PROFILE : ‘7-Eleven Banker’ Pays Civic Dividends

Sure, Thomas Nix Jr. is in the check cashing business. A business that caters to poor people. A business that earns a profit turning welfare checks into currency, and that takes advantage of the flight of banks from the inner city.

Nix sees nothing to be ashamed of. “We’re proud of what we do,” he says, sitting ramrod straight in his Spartan conference room at company headquarters in Carson. “We look at ourselves as just a bunch of good old folks who got together to meet a need.”

Still, aware of some of the image problems of his industry, Nix is earning goodwill through charitable activities--not just the time-honored route of giving out turkeys to the poor at Thanksgiving, but also by bankrolling a Mother’s Day weekend trip to San Quentin for women with sons and husbands incarcerated there. He gives annual scholarships at 19 inner-city high schools, and recently, Nix footed the bill for 50 billboards advertising an anti-violence campaign sponsored by the Southern Area Clergy Council.

Nix Check Cashing got a plug in the corner of the signs.

The Rev. Romie J. Lilly II, executive director of the council, says Nix is a responsible member of the community: “He’s open. He’s responsive. Not only does he talk but he’s putting his hard dollars to work.”

Nix says that contributing to community causes is good business. He liked the idea of funding mothers’ visits to their sons in prison. “When they return to our community, they have a better chance of returning to (a peaceful) life,” Nix said.

Nix says the 1992 Los Angeles riots were a galvanizing event for him and his staff. Many Nix Check Cashing stores were trashed and burned, and employees were trapped by gunfire at two locations. But they reopened quickly and all weekend long kept up desperately needed cash flow for people in devastated areas.

Telling how his employees showed up for work at 6 a.m. amid the smoking rubble, Nix blinks and shows a rare flicker of emotion. “It was an incredible testimonial to their dedication to their community and to our customers,” he said.

In conversation, Nix is all business at first, and intensely serious. But eventually, he begins to crack jokes and smile broadly. He tells about his hobbies: skiing, playing poker at local card clubs--and with his mother.

He says he does not like games that rely primarily on chance, such as blackjack or horse racing. Poker, he insists, is “not gambling, but a sport.”

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Nix says playing poker helps him hone his business skills: “It’s a very people-oriented game.” Poker is something like the check cashing industry: “It’s a game of reading people and circumstance.”

His enterprise, founded with his father, Tom Sr., in 1978, grew from an informal check cashing service at their South-Central minimarket into a chain of 30 stores in Los Angeles and 10 in Oakland. Check cashing stores like his are essential to the cash flow of poor neighborhoods in Los Angeles, transforming minimum-wage paychecks into millions of dollars in hard currency.

“We plan to work on the original Bank of America concept: being a bank for the working people,” Nix said.

Nix, 46, does business where many entrepreneurs fear to tread. The little yellow dots marking his check cashing stores on his marketing map cluster exclusively in parts of the city with median household incomes of $15,000 and under. On the boulevards of South-Central, the yellow signs of his Nix Check Cashing stores are as familiar as the golden arches of McDonald’s.

Nix admits that some shady operators helped give the check cashing business a bad reputation. But now, he says, “the negative image of the industry is unfounded.” Legislation he helped push has limited fees to prevent gouging.

Nix says his fees are fair. He charges $2.40 to cash a $100 check. That may seem high to people with enough money in the bank to get free checking. But for people in neighborhoods where the nearest bank may be a 30-minute, $2.10 bus ride away, it may not be a bad deal.

For people living so close to the edge they cannot wait until a bank clears their check, instant cash is worth a price. And Nix offers other services his low-income customers need--phone booths for international calls for people who do not have phones at home, and money orders to pay bills. They cost 39 cents at Nix compared to $3 to $7 at a bank.

Services like these, Nix says, make his stores “the 7-Eleven” of banking: Some may be a little pricey, but they are convenient.

Nix may operate out of a pin-striped suit, but he knows his market--the approximately 35% of Americans he says have no bank accounts. He grew up in working-class San Pedro, where his father was a baked-goods distributor. He was captain of the San Pedro High football team, married cheerleader Pam Harvey, “and lived happily ever after,” he said in an interview at the company’s headquarters, a nondescript building in a Carson industrial park. They have two sons, in high school and college.

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Nix’s father’s first business venture in South-Central was delivering bread.

“Some people still call us the bread store,” Nix said.

Tom Jr. worked 50 hours a week at his father’s next business, a grocery story on Firestone Boulevard near Alameda Street, while earning a business degree at USC.

Nix is not a hero to everyone. Many community activists say the rise of check cashing stores is a symptom of the community’s deprivation.

“Check cashing places don’t help our cause,” said Quinta Seward, co-director of Communities for Accountable Reinvestment, which is trying to get banks to provide services to poor neighborhoods. “Although (Nix) may be doing creative things . . . check cashing places exploit (the community’s) needs.”

But Darline Gavin is ready to vouch for Nix’s character. Starting out as a part-time bookkeeper at the grocery store 26 years ago, she is vice president of the company. “They are great people to work for,” said Gavin of Nix and his late father.

Gavin, who is African American, said Nix has provided opportunities for more than 250 employees in South-Central, 90% of whom live in the neighborhoods where he does business. Of the 31 branch and regional managers smiling in pictures on the wall, only one is white, and most are women.