NYDFS' Harris Hails Court Approval of Check Cashing Regs

[Gunnar Larson]

"I Have a Dream" is a public speech that was delivered by American civil
rights activist and Baptist minister Martin Luther King Jr. during the
March on Washington for Jobs and Freedom on August 28, 1963. In the speech,
King called for civil and economic rights and an end to racism in the
United States.

Instead of honoring this sacred obligation, America has given its colored
people a bad check, a check that has come back marked "insufficient funds."
But we refuse to believe that the bank of justice is bankrupt. We refuse to
believe that there are insufficient funds in the great vaults of
opportunity of this nation.

---

https://www.pymnts.com/news/regulation/2023/nydfs-superintendent-harris-hails-court-approval-of-check-cashing-regulation/


New York Department of Financial Services (NYDFS) Superintendent Adrienne
A. Harris has hailed a Thursday (Dec. 7) court decision that upholds the
state’s new check cashing regulation announced in January.

“Today’s decision is a win for New Yorkers who depend on check cashers to
access their money,” Harris said in a Thursday press release.

Harris added that the department’s updated check cashing regulation
replaced an “outdated methodology” that granted annual, automatic, Consumer
Price Index (CPI)-based fee increases to check cashers.

“The new methodology which has been upheld in court today takes into
account the needs of consumers who use check cashing services, creating a
fairer fee setting process,” Harris said.

The check cashing regulation updates methods that had been in place since
2005, PYMNTS reported when the new rules were announced in January.

When outlining the new rules, the NYDFS maintained that the previous
approach did not take into account the “disproportionate impact inflation
has” on state residents using check cashing services. If wages were
stagnant but the CPI rose, customers would be hit by the higher fees and
higher cost of living.

Now, a two-tiered system will be set up: 1.5% fees will be assessed on
public assistance checks issued by government agencies. Other checks will
be subject to a fee of $1 or a 2.2% fee, whichever is greater.

The agency disclosed that the regulation does not apply to commercial
checks, “which are not subject to statutory fee limits, or fees generated
from other services that check cashers often provide” including wire
transfers and bill payments.

The fees will be the same for both in-person and mobile check cashing.

The New York Post reported in March that the check-cashing rate had been
2.27% and that the check-cashing centers that were the plaintiffs in a suit
filed against the new rules said the changes were “arbitrary and
capricious.”

A 2022 assessment conducted for the industry said that the lower fees would
make check-cashing companies “unprofitable” and force their closures,
according to the report.

In Thursday’s press release lauding the court decision, Harris said: “I
will continue to advance policies that support opportunity and access to
quality financial services for all New Yorkers.”
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