A resident of Buffalo's West Side has written a letter to state banking regulators, opposing an application by the owners of The Corner Store for a state license to cash checks.
Jimmy Stewart of Normal Avenue calls for "greater scrutiny" of the application and urges that regulators deny or at least delay approving the license for three to four years.
That's equal to the period in which he asserts that the owners of the store at 380 Connecticut Ave. have been taking advantage of unsophisticated local residents and "unwitting check cashers" in the "culturally diverse" community, who "have no knowledge of New York State regulations," he wrote in the letter.
He accuses the store's owners of charging excessive and illegal check-cashing fees, and of playing a "shell game" of corporate entities to hide their ownership after he began complaining.
Noting that First Niagara Bank has a branch within 35 yards of The Corner Store, he also urged that banks offer a check-cashing service "for those who do not choose to own a bank account, and provide a safer exchange of paper for currency."
Glorimar Perez-Gonzalez, spokeswoman for the state Banking Department, confirmed the receipt of a letter opposing the application, although she would not confirm Stewart as the writer. "It's being considered as part of the due diligence review," she said.
Lance Rozell, owner of proposed check-cashing business Castleway Financial, applied for the state license last August, citing strong demand from The Corner Store's customers, many of whom don't have bank accounts for various reasons. Plans call for operating Castleway inside the store. Rozell could not be reached to comment.
Further complicating matters, The Corner Store itself has gone through several owners in recent years, including the most recent ownership change just over a month ago. The property itself is owned by Ashish Patel, who leases it to the store. New store owner Ramila Patel -- who is not related to Ashish Patel -- could not be reached to comment, but the store's new manager said it rarely just cashes checks for anyone, and complies with all applicable state laws.
State law bars businesses from cashing checks and charging more than 99 cents without a license from the state Banking Department. Otherwise, they can cash checks for customers in the course of doing other business, but must charge less than $1. But because of the high risk and cost of check-fraud or bounced checks, few businesses are willing to do so.
That leaves consumers with few options locally. Many banks either won't cash checks at all for people who aren't their customers, or will charge fees of $5 or more to do so. The check-cashing law does not apply to banks.
And there's only one licensed and operating check-cashing business in all of Western New York: Buffalo Check-Cashing, at 1325 Jefferson Ave. Buffalo Check-Cashing also opposes The Corner Store's license application, Rozell said, but its owner could not be reached to comment.
Under the law, even licensed check-cashers have a cap on how much they can charge, currently 1.83 percent of the face value of a check. But a Buffalo News investigation four years ago found a host of convenience stores, gas stations, liquor stores and other businesses -- including The Corner Store -- were breaking state law by cashing checks and charging as much as 10 percent. Many stopped after the series of articles ran, only to resume later.
Indeed, Stewart previously wrote to regulators last July 23, asking them to investigate illegal check-cashing fees and procedures at The Corner Store. "The people need your help," he wrote.
In that letter, he cited fees as high as 8 percent to 10 percent. He also noted that there are no posted signs in the store listing check fees, and said the "pick a fee" charges can vary "depending on who's on duty at the time." And he complained that the electronic images of check-cashing customers' identification, with photos, are stored on the store's computer.
The letter and complaints were forwarded to the state Attorney General's office, according to a July 30 accompanying letter from Robert Connors, deputy director of the Banking Department's Consumer Help Unit. It was received by the attorney general's Consumer Frauds & Protection Bureau on Aug. 3. The outcome could not be determined, however.