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CHICAGO – The Fannie Mae Foundation’s KnowledgePlex has launched a four-part online chat series aimed at improving services to the nation’s 20 million underbanked. The series is presented in cooperation with the National Community Investment Fund’s Retail Financial Services Initiative, and is based on a strategy guide released late last year by the RFSI. The first session, held March 9, discussed the value of check-cashing partnerships, prepaid cards, and second chance accounts. Upcoming chats will focus on tax preparation services and alternative refund anticipation loans, alternative payday loans, and community partnerships. One of the speakers in the March program was Joy Cousminer, president/CEO of Bethex Federal Credit Union in New York City. BFCU was founded in 1970 as a low-income financial institution. It now has 10,000 members and $9 million in assets. Cousminer indicated she hoped to change some minds about check cashers. While today the credit union has two branches, it also has what she considers 150 virtual branches in the form of check cashers. Many New York check cashers are open 24/7. She indicated the alliance between the check cashers and the credit union began when the credit union, which wanted to market all its products and services to as many low-income people as it could reach, realized most check cashers’ customers are just like the credit union’s members, and many members were already using check cashers. When BFCU approached the check cashers, “We received a good reception,” Cousminer noted. “The partnership began with a handshake,” and there is still no formal, written agreement. The credit union puts up posters in the check cashing offices. Overhead videos play a constantly streaming message about the credit union, there is written material all around, and a BFCU representative regularly visits the check cashers. In fact, Cousminer said, some check cashers have been including in their ads the fact that people can join the credit union at the check cashing office. “The cost to the credit union is small,” Cousminer said. “Probably the biggest cost is a part-time marketing person.” People can join BFCU by submitting an application to a check casher. There’s also a point-of-banking terminal, a teller-assisted ATM that allows credit union members to conduct transactions, including making free deposits into their credit union accounts. Cousminer noted the results of the BFCU-check cashers’ alliance so far: * The effort has attracted approximately 300 members, $30,000 in deposits and $150,000 in loans. * The partnership compares favorably with SEGs in bringing in new accounts, but loans are smaller and there is more delinquency. * In addition to an increase in members, the credit union enjoys improved services to existing members and greater exposure in the community. She also listed what she considers critical success factors: * Buy-in by the check cashers’ tellers. * A good field person and appropriate materials. * Well-informed staff in the credit union to welcome members referred by check cashers. * Equal treatment for all members. More information about the chat series, and a copy of From the Margins to the Mainstream: Innovative Entryways for Underbanked Markets, is available at the Knowledgeplex Web site, www.knowledgeplex.org. [email protected]

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