iStock illustration

Marlborough-based Digital Federal Credit Union, better known as DCU, has joined forces with three other credit unions to launch a challenger bank targeted at low- to moderate-income customers.

Bank Dora Financial is sponsored by DCU, Portsmouth-based Service Credit Union, Minnesota’s Affinity Plus Federal Credit Union and Rye, New York-based USALLIANCE Financial. The lender “continues to seek additional credit union partners,” DCU and Service CU said in separate statements.

The $2 billion-asset, 127,699-member USALLIANCE manages the checking accounts and the accounts are insured by the NCUA, according to notices posted on the Bank Dora website, but the exact role the other sponsors have in Bank Dora is currently unclear. DCU did not return an email requesting more information on its relationship with Bank Dora or the entity’s legal structure.

“Dora has opened the doors to neo-bank technology using the cooperative principals that credit unions, like DCU – Digital Federal Credit Union, were founded on,” DCU Senior Vice President Dave DeWitt said in DCU’s statement announcing Bank Dora’s launch. “Through the offering of this technology, it allows DCU and the credit union industry as a whole, the opportunity to provide bilingual banking services to both the unbanked and underbanked communities.”

DCU is the largest credit union in the partnership, with $9.8 billion in assets, followed by Service Credit Union with $3.5 billion and Affinity Plus with $3.5 billion.

The online-only lender aims to offer Bank On-certified, affordable checking accounts to people who, DCU said, are underserved by traditional banks, particularly challenger banks.

“Their balances are lower on average, and creditworthiness may take time to achieve,” Bank Dora Managing Director Kristi Kenworthy said in a statement, “The credit union movement is really made for offering products at scale that are safe and affordable for all members.”

The organization name is inspired by credit union pioneer Dora Maxwell, who helped charter hundreds of U.S. credit unions starting in the 1930s.

Being Bank On-certified, the Dora Everyday Checking account features no minimum balance, no monthly maintenance fees, early payday with direct deposit, bill pay, a surcharge-free network of over 30,000 ATMs nationwide and financial education opportunities, all “packaged in a fully bilingual experience,” DCU said in a statement.