Banking in the Hood
Checks may not be disappearing very quickly, but banks are. They are being replaced in inner city neighborhoods and elsewhere by check cashing businesses, which are taking on a bank-like feel. While ATMs, bank mergers, and general cost saving downsizing have reduced the number of U.S. bank branches over the last several years, check cashing businesses are growing and looking more like banks every day. In addition, check cashing outfits, once relegated to inner cities, are moving out into middle-class suburbs. Today there are more than 5,500 outlets across the country, more than double the number in 1988. (As an example, Neighborhood Check Cashing Corp., operating in a working-class section of Rosedale, N.Y., has decided not to sell lottery tickets anymore, so that they will feel more like a bank when a consumer enters their location.)
"Its cheaper
than writing a check," says Janice Ligon, a New York toll plaza
manager and check cashing customer. Ligon has a checking account with
her bank, but can write only three checks per month before getting
charged 50 cents per check. The check cashing business charges just
29 cents for a money order and, unlike her bank, it never closes.
Another check cashing chain, ACE Cash Express Inc., the country's largest such business, builds lobbies at the front of its stores to mimic banks. Meanwhile, banks continue to ask what is happening to their once strong consumer franchise.
