Fact Sheet: The Licensed Check Cashing Industry in New York State
“MSBs [check cashers] play a vital role in our economy and provide valuable financial services, especially to individuals who may not have easy access to the formal banking sector.”
- Remarks by Jennifer Shasky Calvery, Director of the Financial Crime Enforcement Network (FinCEN) - August 12, 2014
How big is the industry in New York?
- There are approximately 530 licensed check cashing locations, also called financial service centers (FSCs).
- FSCs provide access to financial services to more 1million New Yorkers each year and also play a critical role in the economy through a multitude of financial services offered, including processing of payments.
- The industry cashes nearly 30 million checks annually with a value of between $11-12 B.
- The industry processes approximately 10 million customer bill payments annually totaling in excess of $1B.
- The industry sells more than 6 million money orders annually with a face value of close to 1B.
- The industry processes more than 3 million transfer transactions annually with a total value of more than $6M.
- The industry is licensed by the NYS Department of Financial Services. Check cashing fees are set by the Department.
- The industry employs approximately 4,000 people and more than 80% (3,000) of the employees are minorities most notably from Black and Latino communities.
What is the profile of people who use services offered by financial service centers?
- Slightly younger than the general population. Primarily low-and-moderate income.
- 75% are employed full-time, and 68% maintain at least one traditional bank account.
What financial services do FSCNY members offer their customers?
New York has one of the lowest check cashing fees in the nation at 2.01%. FSCNY members are continually expanding menu of services offered to meet customer needs. Current services include:
- Prepaid access cards that function as virtual bank accounts
- Public transit metro cards
- Prepaid Cellular & card top ups
- Electronic bill payment services
- ATM access\Bank withdrawals and balance inquiries
- Point-of-Banking services with participating credit unions
The Financial Service Centers of New York (www.fscny.org) is the industry’s leading voice on legislative, regulatory and business issues and the leading advocate for the rights of consumers to access basic financial services in New York. FSCNY’s activities on behalf of our members include:
- Advocating industry positions before federal, state and municipal lawmakers and regulators
- Developing innovative new products and services to meet consumer needs
- Providing state-of-the-art education and compliance training programs for the industry
- Hosting the state’s only Annual Conference
- Sponsoring an annual scholarship program for New Yorkers pursuing post-secondary education
- Encouraging and recognizing members for outstanding community involvement
FiSCA, the national trade association representing the industry, to which all FSCNY members belong, has teamed up with NetSpend Corp to offer a one-of-a-kind interest-bearing, federally-insured savings account linked to a prepaid debit card. (See enclosed NetSpend National Savings Program fact sheet for additional information.)
Fact Sheet: Industry Regulation
Contrary to popular belief, Financial Service Centers are among the most highly regulated of all consumer financial service providers. Consumer complaints regarding FSCs are virtually non-existent.
State Regulation: The industry is licensed by the NYS Department of Financial Services and check cashing fees are set by the Department which also governs money transmission services. The industry is subject to periodic Department audits relating to all aspects of the business.
Federal Regulation: FSCs are regulated at the federal level and are subject to more than a dozen federal laws including:
- Title X of Dodd-Frank Wall Street Reform and Consumer Protection Act
- Truth in Lending Act and Reg. Z
- Equal Credit Opportunity Act and Reg B
- Fair Credit Reporting Act and Reg. V
- Red Flags-Fair and Accurate Credit Transactions Act
- Gramm-Leach-Bliley Act and Reg. P
- Electronic Funds Transfer Act and Reg E
- Federal Arbitration Act
- Electronic Signatures in Global and National Commerce Act (Esign)
- NACHA Rules and Guidelines
- CAN-SPAM Act
- Fair Debt Collection Practices Act
Leadership Role in Anti-Money Laundering Compliance: As Money Services Businesses (MSBs), FSCs are also subject to the Bank Secrecy Act and the USA PATRIOT Act. These laws require MSBs to have extensive anti-money laundering (AML) policies and procedures. FiSCA, the national trade association that FSCNY members are affiliate with, is a recognized leader in the development of these materials for the MSB industry.
The importance of MSBs was recently recognized by FinCEN Director Jennifer Shasky Calvery, who in her remarks before the Mid-Atlantic AML Conference in August 2014 stated: “MSBs are subject to the full range of BSA regulatory controls, including the anti-money laundering program rule, suspicious activity and currency transaction reporting rules, and various other identification and recordkeeping rules…. As a result, MSBs play an important role in implementing procedures to thwart serious illicit activity that, left unchecked, could jeopardize the U.S. financial system.”
