This is a sidebar to this week's feature, "Eaten Alive"
In October, Hurricane Katrina evacuees Shanita Johnson and Lionel Bara received a $2,300 check from the Federal Emergency Management Agency. They couldn't find a branch of their bank near their apartment in Houston, so they went to ACE Cash Express, which cashes FEMA checks for a 5 percent fee. In Johnson and Bara's case, that meant more than $100.
The couple balked; eventually they managed to deposit the check directly into Johnson's bank account. "The bank don't charge you," Bara says.
Other evacuees haven't been as lucky. Lacking time, transportation and resources in the wake of the hurricane, an unknown number of people have relied on expensive financial service companies -- considered predatory by many consumer groups -- to fill crucial needs. By some indications, the role these businesses played has been substantial.
ACE Cash Express, with 92 stores in Houston, appeals directly to evacuees with posters in its windows that say, "FEMA and government checks cashed." An ACE spokesman didn't return a call from the Houston Press. Still, a clerk in the company's downtown outlet on Fannin Street says business from evacuees was brisk immediately following Hurricane Katrina.
In part, FEMA policies created a demand for ACE's services. Unlike the American Red Cross, which distributed money to evacuees on preloaded debit cards that could be used at any ATM, FEMA issued funds via wire transfers or checks. Yet depositing those checks into New Orleans banks, which were closed after the hurricane and often lack branches in Houston, could be tough. Enter check cashers such as ACE.
FEMA has never dissuaded evacuees from using expensive check cashers. "We don't endorse particular contractors," says spokesman Charlie Henderson.
Some banks directed their own appeals to Katrina evacuees. Several with branches in Houston sent representatives to the city's South Loop Disaster Recovery Center to help evacuees open new accounts. Bank of America provided free check-cashing services to anyone with a valid social security number. However, those outreach efforts ended a few weeks after the hurricane, a FEMA representative says.
Check cashers aren't the only companies to profit from Katrina evacuees. Furniture rental companies such as Rent-A-Center and Aaron Rents are raking in business. Rent-A-Center's corporate phone line includes an extension specifically for hurricane victims. An August press release from Aaron Rents, after pegging Katrina-related store damages at $10 million, cheerfully notes the company's past experience with storms: "Our business picks up three to six months after the storm occurs as customers, many with the aid of government assistance, return to homes and need replacement furnishings."
Reactions among evacuees were mixed. "Margie" (who asked that her real name not be used) says FEMA told her that she would have to wait up to five weeks for government-issue emergency furniture. Meanwhile, her elderly father had no place to sleep. So Margie rented a bedroom set for $20 per week from Rent-A-Center. While she was in the store, she also picked up a computer to help apply for government aid online. She's renting it for $15 per week until she pays off the $389 purchase price.
"I didn't have a problem with them," she says. "I can't speak for everybody, but it serves a purpose that I needed it for. And they did deliver the computer to the hotel, and there was no extra charge for delivery."
But other evacuees say they were staying away from the rent-to-own companies, figuring that whatever they bought would end up costing them double what it should. "They're not helping you; they're robbing you -- without a gun," says Betty LaGarde Minor, who is pondering whether to return to New Orleans.
Aaron Rents and Rent-A-Center employees didn't return calls from the Press.
Get the This Week's Top Stories Newsletter
Every week we collect the latest news, music and arts stories — along with film and food reviews and the best things to do this week — so that you’ll never miss Houston Press' biggest stories.
- Cougars Easily Dismantle Navy, Win 52-31
Sun., Nov. 29, 5:00pm
Mon., Nov. 30, 7:00pm
Wed., Dec. 2, 7:00pm
Wed., Dec. 2, 7:00pm
- Legendary UH Coach Guy V. Lewis Dies at Age 93
- Saints-Texans — Four Things to Watch For