Filene Debuts Check Cashing Pilot in Wisconsin's First Community CU

MADISON, Wis. – The Filene Research Institute, pushing ahead with a pilot program encouraging credit unions to set up non-member check cashing operations, is forecasting 12 to15 of the installations will be running by yearend in five states through League cooperation. The first one in the nationwide pilot, designed to bring in new members and provide an alternative to payday lenders, debuted last month at the main office of the $37 million First Community Credit Union in nearby Beloit, Wis. Offering check cashing to non-members “seems like a doubled edged way to bring in new revenue and new members, particularly Spanish-speaking people who are a growing segment in our community,” explained Jack Gill, president of First Community. First Community decided to join the Filene test after Gill said he heard about the program at the annual meeting of the Wisconsin Credit Union League in May. The Wisconsin League, along with those from Alabama, Delaware, Michigan and Pennsylvania, are participating in the Filene pilot which based on a 2001 Filene study stresses the opportunities for CUs to reach out to an untapped segment of the market. Mark Meyer, Filene’s director of innovation, said an average of “five installations per state” are being worked at by individual Leagues with some facilities further along than others depending on how fast the units can be up and running. The investment to start a check cashing unit remains minimal at about $6,000, said Meyer. Some credit unions offering the service have shown steady growth with one CU posting annual revenue of $40,000. The topic of launching check cashing operations was highlighted in a Filene-sponsored session during CUNA Mutual’s Discovery Conference two weeks ago in Boca Raton, Fla. The title of that session was, “The ABCs of Entering the Check-Cashing Business.” Some 40 credit union executives attended the session which focused on the growth potential and the number of adults who do not use banks or CUs to handle financial transactions. Gill told Credit Union Times the service has worked well so far in drawing potential new members who seek to cash payroll or government checks. “We ask that they fill out an application and we verify their ID,” said Gill. First Community has done no advertising to promote the service outside of a mention on a marquee. The service is limited to the credit union’s main office. Gill said the check cashing operation is part of an overall program to bring in Spanish-speaking business, and on that score the Beloit CU has hired a bi-lingual staff and done more training. -