Supervisors, Treasurer Call for Moratorium on Check-Cashing Services

At least 56 check-cashing services operate in the city, providing services such as loans against people’s future paychecks and the sale of stamps and Fast Passes. However, these services come at an enormous price. Check-cashing businesses charge extremely high interest rates and big fees so that people without bank accounts can cash checks.

Perhaps the most striking fact revealed at yesterday’s event involved the predominance of these businesses in low-income communities. According to Cisneros, the Average Median Income of residents where these businesses exist sits at $24,000. The city-wide median income stands at around $60,000. These figures provide proof that check-cashing businesses leverage low-income people’s poverty against them to earn a profit.

“It’s a form of indentured slavery,” said Ammiano. “We must stop the economic profiteering of the city’s most vulnerable populations.”

As financial institutions, check-cashing services remain subject to state law, so the Board of Supervisors may be unable to create their own regulations for the businesses. However, members of the Board, including Ammiano, are already working with state legislators to develop ways to prohibit predatory lending practices.

Cisneros said he believes the moratorium will give more time to reach a solution before any more low-income people are victimized. He also said the moratorium comes at a vital time, with check-cashing services currently enjoying a 1000 percent growth rate.

“This is just a first step to slow down this excessive growth,” said Cisneros. “We have to slow this down – in fact, we have to turn it around.”

Supervisor Ammiano, along with Supervisors Sophie Maxwell and Bevan Dufty, introduced the legislation later in the day at the Board of Supervisors' meeting.