Currency exchange provides services for 'unbanked'

WILLMAR -- People who don't have bank checking or savings accounts know by "word of mouth'' they can have their employment checks cashed or money wired at alternative financial service providers such as Bennett Ventures Inc. of Willmar.

WILLMAR -- People who don't have bank checking or savings accounts know by "word of mouth'' they can have their employment checks cashed or money wired at alternative financial service providers such as Bennett Ventures Inc. of Willmar.

"We have a loyal base of customers that really like our personal service, our ease of access,'' says Chris Bennett, business co-owner. "You don't have to park and walk and wait in line for 10 or 15 people. It's generally fast and we have a person who is smiling. It's a very convenient and customer-friendly service.''

Russ Bennett, president of Bennett Office Technologies, says Bennett Ventures serves individuals known as the "unbanked'' -- those who have no relationship with a bank.

"That's primarily the market that we serve,'' he said. "The fact that there are so many people who don't know how to reconcile a checking account, and the banks have gotten so good at identifying those people, because if you have a checking account and it gets closed because you don't know how to run it, you get put on a list and you can't open another account.''

Estimates of the number of unbanked -- and the "underbanked'' (individuals who have accounts but use alternative financial service providers) -- range from 20 million according to The Federal Reserve Board to 22 million by the Minnesota Extension Service.


A June 2009 Fed study said the past two decades have seen a tremendous growth in the alternative financial services sector. The study said the sector plays a significant role in providing financial services to low- and moderate-income households.

Most unbanked families have less than a $25,000 annual income, according to a 2006 paper by Shirley Anderson-Porisch, a professor in the family resource management program at the University of Minnesota Extension Service in Marshall.

Anderson-Porisch said people are unbanked for a variety of reasons:

- Lack of understanding about banking and expectations for having a bank account.

- Past negative banking experience in the U.S. or in their homeland.

- Lack of appropriate identification or documentation needed to open a bank account.

- Unstable living situation.

- Cultural conflict including bank practices that vary with personal beliefs.


"I think maybe we've had some leveling off, but I would say we still have a pretty significant number in communities where there are populations who have not had that much experience managing their money with a banking system,'' said Anderson-Porisch.

Bennett Ventures, which also has an office in St. Cloud, started 10 years ago as a franchise of ACE Cash Express of Irving, Texas.

"We went to Texas and visited ACE,'' said Bennett. "With our migrant population, we thought there was a need here and there are a lot of these kinds of businesses across the country in towns our size that we didn't have one that would fulfill that need. I thought it was a good fit.''

ACE told Bennett that approximately 30 percent of the people in a city over 20,000 do not have a banking relationship.

Russ Bennett says approximately 60 percent of customers are white and 40 percent are non-white.

"I think some people assume that they're all nonwhite, which is not true,'' he said.

Bennett Ventures holds a currency exchange license from the Minnesota Department of Commerce. Another state-licensed currency exchange business in Willmar is Quick Funds, 222 Third St. S.W.

The license, among other things, specifies the service fees to be charged and requires a $10,000 surety bond. About 95 percent of the checks cashed are non-personal checks.


"They cash checks at our place,'' said Bennett. "There are other places if we didn't have this, like Cash Wise and Cub, but they put certain restrictions on dollar amount. Some liquor stores will do that. Those are unregulated. They don't get this license. If it's less than 1 percent of your business, you do not have to obtain a currency exchange license.''

Russ Bennett says the barrier to entering the business is quite high.

"Obviously, you need lots of cash and the bonds and the insurance,'' he said. "It's not an inexpensive business to get into.''

About a year ago, the company went independent. The company was formerly located at the Kandi Mall and is now located at Bennett Office Technologies.

Customers entering the office at 312 24th Ave. S.W. will find store manager Dave Nurmi. He stands behind a security door and an inch-and-a-quarter-thick bullet-proof glass wall.

"We're concerned about not only Dave's safety but also the customer's safety that we try and intimidate people enough to where they just don't try,'' says Chris Bennett.

The customer slides the check under the glass and tells Nurmi if the check should be cashed or if the check should be used to pay bills or buy a money order or buy a cash card. Check-cashing fees are posted on a large board against an inside wall.

Nurmi enters the customer's information into the computer. He scans the check, keeps a copy with the number of the bank account and routing information, and gives the cash, money order or card to the customer.


Nurmi has worked for Bennett for nine years. He enjoys his customers and is always looking for new customers. The goal, he said, is to get to know people on a first-name basis.

"It's important in business to know your customers,'' Nurmi said. "But you can't let someone try to pull a fast one on you. We try to be as friendly as we possibly can with the customers because ultimately it builds on the friendship and creates more customers coming through the door.''

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