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Portsmouth-based Service Credit Union has joined with three other credit unions to support an affordable, digital-only platform to serve the estimated 50 million Americans mostly ignored or under-served by traditional banking and financial institutions.
Bank Dora Financial officially launched in late September. Dora — named after Dora Maxwell, a pioneer in the credit union industry who helped charter hundreds of credit unions in the Northeast — is a cooperative, nonprofit institution designed to return profits into free services for its customers. It offers an all-digital checking account with no fees, no minimum balances, a debit card with access to more than 30,000 surcharge-free ATMs across the country, two-day early direct deposit and full bilingual (Spanish) service.
“We understand that financial service isn’t one-size-fits-all. We are excited, through Dora, that we will be able to extend our impact in order to provide a trusted financial partner for people in our community who need it the most,” said David Araujo, Service Credit Union’s president and CEO.
Service Credit Union, with $5 billion in assets, is the largest of the four founding members in the cooperative. The others are Affinity Plus Federal Credit Union ($3.5 billion in assets) headquartered in St. Paul, Minn.; Digital Federal Credit Union ($9.8 million in assets) in Marlborough, Mass.; and USALLIANCE Financial ($2 billion in assets) in Rye, N.Y.
A recent study by the Global Industry Analysts estimated that the fast-growing digital banking sector will top $30.1 billion by 2026. (It was at $4.3 billion in 2021.) But the significant unbanked and underbanked population in the country is mostly ignored by for-profit “neobanks” because they aren’t profitable.
“We want to change how people think about access to affordable and fair financial services,” said Kristi Kenworthy, Bank Dora’s managing director. “Their balances are lower on average, and creditworthiness may take time to achieve.
The credit union movement is really made for offering products at scale that are safe and affordable for them.”
Geoff Gilton, senior vice president for technology at Service Credit Union, first heard about the early Dora concept at an industry conference in January 2020 and was immediately intrigued by the opportunities to reach an under-served market. He said that Service Credit Union — which was founded in 1957 and serves more than 321,000 members in New Hampshire, Massachusetts, North Dakota and military bases in Germany — has made community involvement a top priority. One of those concerns regularly heard focused on financial inclusion for low- to moderate-income individuals.
“We’ve talked with different organizations in New Hampshire about the need for a checking account product for rural and lower-income communities,” Gilton said. “We became a founding partner, because Dora can be a tremendous product and service for this market.”
A potential customer does not have to be a credit union member to sign up for the Bank Dora mobile app via iOS App store or Google Play. Gilton also believes that Dora has the potential to be popular with the U.S. military because of its portable, fully digital platform, which can help military members who regularly transfer from one assignment posting to another.
As the four-member cooperative seeks to expand through the credit union industry, multi-pronged marketing efforts are underway to spread the word including through community and social service organizations.
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