Market Trends: Opportunities In the "Unbanked" Consumer Market

• Income and Cost
• Table1-6 Reasons for Not Having a Checking Account
• Table 1-7 Reasons for Not Having a Savings Account
• ‘Don’t Like Dealing With Banks’
• Table 1-8 Reasons for Not Having a Checking Account: “Hard” and “Soft” Barriers
• Bad Credit Has an Impact
• Table 1-9 Reasons for Not Having a Savings Account: “Hard” and “Soft” Barriers
• Cultural, Language Issues Less Significant
• Location Not An Issue, Although Convenience Is
• Table 1-10 Reasons for Not Having a Checking Account: Convenience and Location
• Table 1-11 Reasons for Not Having a Savings Account: Convenience and Location
• Complexity and Motivation
• Table 1-12 Reasons for Not Having a Checking Account: Complexity and Motivation
• Table 1-13 Reasons for Not Having a Savings Account: Motivation and Complexity
• Consumer Knowledge and Sophistication
• Unbanked Consumers May Overestimate Barriers
• Unbanked May Choose to Be That Way
• Table 1-14 Reasons for Cashing Checks at Banks and CCOs
• Table 1-15 Why Do You Prefer Cashing Checks at a CCO Rather Than Bank?
• Checks May Not Be Widely Accepted
• Table 1-16 How Do You Pay Your Rent?
• Table 1-17 How Do You Pay Your Rent?
• Does your landlord take checks for rent payment?
• Table 1-18 Why Do You Buy A Money Order (If you have a checking account)?
• Table 1-19 Of the friends and family members closest to you, how many do you think have checking accounts?
• Many Unbanked Formerly Banked
• Table 1-20 If Unbanked: Have You Ever Had:
• Table 1-21 If Yes: Why Did You Close Your Most Recent Bank Account?
• Unbanked Consumers Still Have Relationships with Banks
• Ties to “Fringe” Financial Sector
• Table 1-22 Use of Fringe and Mainstream Financial Institutions by Banked and Unbanked Households
• Opportunities for Banks in the Low-Middle Income Marketplace
• Banks Seeking to Expand in LMI Market Face Challenge

• Total Buying Power Statistics
• Buying Power Statistics by Race
• Table 1-23 U.S. Buying Power by Race: 1990, 2000, 2003, 2008
• Table 1-24 Percentage Change in Buying Power by Race: 1990-2003, 1990-2008, 2000-2003, and 2003-2008
• Table 1-25 Market Share of Buying Power by Race: 1990, 2000, 2003, 2008
• African American Buying Power
• Hispanic Buying Power
• Table 1-25 Hispanic Buying Power: 1990, 2000, 2003, and 2008
• Table 1-26 Percentage Change in Hispanic Buying Power: 1990-2003, 1990-2008, 2000-2003, and 2003-2008
• Table 1-27 Market Share of Hispanic Buying Power: 1990, 2000, 2003, and 2008
• Table 1-28 U.S. Population Statistics by Race: Population: 1990, 2000, 2003, 2008
• Table 1-29 Percentage Change in U.S. Population: 1990-2003, 1990-2008, 2000-2003, and 2003-2008
• Table 1-30 Share of Population by Race: 1990, 2000, 2003, 2008
• Table 1-31 Hispanic Population: 1990, 2000, 2003, and 2008
• Table 1-32 Percentage Change in Population: Hispanic vs. Non-Hispanic 1990-2003, 1990-2008, 2000-2003, and 2003-2008
• Table 1-33 Share of Hispanic Population
• Table 1-34 2003 Top Hispanic Consumer Markets by State
• Table 1-35 % Change in Hispanic Buying Power by State: 1990 - 2003
• Table 1-36 2003 Hispanic Share of Total Buying Power by State

Chapter 2 The Check Cashing and PayDay Lending Industry

• Industry Overview
• Additional Benefits of Check Cashing and Payday Lending
• Size of the Market
• Role of Trade Associations
• FiSCA
• Community Financial Services Association of America
• Best Practices
• Association and Company Customer Demographic Profiles
  • FiSCA Customer Demographics
  • Ace Cash Express Customer Demographics
  • Dollar Financial Check Cashing Customer Demographics
  • Dollar Financial U.S. Payday Loan Customer Demographics
  • Table 2-1 Advance America Customer Demographics (1)
  • Check Cashing
  • Some Choose Check Cashers Over Traditional Banks
  • Table 2-2 Types of Financial Services Obtained from Currency Exchanges: Unbanked Consumers, by Race/Ethnicity1
  • Table 2-3 Types of Financial Services Obtained from Currency Exchanges: Banked Consumers, by Race/Ethnicity1
  • Not Everyone Wants a Checking Account
  • Table 2-4 Reasons for Not Having a Checking Account1
  • Payday Lending
  • Payday Lending Taking the Heat
  • Debt Trap Problem
  • Check Cashing and Payday Loan Players
  
