Check Cashing and the Poor
Posted by on July 29, 2013
The first piece coming out of my new research on check cashing and the poor has been published. Check it out:
The South Bronx is Exhibit A of what researchers call a “geography of financial exclusion,” in which low-income people, immigrants, and minorities have difficulty accessing key parts of the financial services system, like banks. Check cashers and other “alternative” financial services offer no way to save; no way to develop a cushion against household emergencies or to accumulate the assets necessary to go to college or purchase a home. But, in order to save, you first have to have extra money. The South Bronx is one of the poorest areas in the US. With a population of 660,000, it has only one bank per 20,000 residents. In Manhattan, one bank serves every 3,000 residents. South Bronx households show evidence of severe financial distress. More than half of the residents of Bronx Community Board 1, which includes Mott Haven, have no bank account; that figure is less than one in ten nationwide. Almost three-quarters of Bronx residents have no discretionary income—that means few trips to Dunkin’ Donuts, or to the toy store, or to the supermarket. But what money they do have often moves through the alternative financial services industry, an already large business that continues to grow nationwide.
Lisa J. Servon
Milano Graduates School of International Affairs, Management and Urban Policy
The New School
72 Fifth Avenue, Room 707
New York, NY 10011
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