One of the problems causing many Americans to forgo traditionaltransaction account relationships is their visceral response to theold adage, fool me once shame on you, fool me twice shame onme.

Once burned by excessive fee traps like excessive NSF, courtesypay and other hidden charges that have been traditional profitcenters for those who exploit the weakest among us, the exploitedusually go to cash.

These exploiters are banks, finance companies, and regrettablysome misguided credit unions. Using technology to improve the lotof the weakest should be the guiding light of every credit union.It is with some dismay that I read in the American Banker on Nov.16 that Congress, with the blessing of the Treasurer of the UnitedStates, was considering expanding bank and non-bank facilitiespowers to improve their ability to extend deposit abilities to theunbanked.

Credit unions should be alarmed that they were not considered apart of the solution. Could one suggest that the Treasurer hasconcluded that they are not a truly relevant solution anymore?

To a person living on the edge a fee trap which may cost you upto $300 for a $20 overdraft makes a bad situation worse. Mostpeople on the edge leave traditional financial relationships forthe expensive but safe confines of the cash economy.

Walmart has a new profit center in providing cash services tothe unbanked. The Treasurer is asking Congress to somehow joinbanks and non-banks to provide depository services to the unbankedat what can be assumed as a hefty profit.

The wealthy get the advantages of technology because they havethe wealth to not fall into the fee traps and they have the fundson deposit in an amount necessary to provide a reasonable profit tothe bank. Credit unions are attempting to build relationships withthe “A” level bank client.

Some credit unions have attempted to use technology to helplower-level members. I regret some credit unions are usingbank-style fees and fee traps as profit centers when they providetechnology to lower-level members. The credit union fee traps maybe not as abusive as the banks but they are abusive none theless.

If we look at the problem and ask what can a credit unionresponsibly do to provide a valuable service to the unbanked, anddo it in a fashion that protects the credit union? Credit unionsare not charities; no one is suggesting that they do something thatdoes not make financial sense. Proper structure of an accountrelationship could be a win/win for all.

The unbanked problems with traditional transaction accountrelationships are generally caused by persons whose finances andfinancial abilities are too limited for all the fast-moving partsthat affect a transaction account. Checks, ATMs withdrawals, offline debit, pre-authorized ACH and so many other things can tip thescale for a person that cannot leave large sums on deposit. Ifcredit unions had the empathy and real desire to help the unbankedthe non-“A” level member they would be tireless in their quest toassist the unbanked.

It is suspected that the Treasurer's new found love of a nonbankdepository solution has Walmart and Synovus Bank shooting Cupid'sarrows. Synovus Bank provides the cards for the Green DotCorporation that Walmart uses in its Money Centers.

If Walmart gets a depository solution it is pretty muchgame-set-match. Credit unions need a solution which works toprevent this potential alliance of unholy partners in the banking,non-bank and retail from becoming a reality. Credit unions will nothave a leg to stand on in Congress if they do not have the realnumbers showing that they are part of the solution.

Here is a potential solution which may actually work. If creditunions opened a restricted access account to an online debit cardmany of the problems with the “I cannot handle traditionaltransaction accounts” would go away.

A restricted online debt seems to be the simplest solution tothe problem. Members put their money in and credit unions maketheir income on interchange fees. Because the card gets deniedbefore the transaction causes an overdraft, there is little chanceof a poor person racking up junk fees. Credit unions could use areloadable debit card with reasonable credit union not bank likefees.

SECU of North Carolina has a very fair reloadable debit program.They are one of the few credit unions restricted to a 25 cent debittransaction fee, but when you consider the 6-cent charge to clear acheck they are making 30 cents a purchase by debit as opposed topaying an expense for clearing a paper check.

SECU for their reloadable debit card charges no activation fee,no reload fee, no cash advance or any other bank=like reloadablefees that some credit unions charge. They allow members with thisaccount to use their pay any one bill payer for free. They have aone-dollar-a-month fee which members can choose to put to the SECUfoundation. They charge an $8 lost/stolen card replacement fee andan $8 stop pay fee.

The Walmart card comes with a $3 issue fee when purchased at thestore. There's a $3 reload fee. There is also a $3 a month accountcharge. All this and the people are going to go shop at Walmartwith the card.

The Treasury is committed to forcing everyone to have a way ofgetting government payments directly. It seems that the onlyquestion left is whether it will be credit unions or Walmart.

There is clearly a choice between SECU and Walmart when it comesto pricing this service. Granted, SECU because of size of card basecan attempt to make it on volume. Surely most credit unions candevelop a fair pricing structure that may not be as generous asSECU but not as covetous as Walmart.

There is only one question left: would a member who has limitedability to deal with traditional transaction account relationshipsthink of depositing at their credit union before they cashed theircheck at Walmart for a fee and used their reloadable card? Onesimple answer is that they will choose Walmart if credit unions donot provide a reasonable option.

The least amongst us have been poorly served by the financialsystem, including some credit unions. Maybe the Treasurer iscorrect about facilitating the lives of the poor by allowingWalmart and Synovus Bank to work together to receive federalpayments.

For credit unions to prevent the Congress from changingthe laws and not allowing depositing in nonbanks, they have toprove they are an actual option. The credit unions are behind theeight ball because it seems the Treasurer of the United States hasalready concluded: “that if you are not part of the solution, youare part of the problem.”

BillBrooks is a former credit union CEO who now operates privateclient wealth management and credit union consulting businesses inRehoboth Beach, Del.