  
• Ace Cash Express, Inc.
  • Table 2-5 Ace Cash Express: Revenue by Service Offering: 2002-2004
  • Check Cashing
  • Payday Loans
  • Bill Payments
  • Prepaid Debit
  • Money Transfers
  • Money Orders
  • Self-Service Machines
  • Other Services
  • Table 2-6 Ace Cash Express: Operating and Check Cashing Data: 2000-2004
  
  
• Dollar Financial Group, Inc.
  • United States Operations
  • Check Cashing
  • Table 2-7 Dollar Financial: Check Cashing Revenue: 2000-2004
  • Payday Lending
  • Other Services and Products
  
  
• Advance America, Cash Advance Centers, Inc.
  • Table 2-7 Advance America Data Metrics: 2003 - 2004
  • Table 2-8 Advance America Revenue by Segment: 2002-2004*
  
  
• Check Into Cash, Inc
• Cash America International Inc.
  • Cash Advance Activities
  • Table 2-9 Cash America International Cash Advance Data: 2002-2004
  • Check Cashing Activities Table 2-10 Cash America International Revenue: 2002-2004
  • EZCORP
  • Payday Loans
  • Table 2-11 EZCORP Revenues by Segment: % Increase: 2002-2004
  • Table 2-12 EZCORP Revenue by Segment: 2002-2004
  
  
• First Cash Financial Services Inc
  • Table 2-13 First Cash Financial Services Revenue: 2002-2004

Chapter 3 The Latin America-United States Remittance Market

• A Huge and Growing Market
• 45% of Latin American Remittances Go to Mexico
• Remittance Transmission Frequency Increases as Costs Decrease
• Latin American Remittance Senders Five Times More Likely to be Unbanked
• Remittance Study Findings
• Cost of Remittances Decrease as Volume Rises
• Increased Competition Fuels New Remittance Product Offerings
• Banks and Credit Unions Do Not Offer Significant Price Advantage
• Bank Share of Remittance Market Lags
• Marketing Campaigns Show Signs of Success
• Immigrant Banking Products Increase
• Transfer Mechanisms
• Table 3-1 Remittance Mechanisms: Share of Transfer U.S. to Latin American and the Caribbean
• Competition: Mature, Consolidating, and Underdeveloped Markets
• No Mature Markets in Latin America Exist Yet
• Table 3-2 Remittances to Mexico: Volume and Costs
• Mexico: A Consolidating $14 Billion Market
• Who Controls the Mexican Remittance Market?
• Other Consolidating Markets
• Underdeveloped Markets
• Transaction Costs and Changes over Time
• Banks and Remittances
• Higher % of Hispanic Remittance Senders Do Not Have Bank Accounts than Others
• Table 3-3 U.S. Immigrant Remittance Senders with Bank Accounts by Country of Origin
• Banks and Credit Unions and the Remittance Transfer Industry
• Table 3-4 Type of Institution Offering Remittances
• Table 3-5 Percent of Banks Offering Remittance-Related Services
• Table 3-6 Charges Made by Banks and Credit Unions to Transfer Remittances to Mexico (by method used)
• Offering More than One Remittance Product Provides Competitive Advantage
• Table 3-7 Available Types of Transfer Operations
• U.S. Remittance Industry Players
• First Data Corporation
  • Payment Services
  • Table 3-9 First Data Consumer-to-Consumer and Consumer-to-Business Revenue: % of Payment Services Revenue: 2002-2004
  • Western Union Consumer-to-Consumer Business
  • Consumer-to-Consumer
  • Table 3-10 Western Union Consumer-to-Consumer Money Transfer Growth: 2002-2004
  • Consumer-to-Consumer—International
  • Table 3-11 Western Union International Consumer-to-Consumer Money Transfer Business: 2002-2004
  • Consumer-to-consumer—Domestic (including Canada)
  • Table 3-12 Western Union Domestic Consumer-to-Consumer Money Transfer Business: 2002-2004
  • Consumer-to-Consumer—Mexico (Western Union and Orlandi Valuta services)
  • Table 3-13 Mexico: Western Union and Orlandi Valuta Consumer-to-Consumer Money Transfer Business: 2002-2004
  • Vigo Acquisition
  
  
• MoneyGram International Inc.
  • Global Funds Transfer Segment
  • MoneyGram Money Transfers
  • Money Orders
  • Bill Payment Services
  • PrePaid Debit Option
  • Table 3-14 Money Gram Segment Information: 2002-2004
  • Table 3-15 MoneyGram Global Funds Transfer Segment
  
