Upham's Corner Online

Check Cashing Legislation Changes Significantly

Posted: August 25, 2011     Nancy J Conrad

So you think that filing legislation is easy?  Straightforward?   Easy? (Im) Possible?

Alexandra (Alex) Knowles, an Upham's Corner youth, has been learning about filing legislation the hard way.  A good analogy, perhaps, is deciding that climbing Mt. Everest is doable.  You do the research, prepare yourself for the journey, expect the best and then discover that circumstances well beyond your control have led you where you never expected, and in particular, not to the mountain top.

In 2010 Alex conducted research to determine what laws exist in the Commonwealth of MA to control the fees that check cashing businesses can charge customers.  This led her to formulate a bill to set a cap on check cashing fees which Rep. Carlos Henriquez filed as H01880 on January 20, 2011.
Upham's Corner Youth Writes Legislation

It's now August 2011 (7 months later) and H01880 has made progress.  The Consumer Protection and Professional Licensure Committee held a public hearing where the bill seemed to be well received.  Alex's hopes were high.  Much later on, when the bill left commiittee (much to Alex's surprise), it had not only been substantially altered (many of its teeth had been pulled) but it had been sent out of committee under new ownership. 

So much for good intentions and hard work. Or so you might imagine, but the efforts are ongoing.  Alex is now working with Rep. Henriquez on amendments to the bill to restore some of the original strength that will put an effective cap on fees charged by check cashing companies.

Following is detailed information on the committee hearing, what people had to say and why the bill, as originally written is so important.  Also you will find links to the original bill and the rewritten bill that came out of committee.

Fair Fees for families Fair Fees for families

1.  Alex has created the website:  Fair Fees for Families.  There you can read more in depth about the legislation and its importance. 

2.  Also take the time to sign the petition. Petition at ipetitions.com

3.  Contact your state rep or senator.  They only need five phone calls or e-mails for a bill to be "on their radar" - it gets (at least a little bit) more attention than other bills.  Encourage them to co-sponsor the amendments. 

Rep. Henriquez has sent a letter to the committee and the Reps/Senators in Boston asking for their co-sponsorship for his amendments to H. 3567.  For more information:

House bill H01880 was scheduled for a hearing on May 24, 2011. So Alex and friends approached people who were willing to give testimony in its favor. But first she met with Marianne Hughes, a former lobbyist, who taught her about the technical, personal, political and organizational aspect of testimonies - all of which are really important. 

Alex:  " I also met with the committee chair, Theodore Speliotis.  He was really adamant about not listening to the same story over and over again. So I set up people to give testimony and everyone was given three minutes to speak."

Spkr #
Rep. Carlos Henriquez He introduced the bill as its primary sponsor, talked about the technical aspects of the bill -
  • who uses check cashers,
  • where they live,
  • why check cashers are important and
  • why controlling fees is also important.
Then he told a personal story about his experience with using a check cashing facility and how different they are from banks.

Linda Dorcena-Forry
She co-sponsored the bill and voiced her support for the bill. 

Alex Knowles

(Alex's words)
I started out by describing the basic situation - why many inner city residents use check cashing businesses instead of banks.  I used that to build up to  the bill and its purposes.  It was at that point that people started applauding.  There were 400 people in the room and the vast majority knew what the issue was. 

My testimony was technical because I talked about the percentages being charged and why I picked the percentages that are in the bill.

I used Illinois as a good model state because the final fee selected was worked out as a compromise between patrons and business owners to which everyone agreed.  I used the Illinois fee in how I wrote the legislation. Also Illinois seems to have metropolitan areas similar to Massachusetts.  Another good model state was Connecticut. 

The committee asked me about high-risk checks based on the assumption that high check cashing fees are needed to cover high-risk checks.  I was able to tell them that based on research carried out in 2009, the dollar value of returned checks amounted to 0.31% of all checks.

The committee also asked about who owns check cashing companies - mom and pop owners or large corporations.  I explained that there are three major chains in Massachusetts:  Boston check cashiers, Grahams and and Walmart.  Walmart is one of the biggest chains legislated under 169A.

