Shannah Kurland Yesterday, a Rhode Island House committee approved a bill requiring payday loan, check-cashing and money transfer agencies to report their profits and community investment practices by location. Currently, the state only requires that companies report financial information for their entire operation and it has no disclosure requirements at all for community reinvestment. Under the present system, a giant like Western Union reports global profits of $4 billion, but gives no data on the profits generated locally. “These places function like banks in low income communities of color, and it’s not right for them to escape the important role that the CRA [Community Reinvestment Act] plays for the banking industry,” says Mary Smith, executive director of Oasis International, a group that works with African immigrants. State Department of Business Regulation records show that check-cashing outlets cashed over half a million checks in the state in 2007, for a total of $224,919,276, while money transfer agencies made over a million transactions totaling $302,094,649. Both types of businesses are located disproportionately where people of color live, according to a study by Transnational Institute for Grassroots Research and Action (known as TIGRA), a network of more than 500 migrant organizations globally. Ayda Rivera, a Providence-based activist with TIGRA explains that “the same system that exploits us on a global scale through the money transfer industry is exploiting us in our own neighborhoods with payday loans and check cashing stores.” The bill (H5900) still has to pass the house floor and its companion bill in the senate (S293) awaits a committee vote but activists are hopeful after clearing the first major hurdle. Western Union, through its trade association the Money Services Round Table has hired top-of-the-line lobbyists to oppose the proposal.
Rhode Island Goes After Western Union
By Guest Columnist Jun 10, 2009