WASHINGTON -- Credit unions may have to contend with one more colossal competitor in the market following Wal-Mart's recent announcement to expand its Money Centers, but it has been done before.
"I think people will still go to credit unions because credit unions offer plenty of services as compared to Wal-Mart," NAFCU President/CEO Fred Becker commented. He added that credit unions offer services like financial education, "which I don't think Wal-Mart is interested in offering." The key is getting those consumers into the financial mainstream, which Wal-Mart's current offerings do not do and credit unions can.
Wal-Mart currently operates 225 MoneyCenters, as Credit Union Times previously reported (CU Times June 27, page 4), with plans to double that by yearend and again to 1,000 by yearend 2008. The centers will roll out a reloadable, Visa branded prepaid card and offer check cashing, money orders, bill payment, and money transfers.
CUNA said they knew this was a possibility for some time and recognized the importance of it to credit unions, noting that its own story on NewsNow had nearly 900 view on one day versus a typical high of 650-700. A spokesman pointed out, "CUNA has a task force considering 'membership growth,'" which includes under its purview "how to grow membership in the face of 'super-competitors' like Wal Mart entering the financial services business?"
Becker agreed, "This is a huge issue for both credit unions and community banks." Wal-Mart could do a lot without a bank charter, he said. However, he stated, "Credit unions have been very competitive against the very largest banks. I think they would continue to be competitive against the Wal-Marts."
