Frequently Asked Questions

• What is FiSCA? 

• What types of services do FiSCA members provide? 

• How large is the financial service center industry? 

• Are Financial Service Centers regulated? If so, by whom? 

• Who uses financial service centers? 

• Why do people choose to use financial service centers instead of banks or credit unions? 

• Do Financial Service Centers provide access to financial services to the unbanked and underbanked segments of the population? 

• Why do people choose to cash checks with FiSCA member locations when they have a bank account? 

• Is FiSCA doing anything to help low-and-moderate-income consumers build savings or earn credit? 

• How does the National Savings Program work? 

• What are payday advances or loans? 

• Who uses payday advances? 

• Why do people choose a payday advance to borrow money for a short period of time? 

• Are financial services offered at Financial Service Centers more expensive than those offered by banks? 

• What is the FiSCA National Scholarship Program? 

• Where can I get more information on FiSCA and financial service centers? 

Q:  What is FiSCA?
A: Financial Service Centers of America (FiSCA) is the national trade association representing America’s expanding financial service centers industry.  FiSCA’s membership is nationwide and provides an extensive array of retail consumer financial services.  FiSCA is comprised of more than 1,300 companies representing over 7,000 locations, ranging from single store mom & pop operators to national, multi-state chains.  The Association is headquartered in Washington, D.C., and serves as the financial service center industry’s leading voice on legislative, regulatory and business issues that affect its members and the rights of consumers to access basic financial services.

Q:  What types of services do FiSCA members provide?
A:   FiSCA members are continually expanding the roster of services offered to meet customer needs.  Current financial and other consumer services include:

• Check Cashing
• Debit cards
• Money orders
• Pre-paid card based savings accounts
• Money transfers
• ATM access
• Electronic bill payment services
• DMV license plates and title pick-up
• Small dollar, short-term loans (e.g.,  payday advances)
• Electronic tax preparation and filing

Q:   How large is the financial service center industry?
A:  The Financial Service Center industry is a formidable national and economically significant force that plays an integral role in the financial framework of millions of American households.  Through its 13,000 locations nationwide, the industry conducts more than 350 million transactions each year, providing an estimated $106 billion in various products and services to an estimated 30 million customers.  Those transactions include more than $58.3 billion in check cashing transactions, $17.6 billion in money orders sold, $8.3 billion in wire remittances, $13.2 billion in payday advances, and $5.4 billon in sales of pre-paid stored-value cards.  With over 7,000 member locations, FiSCA represents more than half of the Financial Service Center Industry.

Q: Are Financial Service Centers regulated?  If so, by whom?
A: Yes.   Financial Service Centers that meet one or more of the definitions of a type of ”Money Services Business" (MSB) (e.g., check cashing) are designated as MSBs and must comply with  the federal Bank Secrecy Act requirements applicable to it.  MSBs are subject to examination by the Internal Revenue Service.  More information about the federal regulation of Financial Service Centers can be found at www.msb.gov.  At the state level, Financial Service Centers must also adhere to state laws and regulations in the majority of jurisdictions, including a requirement that they be licensed or registered.  Financial Service Centers that offer payday loans must also comply with additional regulations, mainly at the state level, typically by a state’s department of banking or similar agency.

Q:   Who uses financial service centers?
A:    A survey of financial service center customers conducted in September 2006 revealed the following:

• Females and Males almost equally use financial service centers (51% Females/49% Males).
• Nearly half of customers (47%) are single and have never been married.
• Seventy-one percent (71%) of customers are between the ages of 26 and 55.
• Three-quarters of customers are employed full time.
• Customers are employed in many different ways. Some customers work in the service industry (25%) or are skilled (12%) or unskilled (12%) craftspeople.  An additional 17 percent hold management, administrative, sales or clerical positions (23%).
• Fifty-eight percent of customers have household incomes between $20K and $50K. 
• Fifty-eight percent of those questioned in the survey said they use check-cashing locations even though they have at least one type of account at a bank or credit union.

Q:  Why do people choose to use financial service centers instead of banks or credit unions?
A:   Consumers choose to utilize Financial Service Centers because the products and services offered by them match their needs and they are highly satisfied with the way in which their transactions are conducted.  The products and services provided by FiSCA members fill a niche that financial institutions have chosen not to fill.  The Financial Service Center industry has been successful because it satisfies the most fundamental needs of its customers.  These are:

• Liquidity
  Many low-and-moderate-income individuals and families live paycheck to paycheck and do not have the means to leave their hard-earned money in a bank account.  Financial service centers allow customers to access 100% of presented funds instantly, without having to wait for the funds to clear, thereby bringing them immediate liquidity. 
  