  
• Global Payments Inc.
  • Table 3-16 Global Payments Revenue: 2003 to 2004
  • Quarterly Comparison
  • Money Transfer Offering
  • Dolex Purchase
  • Consumer-To-Consumer Money Transfer
  • Table 3-17 Global Payments Revenue: 2002-2004

Chapter 4 Unbanked Products and Services Trends

• The Private Sector is Listening
• Product Strategy Advice for the Hispanic Market
• A Realistic Approach
• Start Slowly
• Unbanked Product and Services Trends
• ATM and Direct Deposit
  • ATMs Deployed to Extend Reach
  • ATMs Penetrate Rural Unbanked Areas
  • Cross Border ATM Use
  • ATM Cash Acceptance Option
  • Direct Deposit
  • Stored Value Cards
  • The “Checkless Checking Account”: A Case Study
  • An Early Experiment: Reporting of “Accounts in Good Standing”
  • A Savings Vehicle Marketed as Overdraft Protection
  • Payroll Cards
  • U.S. Bank offers the Visa AccelaPay card
  • Key Bank Checkless Account
  • Card-Based Remittance Options
  • Visa Giro
  • The Bank America SafeSend Account
  • The Citibank Access Account
  • Citigroup’s Bi-National Credit Card
  
  
• Remittance Offerings Proliferate
  • Remittance Services Offered by Banks
  • Harris Bank
  • BB&T
  • U.S. Bank Begins Offering MoneyGram Transfers
  • Wells Fargo Expands Wire-Transfer Outlets
  • Bank of America Eliminates Remittance Fees Tied to
  • Checking Accounts
  • Bank Remittance Marketing Tools
  • Bank of America
  • Harris Bank
  • U.S. Bank
  • Wells Fargo
  • Banks Still Having Difficulty Penetrating Market
  
  
• Remittance Services Offered by Credit Unions
  • Vigo Remittance Services
  • Credit Union Remittance Marketing Tools
  • Citibank "Checking Plus"
  • Special Savings Accounts
  • The Bank of America Nuevo Futuro Account
  • Savings/CD to Collateralize Small Loan to Build Credit
  • Individual Development Accounts
  • Frost Bank and the City of San Antonio IDA
  • Fee Waivers
  • Free Tax Counseling Services
  • Initial Deposits
  • Bundled Services from Wells Fargo
  
  
• ITIN and Matricula Consular Identification Acceptance
• New Check Casher and Payday Lender Products
  • Payday Lender Savings Accounts
  • FiSCA and NetSpend Introduce “All-Access” Debit-Based Savings Account
  • Prepaid Debit Options Proliferate
  • Internet Options
  
  
• Retail Sector Enters Unbanked Space
  • Safeway Begins Cashing Tax Refund Checks
  • Wal-Mart Expands Capabilities to Reach Unbanked
  • Wal-Mart and Certegy Expand Check-Cashing Deal
  • MoneyGram Extends Pact with Wal-Mart.
  • More Retail Check Cashing to Come
  • Green Dot Retail Prepaid Debit Catches On
  • New Payday Debit Option: Purpose Advantage Card
  • Retail Kiosks
  • 7-Eleven is Kiosk Happy
  • CashWorks Payroll Cashing Partnership Formed in 2004
  • H&R Block to Provide Refund Anticipation Check Cashing
  • Kiosks at 7-Elevens
  • Cashworks Provides Its Own Payroll Cashing Kiosks
  • Fastrip Cashes In
  • eFunds ”Get Checking” Education/Account Combination
  • How It Works
  
  
• Other Trends
  • Leapfrogging to Wireless Technology
  • Credit Reports That Reflect Unbanked Activity
  
  
• Financial Education for the Unbanked
  • Financial Education Can Foster Positive Changes in
  • Financial Behavior
  • Financial Education Initiatives
  • The FDIC's Money Smart Program
  • The 10 Money Smart Training Modules

Chapter 5 Recent Regulations and Pending Legislation Affecting the Unbanked

• Patriot Act Section 326 and the Matricula Consular ID Card
• Attempt to Limit Matricula Card Use Defeated
• Revised FDIC Payday Lending Guidance
• Highlights of the FDIC Guidance
• Pending Federal Legislation Affecting the
• Unbanked Market
  • H.R. 200, the Prevention of Predatory Lending Through
  • Education Act
  • H.R. 773, the 21st Century Access to Banking Act
  • H.R. 1295, the Responsible Lending Act
  • H.R. 200, the Prevention of Predatory Lending Through Education Act
  • H.R. 1643
  • H.R. 1660
  • Table 5-1 2003 Enacted Payday Lending Legislation
  • Table 5-2 2004 Enacted Payday Lending Legislation
  • Table 5-2 2004 Enacted Payday Lending Legislation
  • Table 5-3 2005 Enacted Payday Lending Legislation