Are More Cheque-Cashing Outlets given to those in High-Crime Neighbourhoods?

A new study looks stores that target areas with high crime.

According to lead study author Dr. Joel Ray, a physician-researchers at the hospital's li ka Shing Knowledge Institute with police-reported crime data and colleagues, Dr. Ray observed a nearly seven times higer rate of cheque-cashing place in the neighborhoods with higher rates of violent crime.

"Therefore, cheque-cashing places may be strategically placed where customers abound," he said, via a press release.

With the closing of mainstream banks in low-income neighborhoods, cheque-cashing places or CCPs proliferated over the last decade, according to background information via the study. They often show that as alternative financial institutions to banks tend to be used by those in need of quick cash, payment methods and playforms are changing.

Dr. Ray said that despite their convenience, CCPs may represent a form of "deviant" banking because of their extremely high user fees.

"The cheque cashing place industry, which is largely unregulated, is highly competitive and highly taxing on its users," said Dr. Ray., via the release. It's the notion that the person who uses a CCP is probably in a socially unstable state. The CCP industry knows this. Unfortunately, it's all about product placement."

The Centers for Disease Control and Prevention (CDC) notes that each year, on average, 2.99 percent of the cheque value is received as an additional fee. By cashing a cheqe immediately, a CCP provides a short-term loan that's annalized interested rates from 100 to 600 percent.

"A substantial amount of income is lost by the individual who uses a CCP," said Dr. Ray, via the release."Moreover, if an individual on social assistance cashes their cheque through a CCP, then a portion of the tax dollars intended for use by that person goes to the CCP."

Researchers conclude with the hope that banks will step up to the plate and help more low income families in bad areas.

What do you think?

More information regarding the study can be found via the journalSociology Mind.