About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

30 W. New Eng. L. Rev. 119 (2007-2008)
Why the Check Cashers Win: Regulatory Barriers to Banking the Unbanked

handle is hein.journals/wnelr30 and id is 127 raw text is: WHY THE CHECK CASHERS WIN: REGULATORY BARRIERS TO BANKING THE UNBANKED PEGGY DELINOIs HAMILTON* INTRODUCTION Across the United States, stories of the unbanked and efforts to address their financial needs abound. The unbanked refers loosely to those people who currently do not have a formal rela- tionship with an insured depository institution or bank.' Another term, the underbanked, refers to those people who have a formal relationship with a bank but who nonetheless substantially rely on alternative financial service providers for basic financial transac- tions like cashing checks or obtaining loans. For the working class, cashing a check, particularly one associated with ongoing employ- ment, is an essential function necessary to meeting everyday finan- cial needs, such as paying rent and purchasing food. The unbanked and the underbanked rely on check-cashing operations to cash their payroll checks at a cost that banks, government authorities, and nonprofit organizations have all tried to ameliorate. Cashing a check for an unbanked working person is an uncom- plicated but costly transaction. A consumer presents her check, in- dorses it, and presents one or two pieces of identification to verify her identity. The check casher, after deducting a fee of approxi- mately two percent of the face value of the check, gives the con- sumer the remaining cash.2 For a consumer making $20,000 per * Former Selma M. Levine Lecturer in Clinical Law at Yale Law School. The author wishes to thank Kimberly Hayden Yerino for her valuable research assistance and Charles R. Wilcox, Founder and President of CheckSpring Community Corpora- tion for his insight and support. 1. Note that the word bank in this Essay refers only to a depository institution insured by the Federal Deposit Insurance Corporation and chartered and examined by either a federal or state bank regulatory agency. 2. James H. Carr & Jenny Schuetz, Financial Services in Distressed Communities: Framing the Issue, Finding Solutions, in FANNIE MAE FOUND., FINANCIAL SERVICES IN DISTRESSED COMMUNITIES: ISSUES AND ANSWERS 8 (2001), available at http:// www.fanniemaefoundation.org/programs/financial.PDF.

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Short-term subscription options include 24 hours, 48 hours, or 1 week to HeinOnline.

Purchase Access

Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most