A Virginia start-up is reaching out to the unbanked through a new agreement with an Atlanta technology firm.

Cardinal Bank in Fairfax, Va., has a deal to set up savings, checking, and transfer accounts for customers of Directo Inc., a start-up technology firm that issues debit cards to consumers without bank accounts. The bank is a subsidiary of Cardinal Financial Corp., a $58 million-asset company formed last June.

Directo's technology enables employers - mainly farms and factories - to issue debit cards instead of paychecks to employees.

Cards would be loaded with the amount of an employee's pay. The funds would automatically be deposited in Cardinal accounts and could be withdrawn by employees from automated teller machines or point of sale terminals.

The service, slated for rollout this fall, will primarily target the Hispanic population.

L. Burwell Gunn, president and chief executive officer of Cardinal, said it hopes the agreement becomes a valuable source of fees, which the bank would collect on each transaction. Cardinal also plans to reinvest the deposits in loans and other investments.

"It's an untried project so it is difficult to project what kind of volume (fees and deposits) we will see," Mr. Gunn said. "But we think the idea has appeal."

The bank will incur no additional start-up costs from the agreement, Mr. Gunn added.

Cary Morris, a bank analyst at Scott & Stringfellow, said the agreement "really has no downside risk" for Cardinal and would be a source of low- cost deposits.

It is unclear whether Cardinal will be the exclusive bank of Directo, which was formed last fall. Lewis Massey, president and CEO of Directo, said that regulators may want the company to use more than one bank.

Users will pay Directo a monthly fee of $5 to $8. Customers will also be able to open a transfer account so that family members in their native countries can tap the funds with separately issued debit cards. It will cost $5 per transaction to transfer funds into that account.

Directo also plans to set up a 24-hour, seven-day-a-week bi-lingual call center.

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