LATHAM, N.Y. -- Credit unions ought to be paying close attention to what's behind the Wal-Mart "Money Center" launch since it raises a serious industry challenge in reaching the underbanked, the New York State Credit Union League said today.
In weighing in on the mega retailer's widely-covered announcement of last week, the president/CEO of the New York trade group, William J. Mellin, said the very audience Wal-Mart is now reaching with its limited, "but fee-based" check cashing facilities poses new CU concerns.
"Why would consumers want to cash their checks at Wal-Mart and be charged a fee?" asked Mellin in a President's Message entitled, "CUS Can Better Serve the 'Unbanked'" and appearing in the league's newsletter this week.
These consumers, wrote Mellin, could "instead cash their checks at a credit union and deposit those dollars they would have been charged by Wal-Mart into a savings account they could then maintain."
The fact is, he wrote, Wal-Mart's apparent mission in offering its prepaid debit card at such facilities "is to cash in on the estimated billions of dollars the unbanked earn in yearly income."
"These consumers are ideal candidates for credit union membership, and our movement should continue to explore new ways to recruit them and guide them on the path to become financially sound," Mellin concluded.
In weighing in on the mega retailer's widely-covered announcement of last week, the president/CEO of the New York trade group, William J. Mellin, said the very audience Wal-Mart is now reaching with its limited, "but fee-based" check cashing facilities poses new CU concerns.
"Why would consumers want to cash their checks at Wal-Mart and be charged a fee?" asked Mellin in a President's Message entitled, "CUS Can Better Serve the 'Unbanked'" and appearing in the league's newsletter this week.
These consumers, wrote Mellin, could "instead cash their checks at a credit union and deposit those dollars they would have been charged by Wal-Mart into a savings account they could then maintain."
The fact is, he wrote, Wal-Mart's apparent mission in offering its prepaid debit card at such facilities "is to cash in on the estimated billions of dollars the unbanked earn in yearly income."
"These consumers are ideal candidates for credit union membership, and our movement should continue to explore new ways to recruit them and guide them on the path to become financially sound," Mellin concluded.
