Pay-day lending and check cashing businesses are a familiar sight in many parts of Lake Highlands.

An increase in the number of locations in our community has many residents concerned.

LH Today recently learned of a new city initiative that's aimed at reducing customers' dependence on the services these lenders provide.

We sat down with Councilman Jerry Allen, District 10 Representative on the Dallas City Council, to get the full story.

LHT: Councilman Allen, we understand you're behind a project to reduce the number of check cashing and pay-day lending stores in Dallas. Can you share the details with us?

Allen: What I'm behind is raising awareness among "un-banked" consumers about the benefits of account ownership, which will hopefully excite them to inquire about opening new accounts. If this increased awareness causes the number of customers to go down at these stores, then so be it.

LHT: What exactly is an "un-banked" consumer?

Allen: An un-banked consumer is one who is outside the traditional financial service industry. It's estimated that 28 million adults in the U.S. do not have bank accounts – often because of mistrust, cultural and language barriers or a belief that by the time the bills are paid, nothing will be leftover to maintain their account.

LHT: Why not pass a law that simply does away with these pay-day lending and check cashing facilities altogether?

Allen: These businesses provide a service, and it's important to understand that they are legal. However, it should be noted that on average, a customer of a check cashing/pay-day lending store spends $800 a year for their services.

If we open 25,000 accounts in the first two years, which we will, then the program will be able to reduce the cash flow of these stores by $20,000,000. This will have a significant financial impact, with the end result being a reduction in the number of these businesses.

LHT: 25,000 seems like a lot of new accounts. How can you be sure of this estimate?

Allen: 25,000 is just a fraction of the "un-banked" citizens in Dallas. In September, 2006, San Francisco pioneered their Bank on San Francisco program and have opened over 30,000 accounts. It is estimated that San Francisco has only a quarter of the "un-banked" population that Dallas does.

Houston just recently started their program six months ago, and they've already been able to open over 30,000 accounts.