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ATB opens up new financial health option for underserved Albertans

Posted on: February 13, 2017

Edmonton — ATB Financial has struck an innovative arrangement that allows customers of Cashco Financial to access safe and affordable banking products in a way that works for them. Under this arrangement, Cashco customers can open transaction and savings accounts, make use of ATB ABMs, use the ATB Mobile Apps and acquire lower cost short and medium term credit.

“When we really dug in and listened to these customers and what they need, we heard loud and clear that, as an industry, the problem has been us,” said Dave Mowat, ATB President & CEO. “By our actions or inactions we’ve either said these customers’ arrangements with their payday loan companies could never change, or that they had to come to us and buy some product with a fancy name, when really what they were saying is that banking doesn’t really work for them.”

“Today, things are changing, we’ve listened and instead of asking them to come to us, we’re going to them.”

The agreement with Cashco means it will act as an 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, overdraft-protected ATB deposit and transaction accounts held by ATB—and not simply take out loans. As well, ATB will provide the necessary capital to allow Cashco to reduce interest rates and provide longer-term flex loans.

This arrangement between Cashco and ATB is a new way of serving customers who have not been well served by the traditional banking industry. Research indicates that 15 per cent 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 Lending, the cost of living for lower and middle income earners has outpaced employment income growth. As a result, some Albertans often do not qualify for traditional credit products.

“Until now, many of these customers had no choice but to rely on payday loans. We’re changing that. With this new approach, Cashco customers will have access to a wider range of banking services from—and this is the important point—a company like Cashco that understands them and caters specifically to them,” said Mowat.

Casho customers will also have access to ATB resources on financial literacy.

“We are working to be very different than a bank, more like a boutique that goes back into the communities where there is a lack of banking services,” said Cashco Financial CEO Tim Latimer. “To achieve that, we need to offer meaningful banking for our clients for their real world, like no monthly fees with direct deposits, no minimum balance requirements, no funds held on cheques, no debit fees and matched savings programs. Plus, all of our customers will get overdraft protection. With ATB’s help, we’re offering our customers relief for today and hope for tomorrow.”

Since late January, when the Cashco-empowered-by-ATB offer was rolled out to a group of Cashco customers in Edmonton, more than 200 families have signed up.

"When you walk into a Cashco, it's feels like you're coming home, like they are there to help you,” said Cashco customer Desiree. “It's an environment where I feel supported. It's a complete change from what I'm used to."

The arrangement is considered a positive step to increase the financial inclusion of Albertans by Momentum, a Calgary-based organization dedicated to working with people living on low-incomes.

“Too many Albertans are essentially ‘underbanked’ – they are not accessing mainstream financial products and are reliant on fringe financial services like payday loans and cheque cashing,” said Jeff Loomis, Momentum’s Executive Director. “By working with Cashco and meeting customers where they are at, ATB is pursuing an innovative approach to increase access to safe and affordable financial products so that Albertans can build savings and achieve longer-term financial stability.”

For more information or to arrange interviews, please contact:

Barry Strader, Corporate Reporter, ATB Financial

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