REAL Solutions Program Update NCUF Board Meeting June 2007

1. REAL Solutions Program Update NCUF Board Meeting June 2007 1

2. Expanded League Participation • Pilot Leagues • Wisconsin, Ohio, Missouri and Maryland/DC • In Implementation • Alabama, New York, New Mexico, Connecticut, Massachusetts, New Hampshire, Rhode Island, Arizona, Kansas, Oklahoma, Virginia, Arizona, Florida and Indiana • Interested • Oregon, Colorado, Montana, Texas, Illinois, Louisiana • Approached • California

3. Participating Credit Unions 261 from 14 Leagues Asset Size $52 Billion in Assets Number of Members 6.2 Million Members Number of Locations 825 Locations Expanded Credit Union Participation Estimations Made for Connecticut And Massachusetts Smallest CU at $1 Million; Largest at $1.6 Billion

4. Finding New Ways to GROW Western Credit Union Over 250 New Hispanic Members Financial Counseling Programs English Classes Adapted to the Changing Neighborhood • Community First Credit Union • 100 New Hispanic Members • Mobile Consulates • Accepts Undocumented Applicants • Hiring the right staff • Willing to go Slow and Steady

5. Finding Ways to Grow Suncoast Schools CU Provided 11,000 + payday loans CU Lending staff believe this has had an impact on membership growth. This is a product that is difficult to match. Andrews Federal CU Added 2,758 New Members From a Low-Wealth Predominantly African American Neighborhood By adding a new branch with the “right services”

7. Expanded Credit Union Products • Education • Transaction Products • Credit • Sub-Prime Used Car Loans • Small Savings • Step Up CDs • Wealth Accumulation • Predatory Mortgages • Payday Loan Products New Product Development

8. Sample Results • Expanded Interest • Wisconsin • 19 Credit Unions • 12 More in Pipeline • Tracking issues • Overall 45,000 users • $12.5 Million in unused RAL Loans • Many CU assisted sites • 2007 States • New York • Virginia

9. Creating Tools

10. Sample Results

11. Sample Payday Lending Results • Area of Highest Credit Union and League Interest • Over 75 CUs offering low cost products • Thousands of consumers/members accessing lower cost products • Monitoring to be put in place • Systems Group Task Force – Helping to Answer the Questions • Data Collection on Credit Union Costs • Consider National or State by State Guidelines • Talk to CUNA about proposed legislative Language

12. Finding the Pricing “Sweet Spot” • Pricing Measurement • Making it Better Versus Making it Worse • Telling the Story • Be Bold – don’t spin the message but tell it like it is • Understanding the Market • What the new MAPR may mean to military members • Take away any options or create a new market for credit unions • Making several existing credit union products un-doable • Understanding Pricing • Stop measurement by APR but by cost • Research several successful models to determine point of breakeven/profitability • Does experience in making payday loans mean lower costs to consumers and members

13. Sample Results Prospera Credit Union Good Money 5700 Advances Done $2 Million in loans disbursed Approval rate is 95% Unbanked consumers $9.90 / $100 for 2 weeks $4.00 in losses $3.00 TA Costs 909 New Members $202,000 Saving • Ohio Credit Unions • Stretch Pay • 25 participating credit unions • 21,700 Loans disbursed • $7.42 Million in loans disbursed • $18/100 x2=$36 versus • $2.64/$100 (SP) • Saving Members • $2,475,712 Savings

14. Sample Results Freedom Loan St Louis CCU Started March 1 200 Loans Disbursed 25% plus an annual fee (Under 36%) Member Response – “Thank You This loan is like a late Christmas Gift – I needed this money and had no where to go but the payday lenders – My Credit Union really Helped me out” Quick Cash Energy Federal CU Started in 1999 5700 Loans Disbursed $42 Million Disbursed $142,500 Fees Collected $25,000 Charge Offs Average Loan size $800 Or $3.3 / $100 Credit Union eliminated the additional interest rate in 2006 And saved members $637,500 Savings

15. Forging Partnerships • Aspen Institute – Annie E. Casey Fnd. • Predatory Car Loan Programs – Designed for Credit Unions • Internal Revenue Service • NCUA

16. Opportunities REAL Solutions • Political Advocacy • “A seat at the policy table” • National Branding and Awareness Campaigns • Learning Center • Wanted by CUs • NCUF • Increased CIF • Name Recognition • “the New and Bolder Foundation”

17. Things to Think About • Innovative products and pricing strategies may not be understood in the marketplace • Consumer groups and other credit unions may question product pricing strategies and certain terms and conditions • What to do with products to close to the pricing edge? • Be bold – tell it like it is • Need help persuading that “low-wealth” doesn’t mean no ROI. • The “untapped” story. • Look at Wal-Mart. • Opportunities missed • Managed growth means some leagues have to wait to implement • Adding new and fresh business models • Staying relevant by finding the right new products and business models • Rapid ramp up has staff stretched to continue learning • Institutionalizing Knowledge • Need better documentation and knowledge management systems. • Still overly dependent on a single person • Program versus project • Financial and human resources