Director Shasky Calvery’s remarks were echoed by Under Secretary for Terrorism and Financial Intelligence David S. Cohen at a Treasury Roundtable on Financial Access for MSBs in January 2015, who stated, “MSBs do more than advance financial inclusion …. MSBs are also key to financial transparency. Financial transparency is a goal we work toward every day in this building, since the more transparent the financial system is, the harder it becomes for illicit actors – states, terrorists, or criminals – to camouflage themselves in the legitimate economy.”
Fact Sheet: Customer Satisfaction Survey
Survey confirms that FSCNY members deliver quality services to thousands of New Yorkers who choose to use community financial service centers (check cashers) to meet their financial needs
The financial service center (check casher) industry satisfies the financial needs of its customers in ways that accommodate their other vital needs – convenience, cultural sensitivity and fast, respectful service – in ways that traditional financial institutions do not. FSCNY members understand their customers and treat them in ways that engender strong loyalty. A survey of financial service center customers who utilize FSCNY member locations to conduct their financial transactions paints a very positive picture of our industry.
Results from the Customer Satisfaction Survey include:
- 98% rated overall service received between “excellent” and “good”
- 99% rated the hours of operation between “excellent” and “good”
- 100% rated store location between “excellent” and “good”
- 97% rated stores as having a safe environment between “excellent” and “good”
- 96/% believe stores do an “excellent” and “good” job of communicating all costs
- 99% rated stores as having the products they need between “excellent” and “good”
- 79% rated stores between “excellent” and “good” for charging reasonable fees
- 68% have either a checking or savings account
- 24% who no longer used banks or credit unions said they did not like them or had a bad experience with one; 15% cited high fees or minimum balance requirements
- 63% have been customers of a particular store for at least one year. Many (21%) had been customers for at least five years
- 75% have full-time jobs
- 39% are high school graduates; another 16% are college graduates
- 41% are African-American; 31% are Hispanic; 21% are Caucasian
The survey was conducted by Dr. Patricia Cirillo, Ph.D. of Cypress Research Group, a nationally-respected firm. The survey results have a margin-of-error of +/- 3 percent.
Additional data from the survey is available upon request.
Fact Sheet: Transparency – A Consumer’s Right To Know
Licensed financial service centers (check cashers) provide total transparency in all consumer transactions. Customers know the costs of their transactions up front and can plan accordingly. No hidden fees or surprises follow at the end of the monthThis affords consumers tremendous peace of mind.
- Consumers pay approximately $30 billion in overdraft fees.
- Bank earnings hit a record-high of $154.7 billion in 2013.
- Overdraft fee revenue hit an all-time high of $37.1 billion in 2009, and still generated $31.9 billion in overdraft revenues in 2013 despite the imposition of regulatory restrictions.
- The average overdraft fee rose to a record high of $32.74 in 2013.
- Bank fees rose to record levels in 2006 when American consumers paid more than $36 billion in fees associated with their checking and savings accounts.
- This raises questions about consumers' awareness of the terms and conditions of their bank accounts.
- Further, GAO staff posing as customers were unable to obtain detailed fee information and account terms and conditions at over one-fifth of visited branches and also could not find this information on the web sites of many institutions.
- While consumers may consider other factors in addition to cost when shopping for accounts, an inability to obtain information about terms, conditions, and fees hinders their ability to compare institutions.
- Bank fees and penalties deter New Yorkers who do not have a bank account from opening one and cause many that do to close accounts. More than a third stop using bank accounts because of excessive fees and an additional fifth because of hidden fees. “Lack of cultural competency and services in non-English language” are also barriers to providing financial services for banks.
- This is in sharp contrast to the experience of customers at financial service centers (check cashers). Financial service centers clearly post all fees in easy-to-understand menu-style signs posted in store lobbies. Consumers know exactly what each transaction will cost before the transaction ever begins.
- The ready availability of this information is cited as one of the reasons why this “transaction” model of providing financial services is the choice for hundreds of thousands of New Yorkers every day.
- The fast, convenient, simple and transparent transactions offered by check cashers make them the financial service provider of choice for many New Yorkers, who many perceive “as having a higher and hidden fee structure.”
Fact Sheet: FSCNY Members Offer the Netspend National Savings Program
Revolutionary Partnership Provides “Virtual” Bank Accounts and No-Fee Savings Accounts to Unbanked New Yorkers, Empowering Them to Save for the Future
- The Netspend prepaid access cards (branded by Visa or MasterCard), act as virtual bank accounts, allowing consumers to store funds in a federally-insured account until needed. They also allow consumers access to electronic commerce.
