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SureCashXtra: A Facility for a Prepaid Card with Credit

Adam Rust's picture

Posted July 25, 2012

A tribal lender is offering a short-term credit product that can be appended to prepaid cards.

The lender, First American Surecash of Box Elder, Montana, will advance ten dollars for a fee of $1.60. There

is no real limit in place on how many SureCashXtra advances a consumer can take within a year.

As has been the case with each and every credit product associated with prepaid, the advance is tied to a direct deposit. The direct deposit determines the frequency and loan size of the advance. According to First American Surecash, the amount is determined by the employer and the card program manager. However, in lieu of advice from those agents, FASC will underwrite based upon default standards.

According to the company's website, "with SureCashXtra, you have the comfort of knowing that you have cash available ... even when your prepaid card account balance doesn’t show it!"

How it Works

Once a loan commitment is arranged, SureCashXtra can be tapped at the moment of sale in a manner similar to an overdraft. The borrower applies on the SureCashXtra web site for a loan commitment. The company calculates the amount of available credit through a rudimentary underwriting process.

The default loan commitment size is twenty-five percent of the average direct deposit, with a maximum of $200 per loan. Consumers can borrow eight times in a 16-week period - in other words, during every two-week period - and then they can open a new loan commitment immediately thereafter.

Here is a specific example: If a consumer has an average direct deposit of $510, then he or she qualifies for a loan of $127.50. That is rounded up to $130 per loan. The loan commitment is available for 16 weeks - meaning that the consumer could borrower up to $1,040 over that time.

More credit on prepaid

 

SureCashXtra is held by First American SureCash, LLC. The Chippewa Cree Tribe of the Rocky Boy Indian Reservation owns FASC, LLC. This tribe also owns Plain Green, LLC. Plain Green provides online payday loans.

As a tribal entity, the product is not bound by state lending laws. Even though it is a non-bank financial services organization, it is not supervised by the Consumer Financial Protection Bureau.

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