Originally published in Community Investment, San Francisco Federal Reserve Bank, Spring 2011, pages 9-11, archived on the Federal Reserve’s Community Development website (PDF).
Rita S. recently walked into a friendly, clean, check cashing store in the Fruitvale neighborhood of Oakland, California and began to talk to the teller about cashing her check. […]
All told, $1.6 billion each year of interest, excessive fees, and other exorbitant costs are being charged to poor people every single day, making it almost physically and fiscally impossible for individuals to exit the poverty cycle. Most often, minorities and immigrants, as well as poor whites, are all locked in a financial roundabout in which there is no escape.
Today, the number of private check cashers, payday lenders and pawnshops is more than double the number of McDonald’s franchises in the United States. More than 20 million Americans cash more than $60 billion in checks each year at check cashing businesses
