In 2004, BofA and Wells ran afoul of state labor officials by imposing fees for noncustomers to cash business checks. The California Labor Code requires that paychecks "be negotiable and payable in cash, on demand, without discount."
The banks insisted that their fees were permitted under federal law. But California employers using the banks for payroll purposes were still on the hook for ensuring that workers could cash paychecks "without discount."
Some large bank customers, including the city of San Francisco, were able to negotiate a waiving of the fee for employees. Other employers accepted the banks' offer of free checking accounts for workers.
WaMu's fee won't apply to checks drawn on business accounts. It will also be waived if a noncustomer brings the check to the check-writing customer's home branch. That's a bummer if your WaMu branch is in Encino and your buddy Bob lives in Torrance.
I asked Margolin-Feher how big a problem it is for noncustomers to clog up lines at branches.
"It happens a lot in certain areas at certain times of the month," she replied.
This was a red flag for ACORN's King. "It tells me that they've had bank managers calling to say they have long lines of undocumented workers trying to cash checks every few weeks," he said.
King speculated that employers of day laborers or other short-term workers may be writing checks on their personal accounts as a substitute for cash or for tax reasons.
If so, WaMu's fee would place the employers in danger of violating California's Labor Code.
"The employer would have a problem in such a case," said Robert Roginson, chief counsel for the state Division of Labor Standards Enforcement. "If we had any complaints about discounts being taken on paychecks, even when those checks are drawn on personal accounts, we'd look into it."
He said workers can call (866) 924-9757 for information in English or Spanish on how to lodge a complaint with state officials.
Margolin-Feher said the $5 fee in no way runs contrary to the bank's free-checking philosophy.
"Our objective is to serve our customers," she said. "We still offer tremendous value, we think."
Margolin-Feher also denied that the new fee had anything to do with the bank's financial difficulties.
"This has been under consideration for a long time," she said. "It's all about serving our customers better."
And getting rid of pesky noncustomers who have the gall to try to cash WaMu-issued checks. Whoo hoo!
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Consumer Confidential runs Wednesdays and Sundays and occasionally in between. Send your tips or feedback to david.lazarus@latimes.com.
