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2nd Chance Checking – United Consumers

Credit Union :United Consumers
Assets :$1,359,000,000
Address :2326 S. Savage Street | Independence, MO 64055
Start Date :2008

Check Cashing Qualifications :

  • Members with a ChexSystems record (other than fraud) that don’t qualify for the credit union’s regular checking account
  • Cannot have caused the credit union a loss
  • Direct deposit is required if available through employer

Rates, Fees, and Terms :

  • $10 per month service fee
  • After 12 months in good standing, member may request that account be reviewed and changed to a regular checking account
  • No overdraft protection or debit card
  • Maximum holds on all checks (other than payroll checks or other guaranteed fund checks)

Vendors/Systems Used :

No special system or technology needed.

Target Market :

  • Those members who don’t qualify for UCCU’s regular checking

Marketing Strategy :

Financial Service Reps (FSRs) tell members about the 2nd Chance Checking program if they don’t qualify for a regular checking account.

The credit union also markets its 2nd Chance product on its website under checking options in the following manner:

Second Chance Checking

Our Second Chance Checking Account can help you establish a successful banking relationship regardless of past credit problems. Instead of paying payday lenders or check-cashing companies an average of 400% interest (the industry average), you pay just $10 per month for unlimited check writing. After 12 months of successfully managing your Second Chance Checking Account, you can request that your status be reviewed and switched over to a regular checking account. That can save you even more money, and open the door to a variety of other credit union services and benefits.

Individuals with a record of fraud on the Chex System report and those who have caused a loss at UCCU are not eligible. Direct Deposit of your paycheck is required if offered by your employer. Maximum holds as allowed by law will be placed on all checks (other than verifiable payroll checks or other guaranteed fund checks). Debit/ATM Card and Courtesy Pay do not apply. Other terms and conditions will be disclosed at the time you open the account.

Program Results/Statistics :

Results as of November 2009:
  • 150 2nd Chance Accounts with balances of $72,000 (average of $480)
  • 50 have converted to regular checking
  • Generate revenue of $18,000 per year
  • No real losses (only NSF fees that were reversed)

Member Benefits :

  • Help members by giving them a second chance in establishing a successful banking experience
  • Build a loyal and long-term relationship
  • Save members money

Additional Information :

The purpose of the program was to help individuals achieve financial independence who were previously denied checking accounts because of a detrimental checking or credit record. We have been able to put almost 200 members into a checking account that they previously would have been denied. We generate enough revenue from the program to pay for the costs of monitoring accounts for fraud or mismanagement. Many of these 2nd Chance accounts successfully move into our regular checking program after 12 months in good standing.

Additional Information :

Our Second Chance Checking Account can help you establish a successful banking relationship regardless of past credit problems. Instead of paying payday lenders or check-cashing companies an average of 400% interest (the industry average), you pay just $10 per month for unlimited check writing. After 12 months of successfully managing your Second Chance Checking Account, you can request that your status be reviewed and switched over to a regular checking account. That can save you even more money, and open the door to a variety of other credit union services and benefits.