According to recent data from the Federal Deposit Insurance Corp., millions of Americans today do not have a bank account, and they like it that way. In fact, they choose to do business with other types of financial institutions, such as check cashing stores, to meet their banking needs. While the FDIC would like to encourage the general public to utilize traditional banking services, many feel that doing so is not in their best interest.
Ginger R., a mother of two and hard-working American citizen, conducts all of her banking business at an area check cashing store. Driving a recent model Toyota Camry, which contains numerous children’s items, she uses non-traditional banking services for many reasons.
“I don’t like the banks,” she said. “They kept charging me fees on top of fees. If my account was just one penny overdrawn, they would charge me thirty dollars. They were rude when I asked questions.”
Ginger also mentioned that, due to the current economy, she has been unable to pay a few of her bills, who had attempted to automatically remove payments from her previous checking account. “I can’t risk that. I need to know that I have money. I closed my account after that.”
Other consumers choose to thumb their noses at the banking system for other reasons. Worry about the removal of unauthorized funds is at the top of the list, followed by identity theft, unexpected fees, funds availability policies, and overdraft charges. Overdraft protection, which is often offered for a fee through the banks, is not necessary through check cashing stores.
While some banks are beginning to offer banking incentives, such as free checks, free ATM transactions, and online bill pay, check cashing stores ultimately remain in the lead. Customers know that worries such as fees, terms, conditions, or changes in policy never occur. They can come to the location, cash their checks, and receive cash.
An increase in check store patronage can be attributed to the recent rise in unemployment, as numerous unemployed individuals choose to cash their checks at places other than their banks. “They would take it all from me anyway,” says George L., a long-time former employee of a local company. “I have bills outstanding with automatic withdrawal. This way, I pay the bills when I can, not when they want me to.”
Unless the banks are willing to change their policies, it can be expected that consumers will continue to utilize alternative financial institutions.