PASADENA, Calif. — As part of its effort to reach out to lower income and underserved communities, the $3.9 billion Wescom Credit Union has purchased a noted check cashing firm and says it will continue to operate it as a check cashing CUSO.
The company, Area Check Cashing Centers (ACCC), has eight check cashing outlets spread across Los Angeles and Orange Counties, the CU said. The acquisition marks the first time that a Southern California credit union has purchased a check cashing business, the CU said.
In addition to cashing checks, the new CUSO will include check cashing, payday advances, money order sales, phone card sales, Western Union wire services, and more, the CU said.
"Our goal in this acquisition is outreach, not profit," said Darren Williams, president and CEO of Wescom Credit Union. "Many in our communities rely on the lifeline services that check cashing businesses provide. Our purchase of ACCC will let us provide a financial advantage to those consumers."
The credit union said checks will be cashed with no holds and no need to maintain a balance in a deposit account. Short-term loans up to $250 will be available with no credit check. For consumers of modest means who may need cash immediately, this type of flexibility is valuable, and is not available at most traditional financial institutions, Wescom noted.
"This is an opportunity to serve a growing segment of the community that we would otherwise not be able to reach," said Keith Pipes, senior vice president of financial services, who will oversee the business. Pipes added that, while no immediate changes are planned to the business, "We will be looking at ways to improve efficiency in order to save consumers money."
Pipes explained that Wescom would explore how it could use the check casher facilities to introduce customers to the credit union and to credit union membership, but said that the CU had not yet decided upon a strategy.
"We have to be aware that not everyone who walks in the door is going to be interested in becoming a member," Pipes said. "Some are just going to look to get their checks cashed at a reasonable fee."
Wescom noted that the transactions at the new CUSO may be among the most regulated anywhere, falling as they will under the oversight by both the California Department of Corporations and the California Department of Justice, in addition to credit union regulation. The business is also subject to the Bank Secrecy Act and the Patriot Act.
Interestingly, Jim Preston, owner of ACCC, founded the check casher in 1994 and is currently listed on the board of directors of the California Financial Service Providers association, the check cashers' trade group in California.
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