• Access (Convenience)
  Low-and-moderate-income consumers need access to financial services in the communities where they live and work.  As a result of demanding lifestyles, consumers need to conduct financial transactions where and when it is convenient, and in a safe environment where they feel comfortable and respected.  Financial service centers maintain stores in the communities where these consumers live and work, offering flexible hours (many 24/7), cashiers who speak the languages of the community, and who understand customers’ needs and concerns.
  
• Service
   Financial service center representatives deliver quick, courteous and personalized service to customers with each financial transaction.  In addition to the financial services listed above, Financial Service Centers also offer helpful products like transit system access cards, stamps and more. 
  
• Transparency
  Low and moderate-income consumers need to manage tight budgets and cannot be subject to surprise fees and incomprehensible charges. When money is tight, an unexpected charge can be catastrophic.  Unlike banks and credit unions, all fees charged by financial service are posted and known up front – there are no surprises.  All fees are paid at the time of the transaction, at the point of sale.

Q: Do Financial Service Centers provide access to financial services to the unbanked and underbanked segments of the population?
A: Yes.  Financial Service Centers provide financial services to many consumers who are either unbanked (people with no checking or savings accounts) or underbanked (individuals who have an account but do most of their “banking” through Financial Service Centers).  There are as many as 56 million Americans who do not use traditional financial institutions, such as banks and credit unions, when conducting their routine financial business.

Q: Why do people choose to cash checks with FiSCA member locations when they have a bank account?
A: Although 58% of FiSCA members’ customers maintain at least one bank or credit union account, the increasing cost of fees and minimum balance requirements in checking and savings accounts makes the use of banks, credit unions and other financial institutions expensive and difficult to manage for consumers. Thus, these consumers turn to Financial Service Centers as an alternative which provides convenient and affordable ways to manage their finances. 

Q: Is FiSCA doing anything to help low-and-moderate-income consumers build savings or earn credit?
A: Yes.  FiSCA members have proactively pioneered and implemented a Consumer Empowerment Program which is designed to advance the overall financial well being of low- and moderate-income consumers.  The FiSCA Consumer Empowerment Program includes:

• Savings
  FiSCA spearheaded and initiated a National Savings Program.  It negotiated a revolutionary mechanism with NetSpend Corporation, through which consumers can establish a no fee, FDIC-insured, interest bearing savings account, through their NetSpend Card.  Then, they can transfer money back and forth between the card and their savings account at no cost.  The accounts require no minimum monthly balance to maintain and are currently earning 5% interest.  No other card product offered on the market incorporates a savings element of this kind.
  
• Credit Building
  The need for a credit rating that is recognized by home and auto lenders, insurance companies, employers and others is fundamental.  Through the FiSCA/PRBC? (Payment Reporting Builds Credit) partnership, FiSCA members offer their customers the ability for their history of making timely rent and other recurring payments to bolster their creditworthiness.  Through the credit scores provided by the FiSCA/PRBC Credit Building Program, it is anticipated that customers will get needed access to credit at prevailing rates, and enjoy other benefits not previously available to them.
  
• Financial Education
  Current financial education programs do not adequately target the needs of many low- and moderate-income consumers because they teach about products and services these consumers do not use, or which are not accessible to them.  In recognizing this fact, FiSCA recently commissioned the development of the first of its kind “audience appropriate” financial education program which better reflects the demonstrated needs, preferences and behaviors of low-and-moderate-income consumers who choose to use financial service centers. 
  For more information visit the FiSCA Consumer Empowerment Program page.

Q: How does the National Savings Program work?
A: Access to virtual savings accounts through financial service centers is simple: 

• An individual purchases a NetSpend debit card at a participating financial service center that is a member of FiSCA. There are thousands of stores in neighborhoods across the country.
• NetSpend debit card holders can enroll in the savings program online or over the telephone.
• Once enrolled, a free FDIC-insured bank account is established for the cardholder.  National Savings Program accounts are established at either MetaBank (headquartered in Iowa) or Inter National Bank N.A. (located in Texas).
• Funds can be conveniently transferred at no cost between the debit card and the savings account via the Web, automated phone system, or via a live NetSpend customer service agent.
• Cardholders can set up automatic, recurring transfers from their debit card to their savings account to encourage and facilitate easy savings.

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Q: Are financial services offered at Financial Service Centers more expensive than those offered by banks?
A: The rates at Financial Service Centers are competitive and very often less expensive than those of banks for the same or similar services.  Financial Service Centers clearly post all fees in an easy-to-understand form, which enables consumers to know up-front what the exact cost of each transaction will be before the transaction ever begins. This also enables them to compare the costs of these services to what banks or others are charging for them.  Get information on cost comparisons now. 

Consumers make this purchasing decision based on a number of factors, including: cost, accessibility, and service.  Whether it’s to cash a check, obtain a small dollar loan, wire funds to a relative or any of the many other financial services offered, our customers choose us because we offer the best alternative to meet their current needs.