New Ordinance Just Needs Final OK : Border Money Exchanges to Be Licensed

Hoping to protect consumers from shady business practices and to clean up the clutter of signs outside San Ysidro’s money exchange houses, the San Diego City Council on Monday approved a regulation requiring operators to be licensed by police.

Under the new ordinance, which must receive final approval in two weeks, operators will be required to submit to a background check for criminal records and must show the true net exchange rate between the dollar and the peso on their signs.

The latter requirement is an effort to prevent some exchange house operators from taking hidden commissions in the transactions, which can involve hundreds of thousands of pesos. District 8 Councilman Bob Filner, who pressed Monday for adoption of the ordinance, said it is in response to “complaints from consumers of alleged fraud and misrepresentation of actual rates people were subject to.”

But a former owner of a money exchange predicted that the new ordinance would backfire, forcing owners of the high-volume exchange houses to add service charges to stay in business when the ordinance’s reporting requirements slow down their operations.

Under the ordinance, the exchange houses will have to record each transaction and report them to the city monthly.

‘Going to See Increased Costs’

“When you get done regulating this industry, you’re going to see increased costs that are by necessity going to be passed on to the consumer,” said Marvin Carpenter, who described himself as a former exchange owner.

The ordinance requires that exchange houses meet all building, zoning and sign requirements imposed by the city before police issue a license, which Filner considers crucial as San Ysidro Boulevard--home to many of the exchange houses--is widened and the community is redeveloped.

The city manager’s office believes that 32 of the 107 exchange houses currently holding business licenses will be forced out of business because they are not in zoning compliance.

The new ordinance also drew opposition from other exchange operators, who said that unemployment will rise when some of them are forced out of business.

The ordinance, which will take effect 90 days after final passage in two weeks, was approved by a 7-1 vote of the council, with District 2 Councilman Ron Roberts opposed and Mayor Maureen O’Connor absent.