- In 2005, the Financial Service Centers of America, the national trade association to which all FSCNY members also belong, and Netspend joined forces to provide real savings opportunities for consumers who previously did not have access to traditional financial institutions, or chose not to use them. The Netspend National Savings Program resulted, offering an interest-bearing, FDIC-insured savings account linked to a prepaid branded Visa debit card. The program remains the only one of its kind, offering competitive savings benefits and protections to all consumers without restriction.
Only the Netspend National Savings Program offers consumers:
- FDIC-insured savings accounts currently earning 5% annual interest (up to $5,000).
- No minimum deposit to enroll in the program
- No minimum monthly balance to maintain and no monthly service fees
- Convenient access to savings through their Netspend All-Access Visa Prepaid Card
Why is this significant?
- The Netspend National Savings Program provides financial service center customers with a simple, secure and convenient savings vehicle, giving thousands of New Yorkers a safe place to keep their money while creating a savings fund for long-term financial empowerment.
- These consumers can now access electronic and other commerce, from which they were previously excluded because they did not have credit cards.
How successful is the National Savings Program?
- More than 100,000 National Savings Program accounts have been opened nationwide.
- Participants have deposited more than $100 million into their savings accounts.
Fact Sheet: PayNet Network
FSCNY members provide point-of-banking services and other financial solutions for participating banks, credit unions and others through their PayNet Network
What is PayNet?
PayNet is a financial services solution, consisting of PayNet Payroll Check Cashing and PayNet Deposit, offered by participating members of FSCNY.
- FSCNY has offered this value-added network of check cashers in New York since 1994.
- With nearly 400licensed locations throughout New York State, including more than 300 locations conveniently located throughout New York City, PayNet provides employees of participating companies and customers of financial institutionsa conduit for delivering safe and convenient place to cash a payroll check, make a deposit, or conduct any number of other financial transactions.
- PayNetprovides thelargestnetworkoffinancial servicecentersinNewYork, offeringadegreeofaccess for financial services that isimpossibleto match.
- Numerous financial institutions and private and public employers, including the New York City Office of Payroll Administration, have utilized the PayNet network since its inception in 1994.
PayNet Payroll Check Cashing Network – An Ideal Solution to Assist Companies in Meeting the Payroll Needs of Their Employees
- PayNet Payroll Check Cashing Network represents an attractive alternative for financial institutions and companies to accommodate the payroll needs of their customers.
- FSCNY member locations offer expanded hours to accommodate varying work schedules (many are conveniently open seven days a week, with a significant number open 24 hours a day).
- PayNet Payroll Check Cashing Network provides customers, many of whom are living paycheck to paycheck, with immediate access to their funds.
PayNet Deposit Network – An Opportunity for Financial Institutions to Expand Their Footprint without Laying a Single Brick
- PayNet Deposit Network enables financial institution customers to perform basic financial services, such as making deposits, transferring funds, making withdrawals, and checking account balances, at many of our nearly 400 network locations in New York.
- Deposits are immediately credited to the customer’s account.
- The transaction process is simple for users to understand and, unlike an ATM, customers perform their transactions with live tellers.
- FSCNY member locations provide financial institutions with customer desired access and convenience through a vast network of locations and expanded hours of service.
- All a customer needs is a debit card from a PayNet participating financial institution and a government-issued photo ID.
Fact Sheet: The Unbanked & Underbanked Consumer in New York
For hundreds of thousands of “unbanked” and “underbanked” New Yorkers, the transaction-based approach to financial services makes the most sense when managing their personal financial transactions. Financial service centers (FSCs), also known as check cashers, provide the cash-based products and services that best meet their needs. They also offer the peace of mind of knowing their obligations have been met without fear of future financial repercussions.
Who are these consumers?
- According to a 2013 FDIC study (released in September 2014), 19.6% of all New York households (more than 600,000 NYC households) are considered “underbanked,” meaning they have a bank account but do most of their banking with alternative financial service providers such as FSCs.
- Nearly 10% (an estimated 310,000 households) of all New York households are “unbanked,” having no bank or credit union account relationship whatsoever.
- In March 2010, the NYC Department of Consumer Affairs released findings from a study that revealed that more than 13% of NYC households are unbanked (i.e., more than 825,000 individuals).
Why do these consumers choose financial service centers?
- Traditional financial institutions are often difficult to find in working class and minority neighborhoods, having concentrated their locations in middle and upper class suburbs.
- In contrast, FSCs are deeply-integrated members of the local communities they serve.
- FSCs offer better hours to accommodate varying work schedules (many are conveniently open seven days a week, with some open 24 hours a day).
- Low-income individuals sometimes need a higher level of interpersonal service not often found in traditional banks. They get that at a FSC.
