The most profitable source of income for banks? Overdraft fees • Hacker News Board

Re: The most profitable source of income for banks? Overdraft fees

#111

Post by fredkbloggs » Tue, Aug 25, 2015, 1:58 AM UTC

mbrameld wrote: post #70

fredkbloggs wrote: post #44

Earlier quoted context omitted.

Couldn't wait until the next day to make the purchase? Couldn't use cash or a credit card instead? You're an adult. You're obviously literate or you couldn't be posting here. Unless these fees were not disclosed to you (a MAJOR breach of the law if true), you had every opportunity to know that this would occur and to prevent it. Try taking responsibility for your own actions.

You can't imagine a scenario where a responsible adult has had a checking account with a balance over $5000 for many years and has never run in to the charge for dropping below that level, eventually forgetting about that $5 fee? Now if you managed to picture that and believe it's possible for a responsible adult to forget about an obscure fee his bank has never charged him before, try to imagine your home's AC goes…

I'm trying to provide something other than Progressivist claptrap, in the desperate hope that some young people will read this and understand that there's more than one viewpoint in the world, and that some of them actually treat people like human beings rather than victims.

As for the substance of your complaint, I do not agree. Yes, I can certainly imagine various excuses. I can also imagine accepting that mistakes often have consequences, and that being $55 poorer is a rather modest one, all things considered. It's fine to curse a little and be upset. It's fine (good, even!) to change banks afterward. But the level of hatred and entitlement in this thread is simply not justified by the balance of behavior.

Re: The most profitable source of income for banks? Overdraft fees

#112

Post by MBCook » Tue, Aug 25, 2015, 1:58 AM UTC

nulltype wrote: post #86

mbrameld wrote: post #47

Earlier quoted context omitted.

Why do you think it should be?

I guess the counter question is why is USAA only available to military members?

Basically a values thing that they are dedicated to military personnel and their families. Some of their products are open to everyone (IIRC), but most are limited to military, spouses, and immediate family.

From Wikipedia:

USAA was founded in 1922 by a group of U.S. Army officers to self-insure one another when they were unable to secure auto insurance because of the perception that they, as military officers, were a high-risk group.

Re: The most profitable source of income for banks? Overdraft fees

#113

Post by themartorana » Tue, Aug 25, 2015, 1:58 AM UTC

Touche wrote: post #36

selectodude wrote: post #28

Earlier quoted context omitted.

The charge should be declined, no different than a credit card. Allowing it to go through and then charging usurious fees is wrong.

Fine, say it's wrong. Don't say it's a "tax". You have no choice with regard to taxes; you have a choice to not overdraw your account.

What is the purpose of being so overly pedantic? It's all over this thread.

"A rose by any other name would smell as sweet..."

Re: The most profitable source of income for banks? Overdraft fees

#114

Post by tdfx » Tue, Aug 25, 2015, 1:59 AM UTC

Touche wrote: post #43

Bud wrote: post #34

Earlier quoted context omitted.

No. Emphatically, no. It IS robbery. Have you ever been a poor person? Have you ever been overwhelmed with depression and the panic of a lost job, a few dozen bills you probably can't pay, the shame of asking friends and relatives for help, and in so doing, risking your relationships with those people and your own self-esteem? What you're missing here is that poor people KNOW that they are poor and right on the edge.…

> No. Emphatically, no. It IS robbery. Have you ever been a poor person? Yes, I overdrew my account when I was in college and had $50 to my name. It was my mistake, I made a purchase unsure of how much money I had. I also used to work for a bank that gave out RALs so I'm perfectly aware of the unethical behavior that happens in banking. So call it unethical, call it what it is. Using inaccurate alarmist language does…

As a college student, I am assuming that you didn't have much money, but also likely had rather limited expenses. To the family with children that has $50 to their name, a rent payment, childcare expenses, etc, most of which they can barely afford already, an unexpected overdraft can be the trigger that sends them off a financial cliff.

Poor people often make very bad financial decisions. But so do rich and middle class people. The difference is that the poor people have no one to turn to for help. Exploiting that may not fit the statutory definition of robbery, but it meets it in every other way I can think of.

Re: The most profitable source of income for banks? Overdraft fees

#115

Post by rcarrigan87 » Tue, Aug 25, 2015, 2:01 AM UTC

pyre wrote: post #67

Touche wrote: post #20

Earlier quoted context omitted.

> They know exactly what they're doing. They're rich bankers robbing poor people. I can understand thinking that the "correct" thing to do here is to simply not allow a transaction when there aren't sufficient funds, but this language goes overboard. It's not robbing a person because they were unable to keep track of how much money they own and adjust accordingly.

Large banks will do things like structure charges so as to extract the maximum amount of overdraft charges. For example: You have $40 in your account. You spend $20, then $12, then $5, then $120. One would logically conclude that at the end of the day, the bank will resolve these *in order* and you will have a single overdraft fee. Large banks *cough* Bank of America *cough* will explicitly structure those charges to…

I've personally experienced this, so frustrating!

Re: The most profitable source of income for banks? Overdraft fees

#116

Post by bedhead » Tue, Aug 25, 2015, 2:01 AM UTC

fideloper wrote: post #95

bedhead wrote: post #62

Earlier quoted context omitted.

No, it's the same system that allows the lottery to exist. It's not "fuck the poor", it's "fuck the stupid" (alternatively, "fuck the bad-at-math"). If there's a high correlation, I don't think anyone is going to be terribly surprised, as uncomfortable as that may be. I have been poor. I have also been the opposite. I have also been a bank employee, and a professional investor who studied security analysis by looking…

Sounds like victim blaming. To an extent you're right, but the situation is not at all this black and white (like anything in reality). Take for example just the fact that it's easy to lose track of your current savings especially without ready access to the internet, a common situation for the low income.

