Underbanked

Hispanic consumers and business owners are not saving and borrowing as much as bankers had hoped.

Several years ago Pennsylvania Rep. Dwight Evans championed an initiative to bring grocery stores to low-income neighborhoods across the state, and now he hopes to do the same with banks.

In a shift that makes its model comparable to the person-to-person transfer services widely available online, the mobile phone payment company Obopay Inc. is letting people send money to and from any bank account rather than requiring them to maintain a separate, prepaid account.

Payment Reporting Builds Credit Inc., which runs a repository of alternative credit information, and the National Credit Reporting Association have taken steps to preserve the use of nontraditional data to evaluate consumers with little or no traditional credit history.

The alternative credit bureau Pay Rent Build Credit Inc. is using information from the bill payment software company Billeo Inc. to establish credit scores for people with thin or no credit histories.

The remittance service Bank of New York Mellon Corp. developed for other banks to offer under their own brands is part of an effort to beef up such white-label offerings, particularly those involving small-dollar transactions.

With global financial markets wavering, Fed interest rates fluctuating, and the subprime mortgage fallout continuing, the health of the world's banks and financial markets dominated discussions at the World Economic Forum's annual meeting in Davos, Switzerland. This year's meeting focused on the concept of "collaborative innovation" and how it may be harnessed to better the everyday lives of people around the world.

Citigroup Inc.'s acquisition of a remittance outsourcer underscores the company's aspirations to expand its role as a global facilitator of transactions between financial institutions.

Checkspring Bank, a Bronx, N.Y., start-up that caters to underbanked consumers, is promoting an alternative to refund anticipation loans through a partnership with the financial education nonprofit Ariva Inc.

Western Union Co. said the difficulties in its U.S.-to-Mexico remittance business have recently been compounded by the housing market bust and a change in immigration patterns.

The Salt Lake City processor Galileo Systems Inc. says the combination prepaid debit and secured credit card it began marketing last year is so popular that it has outgrown its issuer, MetaBank.

The year is shaping up to be a tough one for bankers, but how will the subprime mortgage meltdown and the resulting downturn affect the way banks work with the underbanked?

Once again a hybrid community bank-money services business is operating in the Atlanta area using the name El Banco de Nuestra Communidad.

The continuing consolidation of the check-cashing industry could lead to changes to pricing, observers said, though they disagreed about which way fees would go.

MoneyGram International Inc., whose check processing business lost at least $860 million on subprime investments last year, said Tuesday that it plans to restructure the business.

Eight months after it was introduced, Wal-Mart Stores Inc.'s prepaid debit card appears to be making headway with the underbanked.

Despite the jitters felt in the market last week when the Internal Revenue Service said it was contemplating new restrictions on refund-anticipation loans, experts said the rule would not necessarily spell the end of such products.

Richard C. Breeden, the chairman of H&R Block Inc. who treated the company's thrift like an albatross when he campaigned for a seat on the board this past summer, appears to be softening his stance on the issue.

Euronet Worldwide Inc. says its proposed hostile takeover of MoneyGram International Inc. would create a remittance powerhouse, and some analysts concur.

Western Union Co. said Wednesday that it has introduced a service in nine developing countries that lets Web site publishers using a Google Inc. ad-placement program receive cash payment from advertisers.