EDMONTON, February 13, 2017 / CNW / – ATB Financial has entered into an innovative agreement that allows Cashco Financial customers to access safe and affordable banking products in a way that suits them. Under this agreement, Cashco customers can open transaction and savings accounts, use ATB ATMs, use ATB mobile applications and acquire short and medium term credit at a lower cost.
“When we really dug and listened to these customers and what they needed, we heard loud and clear that as an industry the problem was us,” said Dave mowat, President and CEO of ATB. “By our actions or inactions, we either said that these clients’ arrangements with their payday loan companies could never change, or that they had to come to us and buy a product with a fancy name, when what they were really saying was that the bank doesn’t really work for them. ”
“Today things are changing, we have listened and instead of asking them to come to us, we go to them.”
The arrangement with Cashco means that it will act as agent for ATB, taking advantage of the financial institution’s agency model already well established across the province. For the first time, Cashco customers will be able to open Cashco-branded ATB deposit and transaction accounts, overdraft protected and held by ATB, and not just take out loans. In addition, ATB will provide the necessary capital to enable Cashco to reduce interest rates and offer longer term flexible loans.
This arrangement between Cashco and ATB is a new way to serve customers who have not been well served by the traditional banking industry. Research indicates that 15 percent of working Albertans have limited access to regular banking services, overdrafts, short-term loans and conventional credit. According to the report The real cost of payday loans, the cost of living for low- and middle-income people has exceeded growth in employment income. As a result, some Albertans often do not qualify for traditional credit products.
“Until now, many of these clients have had no choice but to resort to payday loans. We are changing that. With this new approach, Cashco clients will have access to a wider range of banking services from – and that’s the point – a company like Cashco that understands them and speaks specifically to them, ”Mowat said.
Casho clients will also have access to ATB financial literacy resources.
“We are working to be very different from a bank, more like a store that goes back to communities where there is a lack of banking services,” said the CEO of Cashco Financial. Tim latimer. “To achieve this, we need to offer banking services that are meaningful to our customers for their real world, such as no monthly fees with direct deposits, no minimum balance requirements, no funds held on checks, no debit fees and payment programs. savings paired. In addition, all of our customers will benefit from overdraft protection. With the help of ATB, we are offering our clients relief for today and hope for tomorrow.
Since the end of January, when the Cashco-empowered-by-ATB offer was deployed to a group of Cashco customers in Edmonton, more than 200 families have registered.
“When you walk into a Cashco it feels like coming home, like they are there to help you,” said Desiree, a Cashco customer. “It’s an environment where I feel supported. It’s a complete change from what I’m used to.”
The arrangement is viewed as a positive step in increasing the financial inclusion of Albertans by Momentum, a Calgary-organization based on working with low-income people.
“Too many Albertans are essentially ‘underbanked’ – they lack access to traditional financial products and depend on marginal financial services like payday loans and check cashing,” said Jeff loomis, Executive Director of Momentum. “By working with Cashco and meeting customers where they are, ATB pursues an innovative approach to increasing access to safe and affordable financial products so Albertans can save money and achieve long-term financial stability.
About Financière ATB
With assets of $ 46.8 billion, ATB Financial is that of Alberta largest local financial institution. Created in 1938, ATB is made up of a network of 173 branches, 136 branches, a Customer Care Center and two Entrepreneur Centers. ATB’s 5,065 team members help more than 730,000 clients in 244 communities across Alberta.
ATB was named third best place to work Canada by Glassdoor and one of from Canada 100 Best Employers for Young People by Mediacorp.
Cashco is a leader in the Canadian alternative finance industry. Founded in 2007 and based in Edmonton, Alberta, Cashco offers a full range of financial services. This includes: chequing and savings accounts, small dollar loans, check cashing and money transfer services.
Cashco operates both online and through a network of 65 branches located throughout British Columbia, Alberta, Saskatchewan, and Ontario. The team of 200 members of Cashco helps to relieve today and hope tomorrow more than 50,000 customers.
- The report The real cost of payday loans says the marginal lending industry emerged and expanded as the cost of living for low and middle income people outpaced growth in employment income. Therefore, these people are often not eligible for traditional credit products. This has resulted in a two tier banking system, with those people looking for alternative financing options as banks and credit unions are not accessible. With limited options available, these people gravitate towards short-term relief solutions: payday lenders. The cost of this type of loan is substantial, often exceeding the annual percentage rate (APR) of 600%. For comparison, the APR for a credit card is around 20%, a department store card is 30%, and 6% for a car loan. The profitability of the industry depends on loyal customers; however, this repeated activity can prove detrimental to the client, perpetuating poverty and dependence on this service.
- While payday loans can be effective in meeting short term cash flow needs, they are not suitable for longer term use. The federal government reports that 52% of people using payday lenders used the service more than once a year, with 22% using the service monthly. Qualifying for a payday loan is relatively straightforward: applicants are required to present a personal check or direct deposit / debit information and employment verification. The maximum loan amount is $ 1,500 with an average around $ 400. Additional options for alternative financing include pawn shops and loan sharks.
- Cashco Financial is a private company, Albertapayday lending institution. The Cashco brand was created in 2014 with the amalgamation of four payday lenders. Differentiating itself from traditional payday competitors, Cashco offers a boutique, bank-like atmosphere in its stores and has set itself a goal of social return: “bring relief today and hope for tomorrow”. Their mission is “to be globally recognized as another type of bank by 2025”. Likewise, the ‘Cashco Cares’ brand promise illustrates the emphasis on social welfare. This strong corporate culture and these values make Cashco a unique alternative to payday lenders.
- Cashco recognizes that the majority of its customers have a long-term financial problem and, while needing immediate access to cash, have needs that are not adequately met by payday loans. As such, Cashco introduced flexible loans (these loans have a higher capital limit and offer installments over a longer period at a lower rate than payday loans and within the limits set by the penal code. federal). Providing the immediate relief that the customer needs, these loans are reportable so that they also help the customer to build or rebuild their flagship score and credit history towards a stronger financial future. Significant investments have been focused on solving the technological challenges associated with providing flexible loans. Cashco has secured advanced Fintech software and analytics to launch Cashco Flex loans online and offline. Without any intervention, it is expected that they will have a $ 8 million loan balance in flexible loans by the end of 2016. Additional capital is required to finance the proposed modifications and the conversion of existing payday loans to flexible loans and the resulting portfolio increase in the short and long term .
For more on the subject, please read: Fair financing: expanding short-term credit for the little dollars for Albertans
SOURCE ATB Financial
For further information: For more information or to arrange interviews, please contact: Barry Strader, Corporate Reporter, ATB Financial, 780-495-1343 (office), 780-886-4398 (mobile), [email protected]