Yes, it's is 100% victim blaming, because for god's sake, at what point do we expect grown adults to take some friggin responsibility for themselves?? Puh-lease, spare me the "easy to lose track" garbage. It's never been easier to keep track of one's finances, and that's before even considering an internet connection. If your budget is that tight, maybe, just maybe, actually closely tracking your bank account should be a priority, no??? One would think. God knows that's how I was when I had almost nothing to my name.

I don't like the banks playing games with this stuff and I'm glad most (but not all) of their bs got stopped. But my god, when are we going to hold adults accountable for just basic life skills instead of insulting and coddling them? Ever??

Re: The most profitable source of income for banks? Overdraft fees

#117

Post by Karunamon » Tue, Aug 25, 2015, 2:01 AM UTC

danharaj wrote: post #88

Karunamon wrote: post #63

Earlier quoted context omitted.

And the best part is, you're being downvoted for this.. I dunno, apparently a lot of HN thinks that it's impossible to believe that banks are generally run by bastards while simultaneously believing that 99% of these instances are completely voluntary and completely avoidable? If you keep track of what you're spending your money on, it's not a problem you're gonna have to ever deal with - and I say this as someone th…

It's probably because people usually grow out of the stage of political awareness where one imagines human beings to be atoms that aren't connected to one another. If you think that 'personal responsibility' or whatever allows you to judge someone as stupid, inferior, or deserving of misery, then you will have a bias that makes you see people as individuals cut off from all social and economic context because it give…

You seem to know an awful lot about my worldview based on nothing more than a statement of the completely true fact that these wounds are almost entirely self-inflicted.

"Minefield"? "Don't spend money you don't have available to spend, otherwise bad things will happen" is a principle that most people are taught as children.

You seem to conflate the ideas of personal responsibility and the idea of deserving whatever gets thrown your way. We can talk about how crappy the idea of overdraft fees are all day long, but at the end of the day, it comes down to "doctor, it hurts when I do this", the response to which is "don't do that, then." The mechanism of the pain might be the result of a bad actor, but it's still your fault for inflicting it in the first place.

Re: The most profitable source of income for banks? Overdraft fees

#118

Post by kelukelugames » Tue, Aug 25, 2015, 2:02 AM UTC

eru wrote: post #17

some-guy wrote: post #12

About five years ago I worked at Wells Fargo as a teller while in college. During that time Congress passed a law prohibiting debit transactions from going through if there weren't enough funds in the account. Shortly after that we were told to start telling our customers about a new service called Debit Card Overdraft Service which was marketed as a "convenience" for customers when they were in a bind. When I asked…

I guess the moral of the story is that ethical complaints should be anonymous?

The moral of the story is to gather evidence.

When you go report something to HR, the HR rep always writes things down on paper. Why do they do that? In case things go to court.

Write down on paper what everyone says. Otherwise is your word vs the manager's. Employees will not win in a case of he said she said.

Re: The most profitable source of income for banks? Overdraft fees

#119

Post by Steltek » Tue, Aug 25, 2015, 2:05 AM UTC

Touche wrote: post #36

selectodude wrote: post #28

Earlier quoted context omitted.

The charge should be declined, no different than a credit card. Allowing it to go through and then charging usurious fees is wrong.

Fine, say it's wrong. Don't say it's a "tax". You have no choice with regard to taxes; you have a choice to not overdraw your account.

Exactly what kind of choice is it if banks aggressively pursue strategies to make it impossible to determine if you have sufficient funds in your account? "You have a choice to go through Door A or Door B. One door will brutally kill you, the other has pizza and ice cream." There! Aren't you happy? You have a choice!

Re: The most profitable source of income for banks? Overdraft fees

#120

Post by fredkbloggs » Tue, Aug 25, 2015, 2:05 AM UTC

rev_bird wrote: post #78

fredkbloggs wrote: post #30

Earlier quoted context omitted.

> These types of fees have been especially egregious in recent years, because the bigger banks have had their traditional revenue sources drastically capped/reduced (interchange & interest spread). Maybe the lesson is that over-regulation and financial repression aren't so good for the people. These guys are going to make money somehow. You can create a system that allows them to do so with minimal harm while providi…

This seems like a politically motivated conclusion -- I just can't find any evidence that it's necessarily true. I really can't see how "over-regulation" is the cause of banks behaving badly -- their core business is ostensibly to charge interest, right? That's still legal and, in the US at least, loans (for school, homes, etc.) are an almost celebrated social rite of passage. I just can't look at banks knowingly scr…

It's pretty obvious that banks do not act in the public interest. I'm not sure why anyone would expect them to. They are for-profit corporations and they will do everything within the law to increase those profits.

The US regulatory strategy with respect to banking is to limit the interest they can charge (often to a level below break-even), limit the set of customers to whom they can make loans, limit the terms on which loans can be made, require them to do business with a particular central bank that does not pay interest, require them to hold a certain amount of capital in forms that you dictate, prohibit them from charging fee A, then when they start charging fee B (legally) instead, prohibit that too.

Under the circumstances, I don't see why anyone should be surprised or upset that they then stop charging fee B and start charging fee C instead.

If you want the government to do something that would actually help people, you should be looking at all the laws that effectively prohibit the use of cash. Or the laws that in many states require doing business (with fees!) with a bank in order to get paid, or to take advantage of public assistance programs. Start by accepting that banks are not charities; they are never going to act the way you would like. What you can do is to give people good options that don't involve banks at all, then let the market sort it out. When you force people into banks, you're setting yourself up for disappointment. You will never be able to regulate away every last way to make a profit, and if you did manage to do so then you would rapidly find yourself without the ability to conduct any transaction -- because you've legislated everything into the banking system (where you can watch it and dictate to everyone in world). It just doesn't work.