Check cashers seek to reverse tawdry image.

CHICAGO - Tired of being defiled and denigrated from city hall to Capitol Hill, owners of check cashing outlets have decided to fight back.

The industry is mounting an aggressive campaign to combat the notion of check cashers as price gougers preying on inner-city residents.

Officials of the National Check Cashers Association, the industry's trade group, laid out their new strategy to almost 1,000 members at its annual meeting here earlier this month.

Public Relations Effort

The group has hired the public relations firm of Burson-Marsteller to convince the public that check cashers are meeting a genuine need in the community, not feeding off the poor.

"If you say the big lie loudly enough and often enough, people begin to believe it," said Jerome Gagerman, president o Financial Clearings Inc. in Chicago and outgoing chairman of the National Check Cashers Association. "And we have gotten tired of hearing the big lie."

Fraser P. Seitel, senior counselor for Burson-Marsteller and former spokesman for Chase Manhattan Bank. is leading the campaign. Check cashers need to present their industry as a legitimate alternative to the banking sector, one that focuses on convenience and service, he said.

"If the industry remains silent. turns the other cheek. this will just encourage critics," Mr. Seitel said.

|Proactive' Approach

Under his aegis, the trade group has begun coaching members on taking a more proactive stance with legislators and the public. At the conference, he led a workshop on how to respond "when the man from Sixty Minutes is at your door."

He also described the growth of "an uneasy alliance" with the American Bankers Association. And he's redesigned the group's logo - adding a new phrase "financial services for America's local communities."

As the fastest-growing segment of the financial services industry, check cashers face increasing scrutiny. Congress is considering subjecting the industry to licensing and capital standards.

And as the Clinton administration has focused on community lending, administration officials and regulators have taken a hard line against the industry. They view currency exchanges as evidence of the banking industry's failure to serve poor areas.

Image of |Scavengers'

In fact, it's hard to find anyone with a kind word about check cashers.

"They are the scavengers that come in to clean up after the financial disinvestment of poor neighborhoods," said Deepak Bhargava, a lobbyist for the Association of Community Organizations for Reform Now.

"My view of it is, if we can't get rid of them, let's regulate them."

The industry includes both mom-and-pop outlets and giants. The trade association estimates that there are about 4,500 outlets that cash $150 million checks annually with an aggregate face value of more than $45 billion.

Ace Cash Express of Irving, Tex., the nation's largest check cashing corporation, has almost 300 stores and earned $1.5 million last year.

Like a 7-Eleven

The industry wants to be perceived as the 7-Eleven of the financial services industry: a full-service center, conveniently located in both inner cities and suburbs, that is open long hours.

And the industry wants to be seen not as competition for the banking system but as a complement.

"Seventy percent of our customers already have a bank account," said Raymond C. Hemmig, chairman of Ace. "They have chosen to utilize my services purely as a convenience."

Some check cashers liken their relationship with bankers to that between corner markets and big grocery stores.

"Complaining about check cashers would be like saying, there's another 7-Eleven, so I guess the A&P nearby isn't doing its job," said Stephen Wolf, head of Pay-O-Matic Corp. in New York and new chairman of the trade group.

Some check cashers even see room for a growing affiliation with banks. Phil Corwin of the ABA addressed the conference, signaling a major move forward in relations between the industries, check cashers said.

"Banks believe check cashers occupy a very legitimate niche in the financial services market," Mr. Corwin told them.

Industry leaders say currency exchanges can help banks reach out to inner-city neighborhoods.

But some banks have already moved beyond alliances. Both Union Bank and First Chicago have opened their own check cashing outlets in low- and moderate-income areas.

But check cashers would prefer to see cooperation rather than competition.

"Banks need to have arms and legs in urban areas. And we can be that," Mr. Wolf said.

Print Shirts and Ponytails Set

Freewheeling Tone at Meeting

CHICAGO - A convention of cheek cashers held Oct. 10-11 looked a lot more like America than a convention of bankers.

Members of the industry vary tremendously by shape, size. sex, and ethnic background. The carefully coiffed sat side by side with the bearded and even the ponytailed. Dark suits were almost outnumbered by shiny, multipattern shirts.

Check cashers smoke more than bankers, and laugh more. too. They're less inhibited, less reluctant to speak out, and lay their thoughts on the line.

And they carry around a lot of cash. One pulled out a wad of crisp new bills - and counted out $500 - to pay for registration.

Souvenir Counterfeit Detector

Handouts included the Smart Money Counterfeit Detector Pen: The color of its ink tells you whether a bill is real or fake.

Throughout the convention, cheek cashers shared a few tips on improving relationships with bankers: First, borrow money when you don't need it.

"It forces you to go in and bare your," said Dennis Bassfod, president of Moneytree Inc.

A second piece of advice: Find out what community and charitable events your banker is involved in, and follow along.

"The more warm, fuzzy, human relations you can have with your banker, the better," said Jeff Voss, CEO of Check-X-Change Corp.

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