Suresh Jandial, who owns nearly half of the Mission’s payday loan stores, knows high interest rates.
He landed in the United States during Jimmy Carter’s presidency, a time when the prime interest jumped to an historic high of 18.75 percent and bank loans to start a business were more than 20 percent a year.
In his home country, Jandial said, he had worked as a bureaucrat and held degrees in law and accounting, but in the United States, he ended up working for free as an accountant for seven months before his boss hired him.
“Give me the job and if I don’t prove it to you, don’t pay me,” the new immigrant told his prospective boss. The immigrant worked seven months without before he was offered a paid position.
“I have a personal philosophy that you have to start from somewhere,” he said.
When Jandial bought his first check-cashing store, United Cash-A-Check, in the early 1990s, there wasn’t much more than a Money Mart or two around to compete, he said. The territory was ripe for fringe finance and the industry, unregulated by state or federal laws, was picking up steam.
Nowadays, Jandial pays 20 employees and says he’s the largest salesman of Muni tickets in the city, a service which complements the check cashing, money wiring, money orders, and payday loan services at his stores. His six Mission-based businesses make up nearly half of the neighborhood’s 16 payday lenders.
Jandial accounts for his profits easily: half from check cashing, a quarter from money wiring, and about ten percent from payday loans. He estimated that 30 percent of payday customers don’t repay their loans and argued that the high interest rates were necessary to cover the losses. The Department of Corporations found that an average of 10 percent of the payday loans in California were not repaid.
Jandial charges $40 for a $260 payday loan, compared to the usual $45 fee at most fringe financial franchises.
Unlike the chains, Jandial said, he doesn’t accept customers from other cities, much less other states. The risk is too high, he said.
“Our mentality is if they’re cashing checks from San Jose, they can find a check cashing place over there,” he said.
He sees his business as a help to locals and regulars who need cash quickly. “If a customer wants $100 dollars, he doesn’t have to fill out any papers and we don’t check if he’s pre-approved,” said Jandial. He said most customers are blue-collar and take out payday loans for emergency situations, like paying off parking tickets or medical bills.
“Nobody can give them any money—not even their family–so they come to us,” he said.
There are big boons to being one of the few independently-owned fringe financiers in the Mission. Perched on multiple corners in the neighborhood, Jandial gets a heads up on available properties. While the Money Marts and Check’n’Gos scout vacancies from headquarters in other states, Jandial and his employees are on the ground.
While this helped him grow in the 1990s, Jandial said he hasn’t opened a new store in the Mission District in four years and has no plans to. “It’s not a good place to have a business anymore,” he said of the competition and the regulations. “Now everybody is selling the same thing—jewelry stores, phone cards, check cashing.”
Still, he prefers his business to retail.
“You don’t have to worry about how many boxes of sugar you have, or bottles of liquor,” he said. “But you have to keep a very close watch—it’s money. It can intimidate anybody. It can excite anybody. I studied all these businesses in my life and I found that check cashing is a better business.”
‘King of the Mission’ penetrated a world unknown to me, that of fringe financiers. I’m a resident of the Mission, where the bold yellow and red awnings of payday loan businesses mingle with fading dollar stores and glinting coffee shops. Cash-A-Check and similar businesses are a familiar sight, and I appreciated learning about its transactions–lending a helping hand and driving borrowers into debt.