Financial institutions from opposite ends of the spectrum are joining together to fill a consumer void in a Southwest Baltimore neighborhood abandoned by banks.
A credit union - a mainstream financial institution known for membership requirements - will open a joint office next month with a check-cashing operation, which can charge up to a 10 percent fee for cashing a check. The hybrid financial institution, to be called Our Money Place, will open in the Westside Shopping Center on Frederick Avenue in Mill Hill.
Organizers are promoting the partnership between the 65- year-old SSA Baltimore Federal Credit Union and A&B; Check Cashing as the first of its kind in the region.
"They're not our ally," said credit union Chief Executive Officer Jack K. Houseknecht, "but we're going to work with them."
Officials of the Woodlawn-based credit union, which traditionally has served government employees, hope the joint office will help launch a growth spurt. The federal government recently approved an expansion of the credit union's charter that substantially eases membership requirements. As a result, just about everyone in the city is eligible to join SSA Baltimore, and several low-income neighborhoods will have an established financial institution for the first time in years.
Although only the Westside Shopping Center credit union location is slated to be paired with a check-cashing shop, during the next nine months SSA Baltimore plans to open part-time offices in Northwest Baltimore, East Baltimore, downtown and another in Southwest Baltimore. They will be open up to 30 hours a week.
The area around Westside Shopping Center is much like other areas in the city that are underserved by banks. Local branches closed years ago and are unlikely to return.
The last bank near the Westside Shopping Center, a First Union branch, pulled out five years ago, according to Operation Reachout Southwest, a community group.
"People do not want to drive all over the city to get their banking needs met," said Joyce Smith, the group's president. "You have homeowners who want to refinance, people who want to buy a car. You can't get those kinds of services at a check-cashing office."
Seeking neighborhood stability, Operation Reachout Southwest officials started looking for a bank. For nine months, all they heard was "no."
Enter the SSA Baltimore Federal Credit Union. But a credit union wasn't quite enough, community leaders said. In pairing the credit union with the check-cashing operation, they cobbled together the services offered by departed bank branches. At Our Money Place, all the financial services will be in one office, once occupied by a bank.
Institution's offerings
The credit union will offer loans, ATM cards, financial advising, checking and savings. Checking will be $2.50 a month unless a customer meets one of several qualifications - then it will be free. Community leaders will offer financial literacy training.
Customers will pay $6 to join the credit union, and checking accounts will require a $50 opening deposit but no minimum balance, Houseknecht said.
The credit union won't deal in cash and that's where the check-cashing operation comes in. A&B; will handle services such as check-cashing at a reduced rate, issuing money orders at no charge and accepting utility bill payments.
"Check cashing is what we're trying to get these people away from," said credit union spokesman Kevin Roland, "but the reality is you can't change behavior overnight."
For the credit union, the Southwest Baltimore office is an opportunity to attract customers. For A&B; Check Cashing, it's a chance to do more business and a rare opportunity to attain more credibility.
"In the past, we've always been referred to as fringe banking," said Brian Satisky, who owns A&B;'s 17 locations in the Baltimore area.
A welcome service
For someone like Frances Smith, the office would be a chance to stop traipsing all over the city to do banking.
Smith is typical of many who frequent A&B; shops. A longtime customer of A&B;'s Howard Street shop, the 71-year-old retiree belongs to a credit union and a bank, but they charge for money orders and checking accounts. So she came to A&B;'s Howard Street shop Monday afternoon for five money orders - one each for mortgage, gas and electric, and water bills and two for insurance payments.
"You don't have to pay for them here," she said.
SSA Baltimore Federal Credit Union started as a financial institution for Baltimore-area Social Security Administration employees, retirees and their families.
It expanded to include about 100 small businesses but during the 1980s, computers started replacing federal government employees. The credit union's potential customer base shrank. It has 42,000 customers but could handle 100,000, Houseknecht said.
"There's some point where we realized that as wonderful a relationship as we have with Social Security and [Center for Medicare and Medicaid Services]," Houseknecht said, "if we want to continue to be healthy and grow, we're going to have to do something else."
It applied in April to the National Credit Union Administration for a charter expansion and was approved.
Those interested in information about eligibility can call 410-965-8908 or 800-772-2328.
Under the new requirements, a prospective member must live, work or worship in an area of the city where 20 percent of the population lives in poverty, based on federal figures. Credit union officials said about 90 percent of city residents will qualify, as well as commuters who work in most city offices.
And so will Frances Smith.