Community Check Cashing, the only nonprofit check cashing store in the country located in the Fruitvale neighborhood of Oakland, California, offers much lower prices, provides financial coaching for individuals and groups, maintains ties to banks and credit unions for referring people for accounts and loans, and develops policy proposals. It has saved an estimated $1.2 million for its customers through its lower prices and other services since opening in May 2009.
CCC’s parent nonprofit, Community Development Finance (CDF), was notified by its bank, US Bank, in a copied letter sent “To whom it may concern”, that it has withdrawn its approval for CDF’s business checking accounts. No reason was given in the letter, but there is great regulatory pressure on banks and US Bank dropped us unceremoniously. Without a bank checking account, CDF cannot remain open. CDF has until November 5 to find a new bank to support it.
This step by the bank is becoming more common in the check cashing and payday lending industry. Many banks do not offer banking services to check cashers and payday lenders, what the industry calls Money Serving Businesses (MSBs). Much of this policy is coming from regulators and the public as an attempt to protect customers from predatory financial services practices.
Unfortunately, this understandable attempt to protect vulnerable people is endangering one of the few existing institutions designed to assist those very same people, as banks refuse to acknowledge any regulatory differences between CDF and market rate businesses.
While CDF presently operates only one store, it has the potential for a much larger impact. For example, CDF has extensive lending experience and has developed a two-tier lending program that potentially can reach a large scale, be operationally self-sufficient once it reaches scale, and offer fair products to replace predatory payday, car title and installment loans.
If anyone has any ideas about potential bank interest, please contact us at (510) 479-1037, or use our contact form to reach out.
Founder & Executive Director