DOWNLOAD PRESENTATION TO FDIC
DATE: October 24,
2007
FiSCA Appears Before FDIC Advisory Committee on Economic Inclusion
-- Calls for Partnership to Improve Service to Low and Moderate Income
Consumers
Washington, D.C. -- The
Financial Service Centers of America (FiSCA) appeared today before the
FDIC’s Advisory Committee on Economic Inclusion (ComE-IN) to
present it with the opportunity to utilize the financial service center
network to enhance the overall provision of financial services to low to
moderate-income consumers. FiSCA also presented specific recommendations
as to how the Committee and FiSCA can work together to expand financial
services to this segment of the population. FiSCA represents a
national network of more than 13,000 financial service centers across
the nation that engage in more than 350 million consumer financial
transactions per year. Its presentation to the Advisory Committee
provided the traditional financial services community with an overview
of the financial service center industry. The presentation was supported
by statistical studies of the industry conducted by a national research
firm. Among the findings of the studies were the extraordinary
levels of customer satisfaction with the products and services provided
by the industry and the conclusion by its customers that these products
meet their everyday needs.
The Committee’s directive is to review basic
retail financial services such as check cashing, money orders,
remittances, stored value cards, short term loans, savings accounts and
other services that promote asset accumulation and financial stability
for individuals. It then seeks to develop incentives for banks and other
mainstream financial institutions to offer these services.
Interestingly, FiSCA members have been offering these exact products and
services and serving this market for more than 50 years. Despite this
history of service, FiSCA has not been asked to serve as a member of the
Committee.
“We commend the FDIC for this initiative to
explore how best to promote wealth accumulation and financial stability
among low to moderate income consumers,” said Gerry Goldman,
FiSCA’s General Counsel. “ However, given that FiSCA members
have been in local communities serving this population for more than 50
years, have been at the forefront of product innovation to address their
changing needs and have an outstanding reputation for excellent service
at a fair price, it is troubling that the FDIC has not made FiSCA a
member of its Advisory Committee on Economic Inclusion. Nevertheless, we
used this opportunity to educate committee members about our industry
and the consumers we serve and to present specific recommendations as to
how this segment can be even better served in the future.”
Joe Coleman, Chairman of the FiSCA Board of Directors
and President of Rite Check Cashing, Inc. of New York, and Patricia
Cirillo, President of Cypress Research, a well-respected independent
research firm served as the FiSCA representatives and presented the
Advisory Committee with an overview of the financial services industry
and the customers it serves. Then, Coleman outlined FiSCA’s
specific recommendations to enhance overall financial services to low
and moderate income consumers. These included:
-
To include the financial service center industry, represented by
FiSCA, as an equal partner on the Advisory Committee, as a first step
toward a productive dialogue addressing services to low- and
moderate-income consumers;
-
To encourage the use of the financial service center network as a
ready-made delivery channel to reach low- and moderate-income
consumers;
-
To provide banks with the direction, incentive and motivation to
make banking services available to financial service centers;
-
To actively support the bank discontinuance bill when it is
introduced and to otherwise work to end bank discontinuance;
-
To dispel the myths about the compliance burdens and risks posed by
MSBs and replace them with the facts;
-
To expand access to credit by endorsing and encouraging, by all
available means, the use by banks of alternative credit scores such as
those developed by PRBC;
-
To promote and encourage the expansion of savings programs such as
the FiSCA/NetSpend National Savings Program, in order to encourage low-
and moderate- income consumers to take advantage of these savings
opportunities;
-
To promote and encourage the expansion of partnerships and
alliances between banks, credit unions and financial service
centers;
-
To promote, encourage and support financial education programs that
reflect demonstrated needs and preferences and are designed for low- and
moderate-income consumers who use financial service centers; and
-
To form a “Small Loan Task Force” comprised of
regulators, consumer advocates and providers from within the financial
service center industry in order to foster constructive dialogue about
the best ways to ensure the availability of small dollar, short-term
loans and other forms of credit, while still ensuring that consumers
have protections from lending abuses.
“The FDIC has two choices, continued Goldman.
“ It can reinvent the wheel and force the banks to offer services
to consumers in neighborhoods where they have clearly demonstrated they
are not interested in operating. Alternatively, it can work with the
financial service center industry and leverage our extensive customer
knowledge and community-based network of stores to deliver service
innovations. We hope the FDIC will come to understand that FSCs have
evolved. Financial service centers can co-exist with traditional banks
and even work together to offer consumers more and better choices. The
FDIC, the banking industry, and more importantly, the consumer, would
greatly benefit from this partnership.”
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FiSCA, founded in 1987, is the national trade
association for more than 6,500 individual financial service centers
across the United States. FiSCA members provide a wide variety of
financial services and products to their communities, including check
cashing, money orders, money transfers, and electronic bill payment
services, automatic teller machine access, government benefit and
payroll payments, small dollar short term loans, electronic tax
preparation, prepaid debit cards, deposit acceptance services, public
transportation fare and token sales, motor vehicle license plate and
title distribution, postage stamp sales and numerous other services. For
more information, please visit www.fisca.org.
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