Announces Pilot with CDCUs to Test Self-Service Kiosks for Unbanked

(March 5, 2008 – Montvale, NJ)  The $374 million-in-assets Paragon FCU (Montvale, NJ), which recently joined the Federation as a Community Development Partner, has announced that its CUSO, Tellagent, LLC, is planning to partner with the Lower East Side People’s FCU (New York, NY), New York City’s largest community development credit union (CDCU), in a new pilot project to test self-service kiosks in communities with high numbers of underserved and unbanked consumers.

The new self-service kiosks have been designed to meet the financial needs of unbanked consumers, by providing automated transactional services, such as check cashing, bill pay, and remittances, enabling credit unions to provide these services at much lower costs. 

“We are pleased to formalize a relationship with the Federation and the community development credit union community. We are excited about working with the Lower East Side People’s FCU and other CDCUs in this extraordinary project,” said Richard Rays, CEO of Paragon FCU.  “Our kiosks are the epitome of convenience and functionality. Over time, as acceptance of electronic kiosks becomes the normal fabric in the commerce of the unbanked, this unit could revolutionize the way financial transactions are offered and delivered to the unbanked…and to the general public for that matter,” he added.

In the initial pilot phase, Tellagent, LLC will be deploying kiosks in a number of CDCUs in New York City.  The Lower East Side People’s FCU will be the first one to participate.

 “As a community development credit union, we’ve been serving low-income consumers since our inception in 1986,” said Aissatou Barry-Fall, CFO of LESPFCU.  “And although we are in the financial center of the world, there are many people in our community who are unbanked.  In fact, nearly a third of all new accounts are opened by individuals with limited or no experience with financial institutions,” she added.
 
We look forward to participating in this project as it will give us an opportunity to test this new technology and provide valuable feedback to make these kiosks more responsive to the needs of low-income consumers,” she concluded.

Partnerships a Key to Success

Started in 2003, the Federation’s Community Development Partners program seeks to engage a broader spectrum of credit unions in the work of CDCUs, credit unions that specialize in providing affordable and quality credit union services to underserved low-income consumers.  The program does this by promoting partnerships between larger credit unions and CDCUs to develop collaborative and sustainable solutions to the challenges and the opportunities presented by undeserved communities. 46 credit unions currently participate in this program, among them some of the largest in the country. 

“Larger, ‘traditional’ credit unions bring substantial resources and technical expertise in the delivery of financial services,” explained Pablo DeFilippi, Director of Membership Services at the Federation.  “CDCUs bring their mission-driven focus and vast experience in serving underserved markets, which makes them ideal partners for larger credit unions looking to do more in low-income communities.

“This new program between Paragon FCU and the Lower East Side People’s FCU is exactly the type of collaboration that our Community Development Partner Program seeks to promote,” said DeFilippi.  “This is a great example of how to leverage expertise across the credit union spectrum and demonstrate the power that lies in the diversity of our credit union system,” concluded DeFilippi.

For more information about Community Development Partner membership, contact Pablo DeFilippi, Associate Director for Membership Development, at pablo@cdcu.coop, or (800) 437-8711, x 304.

To view a full list of the Federation’s Community Development Partners, click here.

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Paragon Federal Credit Union has over 56,000 members and assets of $380 million. Paragon Federal is a not-for-profit financial cooperative, which returns earnings back to its members in the form of higher dividend rates on savings and investment accounts, lower interest rates on loans, and reduced or no-fee products and services. For more information, visit www.paragonfcu.org.

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Tellagent, LLC, a CUSO of Paragon Federal Credit Union, was formed in 2000 in order to explore and develop new and innovative products and services for credit unions to compete with other financial institutions. For more information, visit www.tellagent.com.