with the Foundation. Rhino had hired me with my sort of video production hat on to spend a day with an employee who had used the program. His name is Paul, and he works at the Warehouse Distribution Center.

Ned: Paul had made a mistake on his taxes, had not been able to pay that back, and so sort of spiraled into debt and took out an income advance loan to, I think, pay for some home repairs or a heater or something like that, and paid it back. Over the course of several years, took out loans and paid them back. Low and behold, his credit score went up. He then went on to be able to buy his first car at age 50. Get a loan for his first car at age 50. He was now able to get a mortgage.

Ned: In a lot of ways, income advance, because it’s sort of helping folks build credit, and helps them have the option to kind of put away savings, actually put them on a path to sort of financial stability that goes much further than that kind of immediate emergency need. I kind of diverted a little bit there, but I felt that was an important piece to make sure resounds because in some ways, those ripple even further than that initial emergency need.

Ted: Yeah. Ned, and Ned, I think you should also talk about the savings component, what we’ve seen there also. I’m glad you thought of this. This is great to make sure we fill in these blanks.

Ned: Sure. With our arrangement with NorthCountry Federal Credit Union, when employees first start the program, they first get a loan, they have an option at that time to opt out of continued savings. What that means is that unless the employee, at the very beginning of the program, says, “I want the payroll deductions to pay back my loan to stop once the loan is paid back,” if they don’t do that, then once they’ve completed their loan term with the Credit Union, that auto-deduction continues to go into an account at the Credit Union.

Ned: Essentially, that first pay period where they have paid off their loan is their sort of first payment into a savings account. We find that most people opt into that savings component and therefore, find themselves with a savings account that can help them the next time around. That doesn’t mean that people wouldn’t ever take out another income advance loan, but it gives them that, for some people, the first time they’ve had savings or a cushion to help them with unexpected cash needs.

Cameron: Ned, let me ask about that, because I think that’s a really great point. I think that’s a … A lot of the, all this research that they’ve done in the last couple of decades around the quirks of human behavior, and so I think I want to highlight, because I believe what I heard was, the key thing is that as an employee, the default setting is, “I get the small dollar advance. I pay it back through payroll deductions.”

Cameron: The default is that, “I will then keep saving that same amount that’s been taken out of my paycheck to start building up a savings account, rather than making me as an employee, have to opt-in to choosing to save.” Is that correct?

Ned: That is a much more succinct way to put it. We’ll be calling on you to explain that in the future, because that really was a perfect explanation of what it is.

Cameron: Well, I just think there’s so much research that shows that you just get completely different response rates when you ask the same question in different ways. I think that’s one of the smartest things you guys …

Cameron: It sounds like maybe you stumbled into, but that you’ve really built into your program, of really making it easy for … We call these “optimal defaults” at PixelSpoke. Just where the default behavior makes people healthier. Rather than having chocolate chip cookies and soda in our kitchen, having organic fruit and fizzy water or whatever. That’s just one random example.

Ted: Just one random … Yeah, and I think the other thing to … Going back to, “Why does this work?” We got invited by the Filene’s Institute to Stanford, and to talk about this program, and the speaker from Stanford was all about “frictionless.” How can you and the Credit Unions make things frictionless?

Ted: They actually used the Income Advance Program as what we’ve done is making it as easy as possible for everything to happen. Especially when you think about the people that don’t want to walk in the door of a Credit Union, don’t maybe have the transportation to get there, don’t like to fill out forms. What we’ve done is done our best to make it as frictionless as possible, and that’s why we believe we have such a high utilization rate.

Cameron: All right, so you guys are so interesting. I have to go to like rapid fire here, because I’ve got a lot of questions I want to ask you, so we’re going to go a little faster here. Ned, I think it’s really important so people can know, what does this program look like today, and what are the resources available? Where should a Credit Union or employer go to get engaged?

Ned: Sure. For the first 10 years the program was active at Rhino, Ted and HR would sort of field questions from other businesses that were interested in how to do this, and they would kind of do their best to be reactive to that. About two years ago, Ted decided that he wanted to be more proactive, and we found ourselves aligned with B Lab and their Inclusive Economy Challenge initiative.

Ned: In partnership with B Lab, we basically put some energy into creating an online guide that can take an organization step-by-step through the process of implementing an Income Advance Program, either with a model like we are using, between a business and a Credit Union, or there are some other fintech and other options to provide that financial component.

Ned: We are actively pursuing the spreading of this. We, obviously, have the online resources available, but we also are holding online cohorts, periodically, throughout the year where we get anywhere from a dozen to three dozen businesses on a series of calls, over a three month period, to try to get them up and running with the program.

Cameron: IncomeAdvance.org is the magic URL for the primary toolkit.

Ned: IncomeAdvance.org.

