New York Caps Check Cashing Fees, Eliminates Annual Hikes

New York’s financial regulator capped check cashers’ fees charged for processing public benefits, paychecks and other payments, a move to eliminate an industry practice that disproportionately affects consumers from underserved communities.

The rule, finalized by the New York Department of Financial Services on Wednesday, also eliminated inflation-adjusted automatic annual increases of check cashing fees. New York was the last state in the US to allow such automatic fee increases for check cashers.

Fees for cashing federal or state government-issued checks—including Social Security, unemployment and Veterans benefits—are capped at 1.5% of the total value of the payment. Fees for cashing ...