DISSENT ON BANK CHARGES
A number of readers have written to disagree with the particulars of my post on California's bill to ban paycheck-cashing fees at banks. (Nobody seems to disagree that California is regulation crazy.) In the interest of equal time, here's reader David Lonborg's note:
It's hard to argue with your general point that California is a rough place to do business, but I don't think the paycheck legislation is an example. If I'm reading the story correctly, the legislation is directed only to checks cashed at the banks on which they're drawn. The idea of a check is that it's a _negotiable_ instrument: instead of paying what I owe you in currency, I give you a piece of paper that orders my bank to pay you that amount. If I owe you $100, and I give you a check drawn on Wells Fargo for $100, you have a legitimate gripe if Wells Fargo only pays you $95 when you present the check.
I'm inclined to think that the bill is directed at the wrong target. It looks to me like the current law quoted in the article would give employees a good claim against their employers, and that should give the employers ample reason to do whatever's necessary to clarify the banks' understanding of "negotiable." But your post is off-base. There's no cost-shifting issue, because the relevant customer is the one who's issuing the check (an order to the bank to pay money), not the one who's presenting it. The bank is already well-positioned to put those costs where they belong.
I agree that if there's a problem, it's between the employee and the employer, not the employee and the bank. But I can imagine the shrieks of protest that would emerge from the tax authorities of California if employers started paying in cash. In 2004, money is something that goes through banks, for a minor charge. You can, of course, always get a bank account yourself, and have cash available 24 hours a day for free--contrary to the bad old days when I was a poor college student and used to pay 50 cents to cash a $25 check.