How Check-Cashing Services Impact Low-Income Americans Research Paper

How Check-Cashing Services Impact Low-Income Americans - Research Paper ExampleWhen a San Francisco-based bank began to expand commercial check- specieing services in the Los Angeles area, it was criticized as ripping off the poor (pp. 142). B. How Did They Begin? These check-cashing services frequently started out as small, mom-and-pop operations that sold antiques, jewelry, televisions, and other odds-and-ends items and knick-knacks. Pretty soon, check-cashing services included everything from getting a check cashed (without having to redeem a bank account)to other financial services, including getting cashiers checks and money orders. A. Who Started the Service? These services were started by mountain who had a little bit to invest in their business. Usually, these service providers started out small, and, as their wealth grew, they could either expand their pawnshops or check-cashing serviceswhich didnt affect a checking account at the bank, which was a novelty for poor peop le who traditionally didnt have financial services available to them due to their socioeconomically-disadvantaged status. II. How Did Check-Cashing Services Become Popular? Check-cashing services became popular when people realized that they needed some kind of banking services in order to cash their checks for pennies on the dollar. What they didnt realize was that these currency exchanges were often charging exorbitant fees for providing said services. III. What Groups Were Targeted A. How Were These Groups Selected? These groups were most likely selected due to their low socioeconomic status. People who are lifespan in poverty rarely have slight cash flow, and less capital to be able to put towards financial servicessuch as, say, having a checking and/or nest egg account at the bank. Thus, this can drive people into even more poverty because they are non saving money. Since they are not saving money, unfortunately, this is causing them much distresshaving to usually live payc heck to paycheck. Many of these people are struggling economically. With many people out of work and the national unemployment rank at 9%, several people do not have jobs and are just living on their earnings from part-time jobs and unemployment checks, not to mention welfare checks from the government. A large percentage of the American population is now living on welfare. These currency exchanges (or check-cashing services) just prey upon the fact that the poor feignt have access to good financial services because banks usually dont cash checks for people who dont have accounts with their banks. B. What Do Critics Say About Targeting These Groups? Critics would generally agree that targeting this low-income, socioeconomically-disadvantaged groups would be morally and ethically wrongspeaking from the standpoint of a consumer.