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Not having a bank account is costing Detroit's poor big money

Susan Tompor, The Detroit News on

Published in Business News

Roughly 8.8% of households in metro Detroit haven't taken what financial experts call the first step toward economic inclusion.

They don't have bank accounts. And it's costing them big money to cash checks and borrow money outside the traditional banking system.

Need to cash your stimulus check?

Call a local party store or check cashing store in metro Detroit and it could cost you around $60 to $100 just to cash a $1,400 stimulus check at some spots.

The bigger the check, the more money you're handing over if the fee is based on a percentage of the check's dollar amount.

Check cashing fees can be 6% or more in some local outlets. A $4,200 stimulus check for a family of three could trigger $252 in fees if the store has a 6% fee.

 

Michigan does not have a law that limits or puts a cap on how much a business can charge you to cash a check.

Consumers without bank accounts face ongoing costs

The problem doesn't disappear with what could be the final round of stimulus checks.

The $1.9-trillion American Rescue Plan calls for sending the Child Tax Credit to families in periodic installments of $300 or $320 from July to December. The rest would be claimed as a credit on the 2021 tax return. Low- and middle-income families could receive $3,600 for children 5 and younger and $3,000 for those ages 6 to 17.

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