Bluebird, the new prepaid card product being rolled out byWalmart and American Express, will provide banks and credit unions withmore competition in transaction accounts and technology, but willnot likely prove to be an existential threat to either, accordingto a noted credit union researcher.

Meanwhile, leaders at a credit union specializing in theunbanked and a national consumers organization both expressedconcern about the new offering.

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Ben Rogers, research director at the Filene Research Institute in Madison, Wis., said the new cardwill play on some consumers' desire to “unbundle” their financiallives and relationships instead of having them all in oneplace.

He said it will also appeal to consumers who have either haddifficulties opening checking accounts in the past, dislikechecking account fees or like the additional technological toolsBluebird offers.

“If you are someone who has had a problem opening a checkingaccount in the past, maybe because of a hit on Chex Systems, or ifyou have had bad experience with overdraft fees or really anything,Bluebird might seem appealing,” Rogers said, adding that Bluebirdmight be spur to force both banks and credit unions to look at howthey offer transaction services and with how much consumerdifficulty and at what price.

Rogers did not consider Bluebird a threat to the very existenceof either banks or credit unions because the card servicedoes not lend and both Walmart and American Expressexecutives have been firm about saying Bluebird will not offer loans.

“People are always going to need loans and as long as creditunions can offer them at low interest rates, there will be ademand,” Rogers said, “that will keep them seeking out creditunions.”

But, he said, the new prepaid card will have an impact on bothbank and credit union lending since the transaction accountsusually provide and anchor for the member or customer within aninstitution and that relationship often provides cross sellingopportunity for loans.

Credit unions may have to step up their loan marketing tocompensate, Rogers said, and may need to start making the wholerelationship a bigger selling point with potential members earlieron. And he added that the card could hit non-interest income stillmore since transaction accounts provide that through both cardinterchange and overdraft protection fees.

The difference between a relationship with the credit union andhaving a Bluebird card is one of the things that Erika Bell, vicepresident of strategy and services at the 51,000 member, $117million Latino Community Credit Union said her credit union points outto potential members.

Almost all of the members of the Durham, N.C., institution wereunbanked before joining the credit union.

“We strongly believe that a full-service financial institutionwith affordable and ethical products is the best option forfamilies,” Bell wrote in response to an emailed question aboutBluebird.

“Our prepaid card product is less expensive and, with arelationship at our credit union, members move on to establishcredit and better opportunities for the future,” Bell said. “A setting such as Walmart that only offers very basictransaction services may preclude users from accessing affordablecredit, establishing themselves in the mainstream financial system,and ultimately creating wealth for their families,” she said.

Indeed, Michelle Jun, senior attorney with Consumers Union, anational consumer protection organization, observed that unbankedconsumers have both near-term and longer-term needs.

Unbanked consumers need to be aware that while Bluebird mightoffer a suite of low-cost payment services, the card will nevertake the place of a true relationship with a financial institutionthat someone might need later to finance a car, house or obtain acredit card, she said

“The way the world is now, consumers need some sort ofrelationship with a full-service financial institution goingforward if they want to finance a car or a home and this service isnot that,” Jun said.