A California credit union serving more than 84,000 people has launched a pair of new products aimed at helping consumers build a credit profile and access traditional financial products, joining a larger initiative in Los Angeles to bring services to. the provision of unbanked and underbanked people.
Financial Partners Credit Union offers the EZ Card, which the institution bills as a “no check” checking account. The accounts are free of overdraft fees, the credit union said, and the monthly fees are waived when consumers make monthly deposits of at least $ 100 or use the EZ card for purchases at least 10 times per month.
Members of credit unions with an EZ Card account have free access to more than 30,000 ATMs across the country, as well as digital banking services from financial partners.
Another new offering, the Credit Union’s Credit Builder Loan, is designed to help consumers build a credit history or repair bad credit. The loan amount is deposited by the credit union and held in a savings account until the loan is fully repaid. For a year, consumers make monthly payments that are reported to the three credit bureaus. After making 12 months of on-time payments, the loan is paid off in full and the credit union member has access to the funds.
“About 25% of households in the United States still do not have a savings or checking account and rely on expensive and often predatory institutions for financial services,” said Nader Moghaddam, President and CEO of Financial Partners Credit Union. “Our goal is to help Angelenos be financially successful and these products are a great place to start. “
The new products were launched as part of the BankOn initiative, which strives to provide affordable financial products to consumers who do not have access to them or who choose to bypass traditional banking services. For many consumers, the inability to meet account minimums or pay account fees can present barriers to using traditional financial services.
Faced with such hurdles, consumers are turning to check cashing services, payday loans, prepaid debit cards and other alternatives.
According to the Federal Deposit Insurance Corporation, 7% of Americans do not have a bank account and up to one in four Americans do not have adequate access to the services typically offered by credit unions and banks. The Wharton School of Business at the University of Pennsylvania has found that avoiding traditional financial services can be costly for consumers in the long run.