Wednesday, November 12, 2008

Great Olbermann Comment on "Pro Marriage" Amendments

WOW. Amazingly great Special Comment by Keith Olbermann on "protecting marriage" amendments. (Focus on Proposition 8 in California, but it's just as applicable for Florida's Constitutional Amendment #2 that passed last week.) 

If only Keith had made this comment BEFORE the election! But bravo to him for pointing out the hypocrisy of the marriage amendments nonetheless!

Check Cashers Redeemed

Great article in the New York Times Magazine this past Sunday on check cashing businesses and how American banks have ignored the needs of the poor - as well as ignored the huge financial opportunities in serving that market! 

As I've pointed out in every class, there's something to be said for serving the world's poor, profitably. (The title, in fact, of C.K. Prahalad's Harvard Business Review article.) The amount of money charged by check cashing businesses is huge, but, as the article points out, the lack of "traditional banking" services in poor areas suggests that check cashing businesses are actually making many customers better off than if the check cashing businesses didn't exist at all. However, the fact of the matter remains that the gap between what traditional banks could do to serve the poor (at a profit) and what check cashing businesses provide (and charge, for a huge profit), suggests an enormous opportunity for banks - such as Bank of America - to serve this market with tailored solutions that are profitable and grow long-term customers. To that point, it's interesting to read some customer quotes about how loyal check cashing customers actually are, because all the traditional banks had ignored them or charged them exorbitant fees when something went wrong. 

The most inspiring part of the story was that of Tom Nix - of Nix check-cashing. He sold his business to a credit union, which kept him on as president and - together - they added a credit union window at every check cashing location. Tom's goal is to convert traditional check-cashing customers to credit union customers over time - because the business could still make a lot of money serving these customers and the customers would be better off working with the credit union side of the business!! Fantastic!

In addition to explaining the check-cashing business, payday loans, the customers who use such services and the creation and on-going transformation of Nix - the story also provides some insights into how local governments are trying to create similar models for serving their poor with higher value banking services at a lower cost than the check-cashing and payday loan services. Overall, a very, very good article!