January Board Meeting: FiSCA looks to the future

Concluding a full day of discussion on the future of the industry, during the January Board meeting three Directors shared their own perspectives on what the industry should be considering looking forward five to 10 years.

First up was Rob Zweig of Check Center who suggested that the FSC industry has been presented with a unique, once in 70-year opportunity. The recent financial meltdown has created an environment in which “change” is far more accepted now by both consumers and businesses than in the past. For example, he noted that consumers are far more interested in saving now. At the same time, many businesses that had entered into the sub-prime market have retreated from serving it in the last year. The industry should take advantage of this unique macro-economic reality to position itself as the financial service provider of choice to a broader profile of customers. Specific recommendations included:

• Restructure the industry’s relationships with consumers, regulators and competitors
• Profile consumers, usage, attitudes and needs for product development and lobbying purposes
• Facilitate development of ‘small dollar loan’ alternatives 
• Facilitate store appearance improvement by qualifying and certifying suppliers in the appearance ‘space’ and creating a network / clearinghouse of suppliers on FiSCA’s web site. An added benefit of such an initiative is that it would stimulate affiliate / associate membership of suppliers
• Initiate a national check cashing network (e.g., Visa/MC) whereby FiSCA and major check cashers would build transactional network on payees, check cashers, etc.

Finally, Zweig urged that FiSCA continue to build strategic relationships with other organizations, like Wal-Mart, that are positioned to be major players in this market segment.

Next up was Bob Wolfberg of PLS. He stressed that the key to success in this industry was having passion for the business and for serving your customers. Those companies that had respect for their customers and passion for serving them would survive and prosper; those who did not have those qualities would not.  He also believes that as the population of the United States continues to grow, in large part due to immigration, the actual number of payroll checks cashed by the industry will continue to grow.

He sees the demand for small loans growing in the years ahead, regardless of what new regulations are adopted. As he said, “Government can’t repeal the Law of Supply and Demand.” He stressed that the industry has an amazing distribution channel to millions of low- to moderate-income consumers and that, as a result, the new products of the future will be developed by others in the private sector.  The industry needs to be open to selling / distributing these new products to its customers.

The final participant was Kyle Hanson of Checksmart. He initially focused on FiSCA’s future role, which he said should remain focused on defending the industry in Washington against punitive legislation. In fighting such threats, we will enhance the overall reputation of our industry and the products we offer (and by extension, the customers we serve).  He noted the recent FDIC report which defined the large number of Americans who are either unbanked or underbanked. There is clearly a need for the services the industry provides. At the same time, it is important that members of the industry and FiSCA remain fully engaged in the constant fight to change people’s perceptions. He sees as key initiatives for FiSCA in the future the Association’s Political Action Committee and the ongoing grassroots campaign (operated under the Coalition for Financial Choice) both of which he views as important elements in the overall campaign to protect the industry from overregulation.

Following the three formal presentations, the Board engaged in a general discussion on these and related topics. And while FiSCA and its Board members are clearly focused on the immediate challenges represented by the proposed Consumer Finance Protection Act, the formula of forward thinking strategies to help position the industry for future opportunities has already begun.