As Seattle's new Express Credit Union makes its official debut this week, it turns the tables and tailors banking specifically to the needs of low-income people.

Its new model combines a credit union with policies and products designed to encourage savings, and a non-profit arm that can fund financial education. Accounts can be opened through local community service organizations, where people are already going for help.

Will that solve the problem for the estimated 20 percent of King County adults who lack a bank account? Recent legislation tackles some of the excess, but there is also debate about the merits of payday lenders. Meanwhile, Express predicts it will take about four years to become financially sustainable and not need to rely on grants.

COURTNEY BLETHEN/SEATTLE TIMES

Nathan Hawkins, a representative for Express Credit Union, helps members at the YWCA Opportunity Place downtown.

With Express rolling out its services to the public and hosting a "grand reopening" on Saturday, there are many questions about how it works, who qualifies and why it's taking on the payday lending industry.

While it aims to help people who have been rejected by banks in the past, not everyone will be accepted for all services. Clinton Jacob called me to say he was annoyed at having been turned down for a checking account at Express after the credit union looked up his history using the Chex system. Jacob owed $500 to a previous bank from a series of overdraft fees, charges which he considered unfair and did not intend to pay back.

Chief Executive Brenda Kurz said Express can't help every case.

"Every situation is very unique," she said. "We're willing to take that extra step and evaluate rather than turn people way."

In some cases, people can open a savings account and establish a six-month track record before being considered for other services like checking accounts and loans.

Express loans are not designed as payday loans, but as an alternative short-term loans with monthly payments, she said. Express offers repayment terms, and the loan is reported to credit reporting agencies so it can improve a credit score if paid back on time. Borrowers get a rebate of one-third of the loan fee once it's paid off, and no checking account is needed to qualify.

To illustrate how Express loans stack up to payday loans in cost, I asked for a detailed breakdown, which can be found here in a comparison chart.doc

Checking and savings accounts are free and can be opened with $5 or $10, along with free ATM use at a network of 300 locations.

Another program, Bank on Seattle, started last year as an effort to extend the services of commercial banks and credit unions to more "unbanked" low-income residents. Express is a member of that initiative.

The non-profit agencies offering Express services are YWCA, Catholic Community Services, the Refugee Women's Alliance, Solid Ground, Hopelink, Multi-Service Center of South King County, New Futures and Neighborhood House.

The agencies are getting grants from the new organization's non-profit arm to handle services like the financial education (which Hopelink is designing) and efforts to reach diverse immigrant communities through the Refugee Women's Alliance, whose staff members speak more than two dozen languages.

I've written a lot about microfinance, which proved to be one of the initial inspirations for Tricia McKay, executive director of the Medina Foundation, who came up with the idea and did years of research to develop a plan. The system of small loans to poor entrepreneurs also turned conventional thinking about banking on its head.

"I became convinced microfinance can and will change the world," she said. "Why is it we have payday lenders on every corner of low income neighborhoods and nothing like this for people in our own backyard?"

For now, Express is focused on King County, but anyone who lives or works in Washington can apply for membership. If the concept proves successful, McKay hopes it can spread and become a model for other communities.