CHANGE MY LOCATION
Banning check cashers in certain areas
SEE HOW THIS STORY DEVELOPED
Related Topics: SAN FRANCISCO
)
Supervisors today will consider prohibiting new check-cashing facilities in certain neighborhoods.
SAN FRANCISCO (Map, News) - New check-cashing and payday-lending outlets would be prohibited in parts of San Francisco where they are already clustered, under legislation that is on its way to the Board of Supervisors.
The legislation, which unanimously passed through the Planning Commission last month, would prevent new businesses offering what The City is calling “fringe financial services” from opening in areas including the Tenderloin, the Mission, the Haight and the Bayview, said David Augustine, a spokesman for San Francisco Treasurer Jose Cisneros.
In 2006, the Board of Supervisors passed a temporary moratorium on new check-cashing and payday-lending outlets in The City. There are about 56 of the businesses, concentrated in San Francisco’s poorest neighborhoods, according to the Treasurer’s Office.
Seeking to offer an alternative to the high fees and interest rates charged by these “fringe” institutions, The City launched a new program, “Bank on San Francisco,” in September 2006. The program brought together 15 mainstream banks and financial institutions to offer “starter” accounts to households with such banking obstacles as a lack of a driver’s license or Social Security card or no money for a minimum balance.
City officials last year estimated that 50,000 households in The City had neither a checking nor savings account. Among blacks and Hispanics, about 50 percent of adults in The City do not have bank accounts.
Approximately 5,000 previously “unbanked” households have now signed up for accounts, as of quarterly data released on July 31. The number is on track for a city goal, stated by Mayor Gavin Newsom last year, to have 10,000 families in the program within two years.
Cisneros called the program a “win-win” because financial institutions picked up new customers and those with new bank accounts saved money by not having to pay fees from fringe institutions.
Cynthia Vega, a spokeswoman for Financial Service Centers of America, a trade organization for check-cashing outlets, said the industry provides a valuable service.
“People who criticize these services don’t talk to our customers and don’t understand why there’s such a demand. We help people every day,” Vega said.
Comments from Examiner Readers
2:22 AM MST on Wed., Oct. 17, 2007 re: "Banning check cashers in certain areas"
Report as inappropriate
1:05 PM MST on Tue., Oct. 16, 2007
re: "Banning check cashers in certain areas"
Report as inappropriate
1:04 PM MST on Tue., Oct. 16, 2007
re: "Banning check cashers in certain areas"
Report as inappropriate
10:44 AM MST on Tue., Oct. 16, 2007
re: "Banning check cashers in certain areas"
Report as inappropriate
9:50 AM MST on Tue., Oct. 16, 2007
re: "Banning check cashers in certain areas"
Report as inappropriate
Examiner Reader said:
The supervisors are as always on the right track, but they're not going far enough here. They need to open Bank of San Francisco free money dispensaries which have a tree in the lobby on which money grows. Patrons would simply have to go in, pick a few Franklin Notes, & go about their business.
116 agree | 133 disagree
Vote on this comment: I agree or I disagree
Gretchen said:
Beware of the "law of unintended consequences." When there are several outlets for services - whether restaurants, gas stations, or check cashing services, competition forces some type of fair market value to take place. Everyone knows that these check cashing facilities charge outrageous sums for their services. By allowing them to cluster means that they must compete against each other for clients, and competition should help keep costs down. Lack of competition means that these un-banked customers may end up paying more. Personally I'd like to see all of these sharks put out of business, but until they are outlawed, these businesses serve a segment of the population and competition helps the customer.
120 agree | 135 disagree
Vote on this comment: I agree or I disagree
Polisehed415 said:
Great idea...all should have access to a bank account! I know people that have been the victim of check fraud and could not open an account. What are they supposed to do. These check cashing places should have caps on how much they can charge if they are going to exist. BAnks need to be more lenient and allow people without identification and that have had bank problems open accounts...maybe have some different management rules for said accounts but everyone these days needs a bank account. Aloha!
114 agree | 129 disagree
Vote on this comment: I agree or I disagree
Examiner Reader said:
Having worked for a bank, I believe I can say my bank was not interested in these customers in the first place and wished they would go elsewhere for services. I believe that elsewhere became check-cashing - payday lending businesses.
120 agree | 104 disagree
Vote on this comment: I agree or I disagree
Examiner Reader said:
Get real. Banks and bank customers do not want the "unbanked" in their lobbies, and the unbanked do not feel welcome in traditional banks. Let them go to check cashers if they want to.
122 agree | 117 disagree
Vote on this comment: I agree or I disagree