LATHAM, N.Y. — Wal-Mart's planned expansion of 1,000 "Money Centers" across the U.S. deserves more than careful scrutiny from credit unions because of its implications on the underbanked, according to the head of the New York State Credit Union League.

"Why would consumers want to cash their checks at Wal-Mart and be charged a fee?" asked William J. Mellin in a President's Message entitled, "CUs Can Better Serve the 'Unbanked'" appearing in the trade group's weekly newsletter.

In fact, wrote Mellin, the very audience Wal-Mart is now reaching and plans to target with its limited "but fee based" check cashing facilities raises concerns to CUs about future membership growth and how CUs distinguish their community role.

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In weighing in on the mega retailer's widely covered announcement to expand "Money Centers" in 2007-08 and offer a loaded Visa debit card, Mellin maintained the "safe assumption" is that Wal-Mart's mission "is to cash in on the estimated billions of dollars the unbanked earn in yearly income."

And there is skepticism as to whether Wal-Mart is really out to help these customers "become financially independent."

Instead, these consumers, said Mellin, could "cash their checks at a credit union and deposit those dollars they would have been charged by Wal-Mart into a savings account they could then maintain."

"These consumers are ideal candidates for credit union membership, and our movement should continue to explore new ways to recruit them and guide them on the path to become financially sound," Mellin wrote.

For those 135 CUs among the more than 300 financial institutions currently operating about 1,300 branches inside Wal-Marts nationwide, "an inherent advantage is providing value-added services," Mellin continued.

Credit unions provide asset-building tools to members and promote financial education and long-term relationships "in working to preserve members' dreams of purchasing cars or homes."

The CU mission in viewing individuals as member/owners separates CUs from other financial institutions, "whether they're known as banks, Money Centers or some other moniker," he concluded.

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