- There is significant cultural aversion to using mainstream banks. Many immigrants come from cash-based cultures and are reluctant to trust banks with their money.
- The FSC staff speaks the language(s) of the neighborhood and offer a more family-friendly environment than traditional financial institutions.
- These consumers often lack the liquidity that is required to open and maintain traditional bank accounts.
- They live paycheck to paycheck and have little, if any, money to put into a bank.
- Low- and moderate-income consumers manage tight budgets and cannot be subject to surprise fees and back end charges.
- An unexpected charge can be catastrophic to a family’s finances.
- All fees charged by FSCs are posted and explained up front.
- All fees are paid at the time of the transaction, at the point of sale.
Fact Sheet: FSCNY’s Scholarship Program
Giving back to local communities, helping promote New York’s young scholars and community leaders
Since its inception in 1996, the FSCNY college scholarship program has helped 310 deserving students attend Ivy League and other selective universities and colleges. In total, approximately $713,000 in college scholarships has been awarded to students living in New York State.
What are the criteria for a FSCNY scholarship?
Scholarship recipients are selected based on the following criteria:
- Academic achievement;
- Demonstrated leadership in their school; and
- Demonstrated involvement in their community, contributing at least 50 valuable hours of volunteer service each year of high school.
In addition, all applicants must fill out an extensive application which includes an essay, explaining their most rewarding experience through their community service involvement. All applications are reviewed by a selection committee, which is comprised of industry leaders from across the state.
Who is eligible?
- Applicants must be seniors attending from public high schools in New York City’s five boroughs and the surrounding New York counties.
What is the size of the scholarship?
- Scholarship winners receive a minimum $2,000 cash grant to be applied towards their freshman year of studies at a college or university of their choice. The annual top award is $7,500.
Who supports the scholarship program?
- MoneyGram Internationalis thestate-wide co-sponsor of the program.
- The scholarship program also is generously supported by a wide range of FSCNY members who understand that investing in New York’s future is in everyone’s best interests.
Additional information on the FSCNY national scholarship program can be found at
Fact Sheet: Key Community Initiatives
FSCNY Members Lead by Developing and Supporting Key Community Initiatives
FSCNY Raises Funds and Provides Other Superstorm Sandy Relief
- Virtually all FSCNY members remained open for business during and immediately after Superstorm Sandy, providing critical financial services to New Yorkers.
- Immediately following the Storm, FSCNY initiated an industry-wide fundraising campaign through which participating member stores donated $3 to the American Red Cross for every FEMA disaster assistance check cashed in their locations. In addition, FSCNY members offered their stores to local officials as a resource for recovery programs. They served as distribution centers for information and as impromptu meeting halls for officials and area residents.
FSCNY Members Help Raise Nearly $300,000 for Haiti Relief
- FSCNY partnered with Western Union on a collaborative fundraising effort under which the Western Union Foundation would match funds raised by FSCNY members.
- Mobilizing employees and customers in the aftermath of the earthquake, FSCNY members raised nearly $150,000 for the FSCNY Haiti Relief Fund.
- The money was collected through in-store collections at hundreds of check cashing locations across the state and from direct donations from company owners.
- With Western Union matching funds raised by FSCNY, the total amount of money raised by the industry for Haitian relief was nearly $300,000
- All funds contributed through this initiative were donated to Mercy Corps.
FSCNY Supports Financial Education in NYC Public Schools
- FSCNY initiated the My Money & Me – Becoming A Money Smart Kid financial education initiative.
- This initiative, a collaboration with American Credit Alliance (ACA) and New York City’s Department of Education,provides educational tools to elementary school teachers to help them instruct young students about saving, spending and sharing money
- More than 2,500 students from 25 schools in Manhattan, Brooklyn and the Bronx received a unique financial education through this program.
FSCNY Voter Registration Program - Helping Get Out the Vote
- In 2012, FSCNY re-launched its voter registration program – “Democracy for All” – aimed at encouraging all New Yorkers to register to vote.
- FSCNY member stores actively supported the voter registration drive.
- Participating members posted decals and posters in their stores urging customers to register to vote.
- Registration forms were available at all participating stores.
- Completed forms were collected at the participating stores and submitted to the New York State Board of Elections
 Anna Maria Andriotis “Overdraft Fees at Banks Hit a High, Despite Curbs,” Wall Street Journal (1 April 2014).
 “2014 Check Account Survey,” Bankrate.
 University Neighborhood Housing Program, “Bronx Financial Services Survey Report” (2013)
 Funds in the Netspend National Savings Program accounts are held by Inter MetaBank, Bancorp Bank, and BofI Federal Bank and insured by the FDIC.