By Dolores Kong
The Boston Globe

Kevin Tate was fed up with paying high fees to
maintain his account with Fleet Bank. So the computer
graphics specialist voted with his feet: He closed his
Fleet account and began using a check- cashing store
across from the bank in Dorchester's Codman Square.

"We're trying to make money, not give it away," said
34-year-old Tate, voicing concern over Fleet's fees as
he came out of the All Checks Cashed store with a few
money orders to pay bills. Tate, a former BankBoston
customer, finds it cheaper to buy money orders from
the check cashing store than to maintain a Fleet

Check cashing stores have long been the targets of
scorn for activists in low-income communities, who say
the stores prey on the poor. The check cashers reply
that they wouldn't be there if banks hadn't abandoned
these neighborhoods.

But the battle over financial services in low-income
communities escalated to a new level, when Fleet and a
number of other large banks terminated the business
accounts the check cashers maintained at the banks
beginning more than a year ago. The check cashers say
that without access to banks to conduct their
transactions, they will be put out of business.

In an ironic twist, the check cashers in December
began relying on the Community Reinvestment Act - a
law that requires banks to prove that they are
providing services to low-income communities - to
press their case. And they are winning support for
their position in unusual places.

"Check cashers charge high amounts, but you don't put
people out of business for that," said US
Representative Barney Frank of Newton, a Democrat on
the House Committee on Financial Services, who has
been a longtime critic of high fees by both Fleet and
the check cashing industry.

"This is how bad this biggest of banks - Fleet - has
become," said state Representative Jarrett T. Barrios,
a Cambridge Democrat on the state Joint Committee on
Banks and Banking. "Now even the check casher, the
lowly check casher, can compete for consumer

Check cashers say they are standing up for those in
the community who need their services.

"By not having a bank to service our members, some of
the stores might have to close up. That's going to be
detrimental to the inner cities. That's what we're
concerned with," said William Siegel, chairman of
Financial Service Centers of America, a trade group
based in Hackensack, N.J. It represents more than
3,700 neighborhood check cashers nationwide.

The group lodged a formal complaint with US regulators
last December in which it objected to Fleet's $7
billion merger with Summit Bancorp of New Jersey based
on what it called Fleet's violation of the Community
Reinvestment Act.

In a letter, Fleet told regulators it decided to close
the accounts because check cashers "by the nature of
their businesses are at high risk that individuals
will use their services to process unusual,
suspicious, or illegal transactions sometimes linked
to money laundering and/or other criminal activities."

Drew J. Pfirrman, deputy general counsel for
FleetBoston, wrote in his December letter that the
bank first decided in May 1999 to close the accounts
because the cost of "sophisticated monitoring,
compliance and audit procedures to detect such
activities . . .outweighed the benefits" of keeping
them open. Pfirrman added that the argument that this
decision violates the CRA "is without merit."

Check cashers dispute Fleet's claims. Siegel said that
his industry works closely with regulators and that
it's "very rare that you get charges regarding money
laundering" lodged against check cashers.

Gerry Goldman, the trade group's general counsel,
cites two dozen banks in addition to Fleet that have
or are planning to terminate check cashers' bank
accounts, including such big names as Citibank. His
office has been letting regulators know that the check
cashers association "believes that the cancellation of
banking privileges of law-abiding businesses that are
part of a regulated industry is setting a dangerous
precedent that must be challenged," he wrote in an
industry magazine.

However, despite the check cashers' complaint, federal
regulators approved the Fleet-Summit merger last

At the heart of the current debate is banking's role
in a community, particularly one that's predominantly
minority or low- and moderate-income: Providing ready
access to credit and other financial services.

Fleet officials say they are doing their part and note
that the company is "on track" to meet a five-year
community investment commitment of $14.6 billion it
made at the time of the Fleet- BankBoston merger two
years ago. While not breaking out the Massachusetts
numbers separately, Fleet said it has made available
nearly $2.9 billion in community investment programs
throughout the Northeast and Florida in the first

The bank also points to the other ways it contributes
to the community: through the $11 million in
charitable donations, the number of mortgages it's
given to low- and moderate-income borrowers, the Basic
Checking account with a fee as low as $1.50 a month
with direct deposit.

Fleet's Basic Checking has been so popular the bank
exceeded its two-year goal of opening 42,000 such
accounts, with nearly 90,000 already established, said
Gail Snowden, executive vice president and managing
director of the Community Banking Group for
FleetBoston. "It's cheaper than the fees check cashers
charge," she said.

With only 10 free transactions a month, however, and
additional fees ranging from $3 for a money order to
$1.50 for a "foreign" ATM transaction, fees can
quickly mount, depending on how a customer uses the

Snowden said that part of what Fleet needs to do "is
to get people into the right account," depending on
how they conduct their transactions.

"We're trying to think of ways to get people to have
more bank accounts" said Snowden, adding that she has
"not seen significant runoff" from bank branches.

Still, some consumers like Tate find it cheaper to do
business with a check casher than with Fleet. The
bank's fees have even caused the Rev. Alexander Hurt -
once a critic of check cashers - to reconsider his

"I was one of the people in the community saying we
need more banks involved, to bring more bank services
to poor people and push out check-cashing and
predatory lending," said Hurt, who was involved in a
1998 effort to shutter check-cashing places in some of
Boston's predominantly minority neighborhoods through
his Hurt Inner City Ministries. "I never thought Fleet
would be even worse," he added, referring to the
bank's transaction fees.

Fleet officials dispute that contention, saying the
bank takes its commitment to the community seriously.

Steven Antonakes, senior deputy commissioner for the
Massachusetts Division of Banks, said the state has in
the past compared the fees charged by check cashers
and the lowest-cost bank accounts, and found check
cashers to be more expensive.

"We haven't heard that people are going to check
cashers. I hope that's not the case. For the average
person to go to a check casher, they'd be paying far
more than if they go to a bank," said Antonakes. The
state hasn't compared the fees since the
Fleet-BankBoston merger, but plans to do so soon, he