City May Ban New Check Cashing Stores

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(Sacramento, CA)
Monday, October 15, 2007

The City Council is scheduled to vote on it Tuesday. Councilwoman Sandy Sheedy introduced the measure. She says the stores target low-income residents.

"We’ve noticed a lot of new check cashing stores going up in the entire city, mainly in certain zip codes rather than others and they’re going in areas where people can least afford to use them and those are the people that they prey on."  

But operators of check cashing stores say the industry doesn’t need any more regulations because competition weeds out the bad lenders. The purpose of the proposed 45-day moratorium is to give city staff time to research whether tighter regulations are warranted. Right now, there are about 60 payday lending stores throughout the city.