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VOL. 123 | NO. 25 | Wednesday, February 6, 2008

MATCU Reaches Out To The 'Unbanked'

By Rosalind Guy

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Memphis Area Teachers' Credit Union (MATCU) has launched a second-chance checking program that will target the "unbanked," or people who don't have an account or immigrants who may not be familiar with the American banking system.

The "unbanked" represent more than 2 million families in the United States, said Renee Clark, strategic planning manager at MATCU.

"It might be because they have had problems in the past or it may be that they're just not familiar with financial institutions in this country, or whatever reason," Clark said. "There's a lot of reasons that people don't use banking accounts at all; they just cash their check and pay cash for everything. So we were looking to identify some of those people to see how we could help them.

"And we knew that all the major financial institutions wouldn't open an account if (potential clients) had an account closed through Chex Systems before, and so we decided to target that market and help someone that might have had a catastrophic event - maybe a divorce, or some job loss that would have caused them to have a closed account - at another financial institution."

Chex Systems is a national database that stores information from closed accounts. Once a person's name gets into that system, it's next to impossible for them to open a new checking account because of unpaid fees associated with the closed accounts.

Clark said that as a nonprofit institution, being able to offer people second chances appealed to MATCU officials.

"We're always looking for creative ways to provide services for the people who don't have accounts right now," she said.

Getting creative

Clark said reaching those potential customers won't require aggressive marketing on MATCU's part. As with some of the credit union's other programs, she said she believes word will spread quickly.

"When one person finds out, 'Hey, MATCU will do that for you,' then it seems like everybody will find out," she said.

Clark also said the collaboration with another local nonprofit organization will help draw customers. To get one year of free checking, Second Chance account holders can take the Common Cents program offered by the RISE (Responsibility, Initiative, Solutions and Empowerment) Foundation.

The Common Cents program, which lasts three hours, teaches basic personal financial management skills such as budget development, managing credit, financial goal setting and making good money choices.

The Second Chance checking program is a way to offer something tangible to people who complete Rise's Common Cents program, said Janice Jenkins, marking director for the program.

"Rise's mission is to help people build assets and we do that through providing financial education that helps them become independent," Jenkins said. "And we felt like one of the first steps to becoming financially independent is obtaining a bank account. MATCU offers us something tangible to give people once they complete the Common Cents program."

Customers also may visit www.balancetrack.org and take one of its eight financial educational quizzes. If they pass a quiz with at least 80 percent accuracy, Clark said MATCU will waive six months of checking fees.

The online quizzes are offered by Balance Pro, another organization MATCU typically refers its customers to for mortgage, auto loan and credit counseling. The counseling is provided over the phone.

Anyone interested in opening a Second Chance account need only visit the nearest MATCU branch and bring $100, which will be released to the customer after one year of maintaining an account in good standing.

Once they arrive, customers will be required to meet with a financial services representative who will pull their credit report.

"We do have credit requirements and so the normal credit requirements would apply," Clark said. "We look at everybody individually and try to help everyone."

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