The clerk told us to try a commercial bank two blocks east. We walked out to the street and didn't see a bank in sight. So we piled back upstairs to the car and drove down Pico until we found one. Once we arrived, Katherine successfully cashed the $105 payroll check made out to her-but for a $6 fee. Even so, the bank wouldn't let her complete any of the other tasks on our list, she explained as she rejoined the group, "because I'm not an account holder."
For our $15 check, we stopped next at a check cashing storefront squeezed next to a liquor store in a Venice strip mall. The room was stark: no chairs, no desks, glaring fluorescent lights, and a single clerk behind a plexiglass window. It vaguely suggested a police station. When Ranjit went to the counter, the clerk informed him that it would cost $5.99 to cash the $15 check. He also needed to fill out an extensive questionnaire of personal information. ("I was surprised," he said later, "by the amount they wanted to know.")
The clerk raised her eyebrows at the check's amount and asked Ranjit if he might prefer to take out a payday loan the next time he came in. The maximum payday loan, she explained, was $255-which required a repayment of $299.98 within two weeks. We passed on the loan, but bought a money order, and picked up a prepaid card, checking off another two items from our list.
Next we stopped at a 7-11 in another strip mall to check another box: adding another $10 to the card. That was easy enough, and when we stepped out into the mid-day sunshine, Ranjit asked Katherine if she would hold his leftover cash. "That's a really interesting gender dynamic, given that's how many low income families operate," she said with a smile. "The money is in the woman's hands."
We took the money across the street, to yet another check cashing storefront in yet another strip mall. The window was covered with banners advertising "Easy Title Loans," "More Cash/Lower Payments" and "Bad Credit OK." Katherine went to the counter to finish another task: executing a money transfer to another team member that we could pick up somewhere else.
While she was there, working through another sheaf of paperwork, Rodolfo reflected on the interest rates listed for payday and title loans. All were very costly, he said, yet might still make sense for the people standing in line around us. (While Katherine was completing the money transfer, one woman was told she couldn't get another payday loan until next week.) "It's hard to compare because we have alternatives, but the set of alternatives for low-income families are different," he said. Though a payday loan is expensive, he suggested, it might be cheaper than, say, paying to have a utility turned back on after it's disconnected because you didn't pay a bill in time. Besides, he continued, if regulation too severely limits what lenders like this can offer, the next option for some borrowers might be loan sharks who not only charge more, and operate with no oversight at all, but create other risks (like violence). "Depending on what the alternative is," he said, gesturing toward the loan rates listed on the wall, "you can argue that it's cheap or expensive."