The neon sign of the Anykind Check Cashing outlet at North Avenue and Pennsylvania flashes like a garish beacon through the drizzle of a dreary Tuesday afternoon. Geneva Smith steps inside, shakes off the rain and heads to the counter.
Ms. Smith, an unemployed mother of three, wants to cash a refund check from her doctor for $18.43. But she forgot to bring her social services identification card, and has no other. She waits patiently as a clerk fills out a questionnaire.
Anykind, part of a Virginia-based chain, normally charges 6 percent of the face value for this type of check, or $1.10, but the minimum charge is $1.50. Because Ms. Smith has no other photo ID, she would have to buy an Anykind ID card, for $6.
"For the prices that they charge, they take you through a lot," she says. Still, after all that, she doesn't get her money -- the clerks refuse to take the risk of cashing her check.
Despite the hassles and cost -- often more than five times greater than bank fees -- check-cashing stores are one of the few links between the nation's financial system and the inner city.
And they're growing at a phenomenal rate. Yellow Pages listings show that the industry grew from about 2,100 stores nationwide in 1986 to almost 5,000 by early 1992, according to a study by a Swarthmore University professor. Between late 1989 and early 1992, the growth rate in Maryland was 114 percent.
Although some activists rail against the fees, most acknowledge the higher costs and risks of running a financial services shop in the inner city. Instead, they blame the banks for largely abandoning low-income neighborhoods, ceding these areas to check-cashers. One example: The number of bank branches in Baltimore has dropped by 15.6 percent since 1989.
"I think that the bankers have written off some areas," Baltimore Urban League President Roger Lyons says. "Some of these check-cashing places are taking the opportunity and making money by holding these people hostage."
Many community activists argue that without the presence of a bank, people in these neighborhoods have no hope of learning to manage their money or saving for the future. Children learn early that the place to get money is not a bank, but a check-casher. Banks just aren't a part of their world.
George Buntin was a manager in Baltimore's public housing authority before he became director of the NAACP branch in Baltimore. He remembers the struggles he had trying to persuade his employees to direct-deposit their paychecks into banks. "I don't recall any rational reasons," he says. "They just didn't want to do it."
Check-cashers argue that many of their customers shop out of convenience, not need. From one-third to two-thirds of the stores' customers have bank accounts, studies show.
Take Gary Wood. Leaning heavily on a walker, the 40-year-old Mr. Wood ambles up to the Anykind counter at about 5:30 p.m. and greets the clerks warmly. They know him here and welcome him with a joke or two.
Unemployed for more than a year, Mr. Wood nonetheless says he has a Maryland National Bank account with "a good deal of money in there." But the Baltimore resident has come in from the rain to cash a $160 stock dividend check at Anykind because he needs the money -- now.
"Banking hours aren't always what you want them to be," Mr. Wood says, as he collects his money, minus almost $5 in fees, or roughly 3 percent. He knows it would cost a lot less if Maryland National cashed his check, but he just can't wait.
"I think that the value we provide to the consumer, in terms of longer hours, faster service and immediate access to cash, are things the customer is willing to pay for," says Raymond %J Hemmig, chairman and chief executive of Irving, Tx.-based ACE Cash Express Inc., the largest check-casher in Maryland and the dTC nation, with 272 America's Cash Express stores. In December the company went public, just before buying nine Baltimore-area stores from a competitor.
Still, there's little question that people who use check-cashers pay more -- sometimes a lot more -- than they would if they used banks. Check-cashing fees range from 1 percent of the amount of a check to more than 10 percent. Like so much else -- groceries, transportation, car insurance -- financial services often cost more for those who can afford it least.
A family with a $16,500 annual income would pay more than $300 a year for basic financial services at a typical check-casher, estimates Swarthmore University professor John P. Caskey, who has studied the industry for the Federal Reserve Bank of Kansas.
By contrast, a $300-minimum-balance bank account that allowed six checks a month would cost the same family $60 a year, according to Mr. Caskey, who cited Federal Reserve Board data. The cost would drop to about $15 a year if the balance remained above $400 and no checks were bounced.