Cameron: All right, so as an entrepreneur and, I guess, a bit of a marketer myself, I find that I’m often a little bit more aggressive than some of the Credit Union folks that I meet. I get really excited about an idea like this because there’s a side of me that says, “Hey, isn’t this the Holy Grail?” Where not to overstate it, but you have a win-win-win, where it’s an opportunity for Credit Unions to grow membership and income. It’s an opportunity for employees to have better financial health and overall wellness, because that’s all interconnected, and it’s an opportunity for employers, for businesses to see concrete returns.

Cameron: I get excited about something like this. I think if I worked at a Credit Union, I’d be like, “Let’s just go market the heck out of this. Because how often do you have a product that you can feel really good about, and really deliver concrete results?” I’m curious if you guys think, since you’re working both sides of that, how do you think Credit Unions should market this? Should just be more driven by businesses like myself, like PixelSpoke? Which we’ve done reaching out to our Credit Union. Or should it more be driven by Credit Unions pushing it through marketing and biz development, out to businesses?

Ned: That’s a really good question. I don’t mind trying to field that initially here. I think it has to be a little bit of both. I mean, I think having a Credit Union or financial institution that’s willing to kind of get this program up and running, and kind of lean into the idea of sort of lending to people with different risk valuation, the key to this program, why NorthCountry’s charge-off rates are so low is because they are sort of carefully looking at tenure, and looking at making sure folks aren’t in corrective action. Because of that, they can really disregard terrible credit and offer loans to people based on their employment stability.

Ned: You sort of have to have that financial partner as an anchor to make the program work. What we’re finding is that we can be a very valuable partner, Rhino Foods and Rhino Foods Foundation, to Credit Unions that are trying to reach out to the business community. The ability for Ted, for instance, to talk sort of CEO-to-CEO and say, “Hey, this makes, not only fits with our social mission of the business, but also makes good business sense.” Hearing that come from Ted, it just is different than hearing it come through the marketing materials of a Credit Union or any other sort of institution that’s are sort of selling this as a product.

Ned: That being said, I think you need both of those things, and that’s why we’re working really hard with some of the financial institutions that are kind of taking this product on, to help them connect with B Corps, with other sort of socially minded business communities, so that it can kind of reach a critical mass where it’s known.

Ned: I mean, our goal is that at some point in the future, this will just be a benefit that exists in the standard benefit offering. That if a company wants to be competitive in an area, they need to have an Income Advance or an employee-sponsored Small Dollar Loan Program to offer.

Cameron: What, I’m curious, so who bears the risk? Is it, if someone defaults on the loan, in your case, does Rhino own that?

Ted: No, that’s what’s interesting. It is not the business. As NorthCountry Federal Credit Union would say, they’re in the business of loaning money and Rhino isn’t so, “Let them do what they do best.” At Rhino, we don’t ask any questions when it’s for. At the Credit Union, they don’t ask what people’s credit scores are. I have the data right here in front of me that last year of … NorthCountry now deals with about 40 different businesses in Vermont. After 10 years of doing this, they’ve grown it to 40 businesses. 2018, there were 1,000, a little over 1,000 loans generated, over $1.2 million, with a default rate of 2.41.

Ted: Over that time, they’ve averaged 3.69, and done over five million. Again, I think the thing when you asked, “Who needs to drive this?” Credit Unions should be in the business to grow their membership and grow their revenues and be sustainable. I mean, this isn’t something that, from a dollar value, is going to be … All that work, in some ways, could be two house loans.

Ted: At the same time, if you think about community service and sort of the reason that Credit Unions were first put on the map, I think that this really aligns well with people’s mission. I believe the leadership of a Credit Union needs to come at it from that standpoint first, and then figure out how to grow their base of the people they’re doing business with.

Ted: I think the biggest obstacle for us trying to grow this has, quite frankly, been Credit Unions. We don’t have a lot of people that are … They don’t see this as a great way to necessarily grow the revenue, and we’re trying to get them to see it works. It does grow your base, and if you’re innovative, you can figure out how to have that grow, and have people now have car loans with you. It definitely is something that is a community, in some ways, a community service for them.

Cameron: Ned, I’m curious. What would you say are the biggest pitfalls of a program like this?

Ned: I think the biggest pitfalls getting up and running for a Credit Union is that they’re looking at giving small dollar loans, so sort of not like loans where there’s a huge margin, and they’re looking at giving them to people that they traditionally wouldn’t lend to. Numbers like looking at NorthCountry’s having loaned $5 million over the past 10 years, and then having a charge-off rate of 3.7%, I think helps Credit Unions feel more comfortable about this idea of loaning based on employment stability.

Ned: I think, operationally, I don’t know. I mean, this is something that may come up if you have a conversation with the folks from NorthCountry. It strikes me as it’s very easy to run on their end. There are now, NorthCountry is able to process most of this with their sort of in-house platforms and automation. There are now great services that exist, software services that can come in and, essentially, package together these, sort of small dollar loan platform with financial counseling.

