Your members’ home equity is sitting idle. Give it a card.
A HELOC credit card platform lets members spend their home equity like a credit card — at HELOC rates — while your credit union earns both interest and interchange.
No spam. No sales pitch. Just the decision framework your team needs. Confirm all vendor claims independently before acting.
CU 2.0 recommends Pesto as a strong starting point for credit unions evaluating HELOC credit card platforms. Pesto is purpose-built for credit unions — not a direct-to-consumer product bolted onto a wholesale channel — which means the CU retains the member relationship, the loan asset, and the brand experience. Their compliance framework addresses the regulatory complexity that stops most CUs from moving forward on their own.
Other players in this category include Aven (a direct-to-consumer fintech that competes for your members) and Figure Technologies (a digital HELOC platform with some institutional channels), but CU 2.0 evaluates fit based on your specific core, portfolio, and risk profile — not one-size-fits-all recommendations.
Home equity lending hasn’t changed in decades. The competition has.
Credit unions have been strong home equity lenders for generations. The relationship model works. The rates are competitive. The problem is the product experience — members still receive a checkbook or an ACH transfer and are expected to manage draws through a process that feels like 2005. Utilization rates on approved HELOCs sit below 50% at most institutions, which means billions in committed credit generates no interest income and no member engagement. The credit union has already done the underwriting. The equity is there. The draw just never happens.
The emergence of HELOC credit card platforms changes that equation. By placing home equity on a payment card rail, members can use their equity for everyday purchases, large expenses, or balance transfers the same way they use a credit card — but at HELOC interest rates that are often 8 to 12 percentage points lower than unsecured cards. Fintechs like Aven have already proven that consumers want this product. They raised $142M in 2023 to scale it. The members those fintechs are targeting are your members — homeowners with good credit and meaningful equity who expect their primary financial institution to keep up. The compliance complexity is real: HELOC card products sit at the intersection of Reg Z open-end credit, CARD Act provisions, and real-estate-secured lending rules. That complexity has caused many CUs to pause. But a small and growing group of credit unions are now piloting white-label versions of this product under their own brand, and the early movers are building a product advantage that will be hard to close later.
Where the HELOC credit card category is heading.
U.S. homeowners held over $17 trillion in aggregate home equity through 2023–2024, creating the broadest addressable base for flexible draw products in recent history.
Direct-to-consumer players like Aven and Figure have proven that members will choose card-based home equity access over traditional HELOC formats, increasing the cost of CU inaction.
NCUA examiners are paying closer attention to home equity concentration risk and third-party fintech arrangements, making a compliance-ready vendor more valuable — not less — for CUs entering this space.
Credit unions are actively looking for new income streams, and interchange revenue from a HELOC card product layers a second income source on top of interest income the CU is already earning on equity lending.
Rising rates from 2022–2024 crushed mortgage refi volume and pushed credit unions to look at home equity products — including card-based formats — as the primary growth lever in their lending portfolios.
What the data says about home equity and credit unions right now.
Six reasons your HELOC program is leaving money behind.
HELOC utilization at many credit unions hovers between 30 and 45%, meaning approved lines sit idle and the institution earns nothing on committed credit it has already underwritten. The reasons run deeper than member awareness — they’re structural, competitive, and regulatory.
HELOC utilization at many credit unions hovers between 30 and 45%, meaning approved lines sit idle and the institution earns nothing on committed credit it has already underwritten. The equity is on the books. The draw never happens.
Aven, Figure, and large banks are actively marketing card-based home equity products to the equity-rich, creditworthy homeowners that credit unions have spent years building relationships with. Every day without a competing product is a day those members consider leaving.
Checks, ACH transfers, and branch visits are how members access their HELOC today — a process that feels completely disconnected from the instant, card-based payments experience they have everywhere else. Modern members expect modern access.
