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Self-Help expands check-casherCU hybrid model
DURHAM, N.C. and SAN JOSE, Calif. (8/17/11)--The Center for Community Self-Help, which is affiliated with Self Help CU, Durham N.C., and Self-Help FCU, San Jose, Calif., announced a partnership Tuesday to expand a check-casher/credit union hybrid model. The center partnered with Citi Community Development--part of Citi, a global financial services company--to provide the model that has the look and feel of a check-cashing business, but also provides responsible financial products and services tailored for unbanked individuals (ENP Newswire Aug. 16). The center’s first micro branch, which primarily serves Latino immigrants, opened in San Jose in January. “The micro branch is designed to meet the financial service needs of low-income families today and to connect them with actionable education and asset-building products that create economic opportunity and security for the future,” said Martin Eakes, CEO of Self-Help CU. “Through this collaboration with Citi Community Development, we will be able to serve thousands of Californians that would otherwise lose significant portions of their incomes to predatory providers.” Roughly 106 million unbanked and underbanked people in the U.S. use alternative providers for their day-to-day financial services because they are unable or unwilling to access financial products and services from mainstream financial institutions, said the organization in a press release. In California, more than 47 % of Latinos, or nine million, are unbanked. As a result, alternative providers--such as check cashers, pawn shops, consumer finance companies and payday lenders--have emerged, sometimes using irresponsible practices, the center said. Twelve million people every year are trapped in a cycle of payday loans with interest rates as high as 400%, transferring $5 billion every year from working families to predatory payday lenders, according to the Center for Responsible Lending, based in Durham. The micro branch provides asset-building opportunities not available when people cash their checks at alternative check-cashing outlets. These include depository services, the chance to develop or repair credit ratings and access to responsibly provided credit. To help clients take advantage of these opportunities, the micro branch model uses innovative, “in-line” financial education, in which “bite-size” financial management concepts are delivered at the teller line, when consumers are focused on their financial decision-making.


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