To the delight of some bankers, Massachusetts' top ban-king regulator has restricted the ability of a Boston check-cashing company to expand.

Thomas Curry, acting banking commissioner, used a new state law to reject a license for an All Checks Cashed office in the city's Dorchester neighborhood.

He said the company failed to prove a community need, as required by the new law.

The action follows protests over the store by U.S. Rep. Joseph P. Kennedy 2d, D-Mass., and state banking committee co-chairmen Sen. Paul White and Rep. James Brett.

'Legitimate Concern'

Some bankers were quick to applaud the commissioner's move.

The decision will stop "any fly-by-night from opening up a check-cashing store," said Richard B. Grane, president of Hyde Park Savings Bank, which is located near a check-cashing store. "They have to be regulated, particularly if they get into anything besides cashing checks. If they weren't regulated or controlled or audited in some way, that could be abused."

"There is legitimate concern about these facilities and very close regulatory scrutiny is therefore certainly merited," said Robert Fichter, spokesman for the Massachusetts Bankers As-sociation.

Overcharging Claimed

Bankers, politicians, and community groups in Boston have criticized check-cashing stores, claiming they overcharge customers, take advantage of people who may not understand banking, and hurt the neighborhoods in which they operate.

The new law requires that check-cashing stores charging more than $1 per check must be licensed and must prove a community need for the store.

The ruling means that All Checks Cashed cannot charge more than $1 for cashing any check at the Dorchester store. Other services that check cashers provide, such as selling stamps or lottery tickets or offering a place to pay utility bills, are not covered by the law.

The company is still operating the store, but plans to conduct a local survey to prove it has community support.

"It's already opened up," said Thomas DeKoven, vice president of All Checks Cashed. "It didn't open up to irritate people. It opened up because we thought there was a need for it. We thought that we would let the market decide."

The state approved four other All Checks Cashed stores in Boston.

New Requirements

The application was among the first to be rejected under the new state law, which took effect July 1.

In addition to requiring a community need, the law also authorizes the state to determine if the company is financially responsible and whether or not the company violated any laws.

Currently 11 states regulate the fees charged by check cashers, while another five require licenses.

Two more are considering minimal regulation, but not of fees.

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