Checking program gives those with mishandled accounts a second chance

MILWAUKEE – Consumers who have misused their checking accounts or have been reported to ChexSystems for unpaid settlements are getting a second chance to make a fresh start thanks to a money management program. The Get Checking program started three years ago after discussions among Milwaukee’s credit unions, banks, rental communities, utilities and city officials on the impact EFT 99, would have on residents who often relied on check-cashing stores to conduct financial transactions. EFT 99 was the federal government’s initiative to convert most of its nearly 1 billion annual payments from paper check to electronic funds transactions by January 1999. “EFT 99 was right around the corner and the various segments of the community came together to discuss how we were going to reach those who don’t have checking accounts,” said Kim Terry, housing and financial management educator for the Milwaukee County/University of Wisconsin Extension office. Three credit unions were among the early discussions – Guardian Credit Union and Appletree Credit Union, both in West Allis, and Alliance Credit Union in Pewaukee. They, along with 10 banks, are Get Checking participants. The way the program works is consumers who have been turned down for a checking account, can pay $35 to attend a six-hour class that details how to monitor the account and manage money. Upon completion, participants are given a certificate, which allows them to open a checking account at any of the program’s financial institutions, often for little or no minimum deposit. Members and customers must clear any outstanding debts with prior institutions and can not have committed check fraud, Terry said. More than 700 people have completed the program and roughly 40% have gone on to open checking accounts. The Extension office is currently tracking those participants who have not opened accounts to find out why, Terry said. At Guardian Credit Union, 25 Get Checking participants have opened accounts here with more than 75% of those members using other services such as direct deposit, time cards and Internet banking, said Bonnie Goebel, branch manager. “Of all the accounts we’ve opened, we have not had to close any in the three year-period and that says the program is working,” Goebel said. “If they’re willing to pay the money and commit to the class then that’s a strong indication that they’re going to be better money managers.” Guardian has $110 million in assets and 38,000 members. Credit unions recognize that many times, circumstances arise that result in a checking account being closed and people may feel there’s no way out because a report to ChexSystems often prevents one from opening a checking account for five years, said Deb Tomich, vice president of marketing and human resources at Alliance Credit Union, one of the program’s participants. “We’ve seen people who’ve gone through a divorce or had a mishap that caused their account to be closed,” Tomich. “The program even works for high school students who are just starting out and need help with the basics. The whole idea of having a checking account is for that member to make us their primary financial institution.” Tomich said 30 members have gone through the program and many have secured personal loans and credit cards. Alliance has $28 million in assets and 8,800 members. The program is gaining such national momentum that consumer groups and financial institutions in Boston, Los Angeles and Minneapolis have expressed interest. With support from eFunds Corp., an Arizona-based electronic-payment processor, the Consumer Credit Counseling office, which teaches the classes, is hoping to introduce the program in other cities. Likewise, the Department of Workforce Development in Madison recently issued a $25,000 grant to bring the program to Madison, La Crosse, Eau Claire, Rhinelander, Dodgeville, Marinette/Peshtgo and Stevens Point. Last year, the department began monitoring where welfare-to-work checks were being cashed, said Jodi Owens, small business development and financial education specialist. Of 30,000 checks sent out, 87% were cashed at places other than banks and credit unions. “The program was a call to action for our community,” Terry said, “and we’re hoping even more credit unions and banks will sign on.” -