Damaris Lopez She is the director of Agency Alpha, an immigration services program.  She spoke about the people who were being affected by the check cashiers.  She pulled out a couple specific examples of people that she knew - it woman named Rosemary  and a guy named Pedro.

She said: "I represent the Pedro's and Rosemary's of Massachusetts"  and talked about the legislation from that perspective.

Rep. Broder asked if there were things being done to get people bank accounts.  Does Agency Alpha work towards that goal? 

Ms. Lopez explained that "Agency Alpha is a documentation and immigration services company organization.  While they could be talking about bank accounts it is not one of their mandates.  There are other programs in other locations that do try to get people involved in basic banking services."

Rep from Melrose
He said that "This was a common sense bill and it made sense to pass it."
Pastor Roberto Miranda
Pastor Roberto Miranda came representing Lion of Judah and Cophani, a coalition of Latino pastors.  He recently stepped down as the president of this organization.  The organization represents about 40 Latino churches in the greater Boston area.

He talked primarily about the language barrier - Latino immigrants having a hard time opening bank accounts because of language barriers, minimum deposit is required, just general lack of understanding of the system, being very intimidated, being intimidated by the system and coming from other countries and cultures where you didn't really have banking systems or banking might have been corrupt.

John Barros
He talked about the fact that when the youth get summer jobs, they generally do not have bank accounts.  So they do go check cashiers to cash their summer checks.  As an example he talked about how DSNI has been working to get youth bank accounts. Because of their age, it is really difficult.

John emphasized the fact that we have a societal disconnect.  So much importance is placed on giving youth summer employment but introducing them to the banking system does not take place because the banks won't allow it.  Their only choice is to use their parents or check cashing businesses, so instead of being introduced to adult behavior, they are kept away from it.

After all the testimony was complete, the chair asked the question: Is there anybody who stands in opposition to the bill?  Nobody was present who said they were in opposition.

Demeris Lopez was definitely the most passionate and most personal speaker.  John Barros' testimony was the most unique.  I didn't know in advance what he was going to say.

He later told us that he had taken to heart what the chair of the committee had said -  namely no repetition.  John said that he was very clear and adamant about not wanting to repeat what anybody else had said.  The whole time testimony was being given, he was strategizing about what he should say based on what he had just heard.  "What difference can I bring up" he thought to himself, "than what other people have already brought in?"

When John focused on the teens, it seems he was able to communicate effectively with all of the people listening - no matter where they lived and no matter if they understood the issue of check cashing or not. 

Teens are a topic that anyone can understand - whether you are rich or poor.  You could tell that almost everybody on the panel was of an age that they had children - teens or older.  John Barros testimony focused on was a topic that crossed racial lines.  It was something that everybody could identify with.  Furthermore, it tied check cashing and the banking system into our educational system (or lack thereof).

What John did was add a dimension beyond immigration and language barrier issues.  He brought it down to the teenagers and everyone knows who they are.

After the  April 26, 2011 hearing  the next step is for the committee to vote on the bill.  If they support it, then it goes onto the calendar for a house session. That's when the representatives do the talking.

As of July 30, 2011, Alex stated that "Things are finally moving on the check cashing bill."

Here's the update:

The Chairman of the Consumer Protection Committee, Rep Theodore Speliotis, decided that the fees we originally presented (1.5% for checks $100 and under, 2.25% for checks over $100) were too low.

What he did was look at the other states' laws on check cashers, and redrafted our bill.  He also refiled the bill listing himself as the sole sponsor, and didn't consult Rep. Henriquez before refiling.

The issue with this redraft is that the fees he has suggested will have little to no effect on check cashers in Massachusetts.  His redraft was immediately voted on by the committee and reported favorably to the Committee on Scheduling.

Rep. Henriquez and I are currently writing amendments to Speliotis' redraft, which will be debated in the House in the next session.

 ----- Alex Knowles

Original legislation

Redrafted legislation


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