Council to Consider Restricting Check-Cashing Stores

A proposal on the Berkeley City Council agenda for April 30 asks city staff and the Planning Commission to consider new restrictions on check-cashing stores.

The measure by Councilmen Jesse Arreguín, Max Anderson and Darryl Moore also asks the city manager to bring back new regulations on check-cashing stores to the council.

"Check cashing stores have significant negative impacts on distressed communities, by providing lending that includes excessive fees and creating a cycle of repeat borrowing for low-income residents who borrow to have enough money to cover basic living expenses and pay high check cashing fees," according to the agenda item statement from the three councilmembers. "The excessive fees run strikingly as high as 400% when expressed as an annual percentage rate. Additionally, there are secondary impacts associated with check cashing stores, which include noise, litter, and other problems."

Such businesses typically provide short-term "payday loans" secured by a personal check and accompanied by very high fees.

The measure asks staff to consider either of these two regulatory approaches:

1. prohibiting new check cashing stores in all commercial zones in Berkeley, or
2. increasing the level of discretion required for zoning permits for new check cashing stores to a Use Permit/Public Hearing in all commercial zones.

It also asks staff to consider other regulations recently adopted by San Jose that limit payday-lending enterprises:

1. a distance or separation requirement between payday lending businesses to prevent overconcentration in low-income communities, and
2. a distance requirement separating payday lending businesses from residential areas and other places (i.e., schools, parks, churches, adult uses, or liquor stores). 

The agenda statement identifies three check-cashing stores in Berkeley:

• California Check Cashing Stores, LLC 3276 Adeline St,
• Check Center 2005 San Pablo Ave.
• No Hassle Check Cashing Inc 2800 San Pablo Ave. 

They would not be affected by the measure, according to the agenda statement.

A California statewide measure to curb the payday-lending industry – by limiting the number of an individual's payday loans to six per year and by extending the deadline for repayment – was rejected April 17 when the state Senate Banking and Finance Committee voted 5-3 not to forward the measure to the full Senate, according to the San Jose Mercury News.

The committee includes "top recipients of campaign contributions from payday lenders," the newspaper reported.

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