"Criticism Grows as Check-Cashing Stores Expand in Poorer Areas" is the headline on a New York Times article that is one of those damned-if-you-do, damned-if-you don't treatments. When the financial institutions avoid the poor areas, they're accused of "redlining," or discrimination, as in the Bill Dedman-Bill Kovach series that won the Pulitzer Prize for the Atlanta Journal-Constitution in 1989. When they open up shop in the poor areas, they come in for, as the Times article puts it, "renewed criticism from advocates for poor residents and from bank officials, who say the check-cashing industry takes advantage of those who have no other options."
Particularly rich is the criticism of the check-cashing company, RiteCheck, from Amalgamated Bank:
But the check cashers' emphasis on savings has elicited skepticism from critics, who say the service would make poor people even more dependent on the stores. "They would save their customers even more money if they waived their exorbitant fees," said Keith Pilkington, an executive vice president of Amalgamated Bank.
In the Bronx Amalgamated has only four locations, compared to eight for RiteCheck. And Amalgamated charges customers $5 for a money order, and "Non-Customers" $10, according to its fee schedule. At RiteCheck a money order is 89 cents for amounts up to $500 and $1.29 for amounts larger than $500 and up to $1000. And RiteCheck doesn't discriminate between customers and non-customers in its pricing of money orders. Nor does RiteCheck, at least for money orders, insult someone who shows up and pays money for a service by describing the person, as Amalgamated does, as a "non-customer."
I use a bank, not a check-cashing store, for these sorts of financial services. But there may be other people, like illegal immigrants or those with very low balances (Amalgamated charges a $33 overdraft fee, less if you live in California or Nevada, along with a $2.50 a month maintenance fee for a "dormant" account), for which RiteCheck is a better option. The Times lets the Amalgamated guy get away with his negative comment without pointing out any of this context.