HELOC card hybrids straddle Reg Z open-end credit, the CARD Act, and TILA real estate provisions simultaneously, and most CU compliance teams don’t have a clear framework for evaluating them. The result is delay — and delay is costly.
Many CU core processors weren’t designed to support a revolving home-equity product on card rails, creating real uncertainty about how to book, service, and report the asset correctly. Integration concerns cause promising pilots to stall.
Because few CUs have launched HELOC card programs, there’s limited examiner precedent, and leadership teams are reluctant to move forward without a clearer picture of the supervisory reception. The right vendor makes this manageable — not theoretical.
Everything Your Exec Team Needs to Decide on a HELOC Credit Card Platform
A plain-English explanation of how HELOC credit card platforms work, how they differ from traditional HELOCs, and why the product category has gained momentum over the past two years.
Eight non-negotiable criteria your team should evaluate before signing with any HELOC card platform vendor — covering compliance, integration, card network access, and underwriting controls.
A summary of the key regulatory frameworks that apply to HELOC card products — Reg Z, CARD Act, TILA real estate provisions — and the questions your compliance counsel should be asking any vendor.
A detailed look at Pesto’s platform, integration model, differentiation, and current proof points, so your team can evaluate them against the category-level buy box.
Three scenarios — conservative, base, and optimistic — showing how interest income and interchange revenue could combine for a $750M credit union, with clear assumptions and caveats.
A phase-by-phase launch plan covering contract execution, compliance review, core integration, staff training, pilot launch, and first-month monitoring.
The Minimum Buy Box for Any HELOC Credit Card Platform Vendor.
These criteria apply to every vendor in this category — don’t sign without checking them first. Pesto’s standing against each criterion is noted, but your team should verify all claims independently before proceeding.
- ✓ Regulatory compliance framework for HELOC-on-card Met
- ! Core and LOS integration capability Verify
- ✓ Visa or Mastercard network issuance Met
- ✓ Real-time credit limit and draw management Met
- ✓ Modern member-facing digital experience Met
- ✓ CU-configurable underwriting controls Met
- ! Transparent fee and revenue-share economics Verify
- ! Vendor financial stability and track record Verify
Purpose-built for credit unions. Not adapted from a consumer product.
Most HELOC card competitors — Aven, Figure — operate direct-to-consumer, which means they are competing for your members rather than working through your institution. Pesto’s model is built around the credit union relationship: you keep the loan on your balance sheet, you keep the member, and you keep the brand experience. Their compliance wrapper is designed specifically for the regulatory complexity of HELOC-on-card, which is the primary obstacle most CUs face before they can move forward. Confirm all claims, integration specifics, and pricing directly with the vendor before committing.
From Board Approval to Live Members in 90 Days
A realistic phase-by-phase plan for credit unions piloting a HELOC credit card product. Timeline assumes core integration compatibility — confirm specifics with your vendor before committing to dates.
- Execute vendor agreement and finalize partnership terms with Pesto
- Conduct compliance and legal review of HELOC-card product structure and disclosures
- Initiate core processor integration assessment with Pesto’s engineering team
- Establish internal project team across lending, compliance, IT, and marketing — assign executive sponsor
- Define underwriting parameters: LTV caps, credit score floors, eligible property types, geographic scope
- Complete core processor integration and begin end-to-end testing of account origination, card issuance, and transaction processing
- Finalize member-facing disclosures and marketing materials with compliance sign-off
- Train frontline and back-office staff on product features, member FAQs, and servicing workflows
- Run a limited pilot with employees or select members to validate the full experience
- Prepare board presentation and examiner notification package as needed
- Launch the HELOC credit card product to broader membership with a targeted marketing campaign
- Track applications, approvals, card activations, and utilization rates from day one
- Conduct first monthly portfolio review with the vendor — assess credit quality, transaction volume, and interchange income
- Gather member feedback and iterate on the digital experience and communication strategy
- Begin planning Phase 2: balance transfer promotions, digital marketing expansion, and referral programs
The Revenue Case in Three Numbers
Traditional HELOCs generate interest income alone. A HELOC credit card platform adds interchange revenue on every member transaction — layering a second income stream onto an asset already on your balance sheet. The illustrative numbers below are for a $750M credit union in a base-case scenario. Your results will vary.
