COLUMBIA, S.C.-Bad things happen to good people, but Carolina Collegiate FCU here is trying to make sure that if they do, they only happen once.
The $72-million, 13,000-member credit union has launched "Rebound Checking," a product designed to help consumers who have had problems with financial management.
"We see young people and other adults who have never been able to take care of their finances, and so they have a lot of boundaries and limits placed on them," said VP of Human Resources/Business Development Helen Powell. "Our intention with this is that we don't want them going to the finance companies; we want to see what we can reasonably do for them and put them in a good place."
Powell explained that the program was instituted as a result of poor economic conditions leaving an increasing number of consumers in dire financial straits. "We've seen a higher percentage of people unable to get checking accounts" because of charge-offs or a history of writing bad checks, she said. While the CU long considered running such an offer, it wasn't until recently, she added, that the cumulative effect of the last few years' economic conditions really seemed to merit such a product.
Rebound Checking is structured so that participants pay a $15-per-month fee and must open their account with a minimum deposit of $25. There are no minimum balance requirements beyond the opening deposit, however direct deposit is required and check deposits are limited. Additionally, said Powell, "we only let them use a debit card, because obviously they've not been able to use checks in the past." Overdraft protection is also unavailable for members using Rebound Checking.
What Else Is Required
The program-the name of which is a play on words, thanks to the CU's association with the University of South Carolina and the school's athletics department-requires that members participate in Accel, a free financial-literacy service which provides 24-hour access to help with debt payments, how to proceed if an account has been charged off and more.
"We can't be their school teacher and say 'You have to do this,'" said Powell, "but hopefully once we put them in touch with Accel, they'll feel they have that contact and they'll realize that there is a positive path out there: it's self-discipline and wanting to take charge. We have it set up that we require you to do this, and if you want to be offered the opportunity to upgrade your account later, you've got to put some skin into it and show us that you really want to make that change."
"Our goal is to hone this and let them learn to take care of their account," continued Powell, noting that the most consumers are estimated to spend between nine and 12 months in the program before being offered the option of upgrading to a traditional account.
Despite the CU's affiliation with the university, Powell said that for now most of the consumers taking advantage of Rebound Checking are in the middle-age demographic. She said that she takes some pride in the fact that relatively few college-age students have come in for the program, since she has spent nine years teaching basic financial education at the university. She added that over the years fewer and fewer student applications for positions at the CU have been rejected due to credit issues, and none of the 30 student applications for a recent position were rejected because of that. "That's not from me; that's from everything they've been exposed to," said Powell. "But I like to think that I had a little part in it."
