Latino officials sometimes refer to it as the "money under the mattress" syndrome: Many Latino immigrants are unaccustomed to using banks because of financial instability in their home countries. So they stash money in their homes and depend mainly on check-cashing and money-transfer companies for financial transactions.

Three local credit unions are planning to launch an effort this fall to wrest Hispanic customers from those companies and from the growing number of U.S. and Latin American banks that target the community. District Government Employees Federal Credit Union, the Organization of American States Staff Federal Credit Union and IDB-IIC Federal Credit Union, a credit union affiliated with the Inter-American Development Bank, are planning to open a joint operation called a credit union service organization in Mount Pleasant.

The credit unions are trying to set fees and policies to meet the needs of Latino immigrants. For example, it will accept foreign identification cards, such as the ones issued by Mexico's Matricula Consular program, so illegal immigrants can become members and open savings accounts. Loan officers will evaluate credit risk for auto and home loans not only by looking at credit reports, but by taking into account whether or not applicants pay rent on time or send money home regularly. Small-business loans will not be immediately available.

Mount Pleasant and nearby Adams Morgan and Columbia Heights are about 25 percent Hispanic and at least half of those people do not have bank accounts, according to estimates by the District Government Employees Federal Credit Union based on a neighborhood survey. The new operation will offer savings and checking accounts, check-cashing and money-transfer services. It will be equally owned by the three credit unions, governed by its own board of directors and federally chartered.

Credit unions are nonprofit financial institutions owned and run by their members, who pool their money to make loans to one another. Deposits up to $100,000 in federally chartered and most state-chartered credit unions are insured by the federal government.

About 74 percent of the Hispanic immigrants living in the District send money to relatives regularly -- a total of $94 million a year, according to the Inter-American Development Bank. To tap into that market, the new organization will use a transmittal service called IRnet, short for International Remittance Network.

For about $10, members will be able to send up to $1,000 to Mexico. Western Union charges $30, according to the company's Web site. Banagricola and Bancomercio, subsidiaries of two large Salvadoran banks with operations in Adams Morgan, charge about $10 for a $1,000 remittance to El Salvador.

"There is a lot of space to even further reduce the cost of remittances. If the fees are lower, people may decide to save more or spend more," said Carla Decker, president of District Government Employees Federal Credit Union. "Remittances are a tool for bringing them in . . . exposing the individual to a formal financial institution."

Danielle Pereira, a Western Union spokeswoman, said the company expects to keep its customers because "our services are convenient and reliable for consumers, and consumers have come to trust that their money will get to their loved ones."

In the District, the law allows check-cashing companies to charge up to 10 percent of the amount of a personal check and 5 percent of a payroll check. Decker said the new credit union will cash checks free for its members.

But Joseph Coleman, owner of New York-based RiteCheck, said it will be hard to compete with his industry because check-cashing stores are open seven days a week, 24 hours a day. "They think that because they are in a similar business, 'Oh, it will be nothing.' I'll wager that many of these credit unions don't understand the loss [we take] on bad checks. We're open long hours."

The three credit unions plan to pool their assets and apply for grants from economic development groups to raise the $400,000 it will cost to buy equipment, hire staff and have the required monetary deposits. The National Credit Union Foundation, a philanthropy funded by the U.S. Treasury and private contributions, said it has agreed to give $150,000 over three years to help with the start-up costs.

The Mount Pleasant operation is not expected to be profitable for three or four years. Decker estimates that the new branch will attract 50 new members a month for the first two years. Membership will require each participant to open a savings account of at least $50 within six months of joining.

One major challenge will be for the credit unions to overcome a distrust of financial institutions. Daniel A. Mica, president and chief executive of the District-based Credit Union National Association, said the group's research found that Hispanic immigrants in general "are very skeptical about traditional financial institutions."

That mistrust is compounded in Mount Pleasant because a couple of years ago, a fraudulent investment group and unlicensed company claiming to be a bank collected money from people in the neighborhood and fled, said Carlos R. Calderon, president and chief executive of the Organization of American States Staff Federal Credit Union.

To counter skepticism, the new organization will probably adopt a Spanish name meant to invoke stability -- such as Fortaleza, which means strength or fortress, Decker said. It will advertise on Spanish-language radio and in newspapers, and send people door-to-door in Mount Pleasant, Adams Morgan and the surrounding neighborhoods, handing out fliers and explaining that tellers and loan officers will speak Spanish.

"Many of these folks did not have financial relationships in the home county," Calderon said. "They need to learn and feel comfortable."

Carla Decker said a joint venture of credit unions will serve Latino customers who now depend on check-cashing and money-transfer companies."If the fees are lower, people may decide to save more or spend more," Carla Decker said.