Without licensed financial services providers, consumers who cannot wait to access their check will resort to less regulated alternatives.
By Thomas L. Leonard, Clovis
Thomas L. Leonard is executive director of California Financial Service Providers Association.
Re: “Californians should pay lower fees at check-cashing outlets”; Commentary, Nov. 2, 2021
Most check-cashing customers have bank accounts and do not use this service for every paycheck. They turn to financial services providers when they need immediate liquidity.
Before cashing their check with our members, they weigh their options, comparing our fees – typically less than 2% the value of the check and capped at 3% – with bank fees, late fees and lost opportunity costs while waiting for a check to clear their bank.
Our fee is based on market competition, bad check losses and state limits, as well as the rising costs to operate community-based, licensed locations, including wages, store leases and taxes.
Further restricting check-cashing fees amounts to elimination of this option and other valued services our industry provides for working families. Without licensed financial services providers, consumers who cannot wait to access their check will resort to less regulated, costlier alternatives. Consumers need dependable, transparent options for accessing their money.