Ned: If a Credit Union is kind of looking wide-eyed at having to sort of invest, operationally, in kind of a low margin type of lending, those software platforms can make it more feasible. I think what, to echo what Ted said, it needs sort of leadership at the Credit Union to be thinking this sort of trifecta of, “We are here to serve the community. We can help support the business community and the impact that they’re going to feel. Doing these lower margin loans, grow our membership and get these folks connected to things that … To services that we can offer them once they’ve improved their credit or they’re more stable.”

Ned: I think it needs that sort of visionary. That’s why it isn’t everywhere yet. We’re still, the Rhino Foods Foundation still has a role to play. Hopefully, we will work ourselves out of our role to play, in this space at least, in time here.

Cameron: That’s great. All right. It’s been a great, having both of you guys on here. I’m really … Admire and impressed with what you’re doing. I’d love to go to our final take. Ted, I’ll start with you. Is there anything else you’d like to leave our audience with or reiterate from our podcast today?

Ted: Yes. We’re very interested in growing this nationwide, and we will support businesses in your area get started. We’ll even support Credit Unions that are interested in getting started. I’d love if you’d check out our website, and we’re really working on how to provide the technical assistance for Credit Unions and employers. That’s our mission and that’s what we’re in business for. Hopefully, if you’re listening, give us a call, we’d love to help

Cameron: Ned, anything you’d like to leave our audience with or reiterate?

Ned: Nothing to add. I think that’s the key thought. If you’re interested or you’re already doing this, let us know, because we want to be able to help bring the business community to the table.

Cameron: Super. Thank you guys so much for everything that you’re doing, and wish you all the best of luck as you keep moving forward.

Ted: Thanks, Cameron.

Ned: Thanks, Cameron.

Cameron: All right. Another enjoyable episode. I really love what those guys are doing. It’s such a really interesting, innovative and meaningful program they put together. I’d like to quick, share a few of the highlights for me. It was really interesting to hear that the inspiration came from this Bridges Out of Poverty program that the United Way had. I was just quick, writing down notes, Ted’s comment that there’s three things that really create that generational poverty. It’s the lack of credit and access to credit. It’s a lack of time, and it’s a lack of key relationships.

Cameron: I just think this is such an interesting program because it’s a partnership between a Credit Union and an employer. The employer and the Credit Union can work together to remove friction, as they said, so to take care of that time issue. In this case, the employer has the relationship, so often they’re not yet a Credit Union member, but based on the relationship capital with the employer, you can make a loan that you normally couldn’t.

Cameron: Then, of course, as a Credit Union, you all are experts in that access to credit side of things, and the administration of a loan. Then, I thought it was just fascinating to hear that connection that absenteeism is the number one reason that someone’s going to leave a job, especially in manufacturing, in their space. You think about that data, that over 60% of Americans cannot come up with $500 in an emergency. They don’t, just don’t have it in savings, and then that the number one stress at work, across all income brackets, is finance.

Cameron: You can see how they’ve gotten such great results. They talked about a 28% increase in retention, which is, that is a lot of money. That’s a very significant and material benefit to the business. Then, of course, it’s just such a meaningful, life changing thing for the employee.

Cameron: I really liked how Ned made the point that we shouldn’t get overly focused, its not just about the small dollar loan. That’s actually, that in a sense, that’s the bridge out of poverty. That’s that first step, which in turn lets the employee go from un-banked or under-banked, and continue to move up the continuum in a responsible way, so that they’re actually able to make direct loans and use credit and the financial sector as a force for good in their life.

Cameron: I think it was also just a really key point, and that was where I wanted to make sure it was clear in the podcast, that this is using some of the most cutting-edge research around behavioral economics in such a subtle little thing, but that many people who are in a state of extreme financial fragility, they often haven’t even known that savings is an option.

Cameron: I remember having a roommate a few years ago who is a really amazing individual, beloved by everyone who knows him. He talked about how it wasn’t until his late 20s that even knew there was a different way of life than just at the end of every month, calling up Wells Fargo and begging them to not charge him overdraft fees, or checks that had bounced or purchases that had not come through.

Cameron: Then I think lastly, just it was really interesting to hear sort of, “What are the challenges?” It sounds like the challenges, frankly, they aren’t that, anything beyond just thinking differently, that this is a great opportunity. It really is going to take vision from leadership, from the Board and the CEO or other executives, but that if that will is there, there’s a huge opportunity there to grow membership, really do meaningful work in your community, and really generate meaningful income for your Credit Union.

Cameron: Thanks for joining us today, as always. Until our next episode, I wish you the best of luck in making your Credit Union remarkable.

Hannah talking on the phone