Illustrative only — your results will vary. Base scenario assumes 500 accounts, $22K avg balance, 8.50% HELOC rate, $18K avg annual card spend, 1.50% interchange. Does not account for charge-offs, cost of funds, platform fees, or operational overhead. Confirm all assumptions with vendor and your ALM team before modeling profitability.
What Credit Union Executives Ask Before They Move Forward
The short answer is: it’s new enough that you should expect questions, but not so new that it’s uncharted territory. HELOC card products sit within existing regulatory frameworks — Reg Z, CARD Act, TILA — that examiners already understand. The key is entering the exam with a documented compliance analysis, clear disclosures, and a vendor that can produce its own regulatory opinion letters. Any vendor you select should be able to walk through their compliance approach in detail before you sign.
Pesto is CU 2.0’s current featured partner for this category, but they are not the only option. Aven and Figure Technologies are both active in the home equity card space, though their models differ — Aven is direct-to-consumer and competes for your members rather than serving them through you. CU 2.0 can help you evaluate fit based on your core processor, asset size, and risk appetite. The buy box criteria in this kit apply regardless of which vendor you choose.
The loan asset stays on your balance sheet, secured by real estate, which carries favorable risk weightings compared to unsecured consumer credit. The CFO-level considerations include cost of funds versus HELOC yield, impact on interest rate risk if balances grow significantly, and the all-in platform cost. We recommend running your own ALM scenario before committing to volume targets, and confirming all fee structures directly with the vendor before modeling profitability.
Aven raised $142M in 2023 specifically to market a home-equity card product to consumers — including your members. Your equity-rich homeowners are the exact demographic that product targets. A credit union that waits another 12–18 months to evaluate this category may find that a meaningful cohort of high-balance, creditworthy members have already moved their equity relationship elsewhere. The revenue loss is real, but the relationship loss compounds over time and is harder to recover.
Members apply digitally for the HELOC credit card product and — once approved — receive a Mastercard they can use anywhere Mastercard is accepted. They pay HELOC-rate interest on their balance rather than typical credit card APRs, which can be 8 to 12 percentage points lower. A modern app or portal shows available equity, current balance, transactions, and payment options. The experience is designed to be indistinguishable from a premium credit card app, while the underlying asset is a home-equity-secured position on the credit union’s balance sheet. Confirm specific UX details with Pesto.
The estimated timeline is 60 to 120 days from signed agreement to live members, based on vendor guidance — though your actual timeline will depend heavily on your core processor’s API readiness and the speed of your internal compliance review. The 90-day roadmap in this kit outlines the phase-by-phase steps: contract and compliance review in Phase 1, integration and pilot in Phase 2, and broader member launch in Phase 3. Confirm the specific timeline and integration requirements directly with Pesto before planning your internal project calendar.
20 Minutes. One Category Decision. Go or No.
A HELOC Credit Card Platform Decision Sprint with a CU 2.0 advisor walks your team through the buy box, your core integration readiness, and your compliance starting point — so you leave with a clear next step, not more open questions. Pesto is the default partner we discuss, but the sprint evaluates the category first. If another vendor is a better fit for your situation, we’ll tell you.
This page was generated by CU 2.0’s AI content engine using proprietary data and systems. AI can make mistakes — verify all information before publishing or acting on it. All ROI figures are illustrative only and your results will vary. Adoption and usage statistics are vendor-stated or publicly reported — verify current figures before use. Pricing and contract terms must be confirmed directly with the vendor. This content does not constitute legal or compliance advice; engage qualified counsel before launching a HELOC credit card product.