Offering the CFR Prepaid Debit Card at VITA Sites. Megan Kiesel Campaign for Working Families November 2009

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1 Offering the CFR Prepaid Debit Card at VITA Sites Megan Kiesel Campaign for Working Families November 2009

2 Overview In the 2008 and 2009 tax seasons, we successfully offered prepaid debit cards and several savings products at VITA sites. The program relied heavily the partners involved and a strong product. Today we will discuss: Partner roles Implementation Outcomes Lessons Learned Plans for the future

3 Why Prepaid Debit? Increase direct deposit rate Among those without a bank account For those with a checking account who do not direct deposit Market it as a budgeting tool for families (mixed results Looking for ways to increase our value to customers Past initiatives, all with mixed results, include: financial education, credit counseling, bankers offering savings and checking accounts, access to public benefits

4 VITA Implementation Utilized cash coaches to promote the card at tax sites Cash Coaches sign people up for products and programs that meet customers needs including credit repair support, savings accounts, savings bonds and the prepaid debit card. Utilized an online interface to sign people up for cards Money Network 800 number was available to sites without a cash coach Provided temporary cards at the time of enrollment (STAR cards) Marketed the card to other agencies in our extensive partnership network

5 Outcomes Total Customers Prepaid Take up Rate 1199C % Careerlink NW % Ebenezer % Incarnation % MOCS % Mt. Pisgah % United Communities % Diversified % Impact % CL % TOTAL TS % TOTAL TS %

6 CFR s Mission As a non-profit organization we strive to: Research, develop, and promote low-cost consumer friendly financial products and services for LMI households. Build the capacity of community-based organizations to provide financial survival skills to their constituents. Establish best practice standards for other financial services providers.

7 An Agenda for a New Economy We are always voting with our dollars: Vendor due diligence is key Who is the parent company? Are they tied to any predatory products or practices? What is their reputation regarding disclosures and pricing transparency? How do their products perform? Are they investing in our community?

8 Why Debit Cards at a VITA Site? Direct Deposit is a gateway to asset-building A step toward increased financial security Faster, safer, more convenient than getting a check Avoids high check cashing fees Easier problem resolution BUT Clients may not have a method to receive a tax refund by Direct Deposit No bank account Problems with their bank account, e.g. garnishments, service issues OR Clients don t understand, don t trust, or think they don t want Direct Deposit Use Behavioral Economics present Direct Deposit as the norm or standard The CFR Prepaid Debit Cards provides An easy instant account set-up A financial management tool An opportunity for future work with financial coach.

9 Who is the CFR Debit Card For? The Un-Banked and Under-Banked: Who want fast access to their money through direct deposit Who may not qualify for a bank account (or credit card) Who are incurring too many fees with an existing bank account Who need a secure money management tool Who send money to family or friends Anyone who wants controlled spending and tight money management Track all transactions No interest, no late fees, no DEBT

10 A Consumer Friendly Prepaid Debit Card The CFR Card is a portable banking relationship: A reloadable prepaid Visa debit card A purchasing card A money transfer card A checking account And a financial management tool Card Conveniences: No credit or Chex System review to obtain Flexible ID requirements Deposit paychecks, tax refunds, payments, or cash to card Make purchases in person, online, mail-order, or by phone Pay bills with the card or Money Network checks

11 How The CFR Cards Work Load Cash Functions like a bank Visa ATM/Check Card w/o the Overdrafts Remittances Purchasing Add Value Direct Deposit: Payroll Tax Refunds Benefits Use Bill Payment Checks Cash Link to Savings

12 Money Transfer Options Bank Primary Card Primary Card ACH ACH (Looks like Bank to Transfer System) Instant Transfer Different Acct #s 12 Secondary Cards

13 Card Features Direct deposit Cash back with purchases Visa Bill pay ** builds credit file w/ PRBC Guaranteed Checks Text msg or balance alerts Money transfer: Card-to-card anywhere in the world Visa accepted FREE FREE FREE FREE FREE Money transfer: also available through Orlandi Valuta

14 Card Safeguards No risk of negative balance No overdraft, NSF, or penalty fees No fees for being inactive No retroactive fees No minimum balance requirement No cross-selling Plan and track expenditures through on-line account management

15 Writing Checks Write a Money Network check to pay bills where VISA not accepted, e.g. landlord. Call Customer Service for the check authorization code (This will freeze funds to cover the check) The recipient of the check can verify the guaranteed funds by calling customer service Additional checks can be ordered through Customer Service

16 Card Enrollment Clients can be enrolled at the VITA site One Form of Government ID Required: Social Security Number OR Gov t Issued ID (from any country), e.g. Driver s License, State ID, Passport, Immigration Card, Matricula Consular, Cedula Website Enrollment Client receives Instant STAR Card Account information available immediately to set-up direct deposit Star Card can be loaded and used where STAR cards honored (ATMs, stores) Permanent personalized VISA Card arrives in the mail in 7-10 business days Can be used anywhere VISA is accepted

17 Fees Account Opening Fee FREE Monthly Fee Primary/Secondary Card $1.00/$2.50 ATM Withdrawal US/Int l $1.50/$2.00 Surcharge free with Allpoint ATMs Signature and PIN Purchases FREE Cash back with Purchase FREE Direct Deposit Loading FREE Money Network Checks FREE Cash Loading Fee (varies) $ $4.50 Card-Card Money Transfer FREE ACH Transfers FREE Money Transfer via Orlandi Valuta $8.95 Flat fee for any amount

18 VITA Site Operations Use Posters, banners, brochures, signage at VITA site Greeters/ Coaches provide information on card product and its benefits, and answer questions Greeters/ Coaches can enroll interested clients in 5 minutes Tax preparer can pull direct deposit information from instant STAR Card packet for tax filing Refund on card in days if e-filed Permanent personalized VISA card received in 7-10 days. Balance automatically transferred from STAR card

19 CFR s Program Approach Detailed product and process training Card benefits and features Support systems: on-line enrollment, customer service tools Ongoing support for participating sites Brochures, literature, posters etc. Technical assistance Consumer Education tools to move clients toward asset building behaviors Collaborative Learning process with other VITA programs to exchange techniques and data to support structured evaluations

20 Next Steps If your organization is interested, Contact CFR: Lauren Leimbach, Executive Director