Services immigrants bank on
Share Now on:
Services immigrants bank on
TESS VIGELAND: Need to cash a check? You can go to the bank, or you can go to a money-transfer office or a check-cashing outfit. Believe it or not, check cashers process more than $60 billion worth of checks each year. But the industry’s struggling to bounce back from new regulations imposed after 9/11 as part of a crackdown on money-laundering. Ashley Milne-Tyte telss us some business people in New York are taking matters into their own hands.
ASHLEY MILNE-TYTE: In the upper Manhattan neighborhood of Washington Heights, there’s a different flavor to personal finance than there is in, say, midtown. For one thing, gone is the sober atmosphere of the average bank.
Jason Carballo runs Castle Check Cashing with his father. He says around 1,500 people, mostly immigrants, come in each day. After cashing a check, some will wire a portion of that money to family back in the Caribbean or Latin America. The place is open round the clock.
JASON CARBALLO: If you think about it, I mean New York City being a 24-hour city, it makes perfect sense. There’s a large portion of the population of the metro area that works different hours, different shifts, so . . . and it has worked out for us very well.
Most customers and tellers know each other. Dolores Sanchez is cashing a check for one regular customer. She counts the bills and hands them over.
DOLORES SANCHEZ: Thank you, muchas gracias.
A heartfelt thank you, since the customer has just left Sanchez a dollar tip.
Check-cashing firms like this that blend the practical with the personal are a big part of immigrant finance. Many immigrants don’t have bank accounts.
While immigrants need them, check-cashing and money-transfer firms need banks to stay in business. And many big banks, including Bank of America and Chase, have been closing their accounts — basically because it’s a hassle to keep them open.
Richard Riese is with the American Bankers Association.
RICHARD RIESE: There is a great deal of review and effort that they must do to satisfy themselves that a particular check casher or money transmitter is worthy of putting one’s trust in.
Check-cashers and money-transmitters have to meet the state’s anti-money-laundering compliance standards. Only then can they receive a license. But the feds now put the burden of ensuring they’re above board squarely on banks. So banks are backing off doing business with them.
More than half of check-cashers in immigrant-heavy New York, New Jersey and Florida have had to scramble to find a new bank.
KEVIN NEUSCHATZ: It’s just not possible to operate without a bank, otherwise you’re sitting on piles of cash, with no way of putting them into the banking system. You can’t transfer the money.
That’s Kevin Neuschatz of money-transmittal firm Choice Money Transfer. He’s part of an alliance that includes Castle Check Cashing and others. The group is trying to ensure businesses like their’s don’t have to hustle to find new banking partners. So they’re starting their own bank.
And it’s a long way from Wall Street. On a desolate stretch of sidewalk in the south Bronx, bank manager Harry Murphy peers in at the premises the group has leased for the headquarters of their bank-to-be.
HARRY MURPHY: This will be the bank here. There’s about 2,500 square feet here, we’ll have an ATM in the front, four teller stations, three platform stations . . . and you know, a traditional bank lobby.
The space lies empty now as the organizers wait for approval from the New York State Banking Department and the Federal Deposit Insurance Corporation. At first, Murphy says, the bank — named MSB Bank — will court those money-service businesses that are being dumped by other banks. Eventually, though, they’ll cast a wider net into the community.
MURPHY: People who would start to use check cashers and agent locations and money transmitters . . . over time will seek conventional banking relations in a conventional commercial bank.
Banks are few and far between in this part of the Bronx. That’s partly why this bank is opening here. But the immediate area isn’t exactly what you’d call thriving. There are few businesses, and an abandoned lot lies just across from the bank’s location.
On the other hand, the pre-war building where the bank is housed has a new coat of paint on its railings. Just round the corner are a few streets of neat row houses with carefully-tended yards.
Murphy sees the owners’ pride as a positive sign.
MURPHY: They watch the community ’cause they care about the community, and they’re gonna be good bank customers for us as well.
If all goes well, MSB Bank will open its doors this fall.
I’m Ashley Milne-Tyte for Marketplace Money.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.