Rewarding banks for doing business
July 30, 2008 | California, alternatives | Comments (1)The James Irvine Foundation in San Francisco gave five of its annual awards to a group of people who run “Bank on San Francisco.” This is a group that recruits banks and credit unions to offer low-cost bank accounts to low income people. A laudable program to be sure. But the reasons the Foundation gave these awards are somewhat troubling:
There are 50,000 “unbanked” households in San Francisco that lack access to basic financial services and lose their hard-earned money needlessly to check-cashing outlets and payday lenders when they could be building assets. (There are more check-cashing and payday lenders in San Francisco than Starbucks and McDonald’s combined…)
Wow. Also: no. The “unbanked” are not dependent on payday lenders because consumers of payday loans must have a checking account. And as for the tired line about check-cashing businesses versus McDonald’s and Starbucks… if you’ve ever been to San Francisco you know this cannot be true.
If we take away the reasoning for the award — that payday lenders are preying on the “unbanked” — it looks like the James Irvine Foundation has recognized some bankers for doing their jobs, namely offering their services to consumers.
Comments»
I believe that the correct comparison should be check cashing stores or payday loan stores compared to fast food restaurants or coffee shops, not an entire industry to a single company or in this case two companies. What would a correct comparison look like?