Banking:

Government Check Cashing Issues

T-GGD-88-35: Published: May 18, 1988. Publicly Released: May 18, 1988.

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GAO discussed U.S. Treasury check recipients' difficulties in obtaining access to check cashing services. GAO noted that: (1) about 86 percent of banks and 55 percent of thrift institutions cashed government checks for nondepositors; (2) about 56 percent of the banks and 84 percent of the thrifts cashed the checks free of charge; (3) the median fee among banks and thrifts that charged was $2; (4) consumer groups' studies generally cited more limited access to check cashing services; (5) banks cited unreimbursed costs, facility congestion, and potential fraud as reasons for not cashing checks; (6) 7 million families without bank accounts received at least one government check; (7) 82 percent of families without bank accounts had incomes under $20,000; and (8) individuals cited cost and inconvenience as reasons for not having bank accounts. GAO believes that proposed solutions should target those individuals truly experiencing difficulty cashing government checks.

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