Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Real Reason The Poor Go Without Bank Accounts

theatlanticcities.com

Post reply on HN
Print view View original

11–20 of 232 posts

Re: The Real Reason The Poor Go Without Bank Accounts

#11

Post by rdtsc »

I can understand this. My mother in law was sick for a while and in a hospital for a few months. During that time she was late on one of her mortgage payments, which she as been faithfully paying for 2 decades. She also took an equity loan to remodel her house. Because of the missed payment they cancelled her equity loan. She went to the bank to talk to them hoping they would understand, but all he heard was how his "hands were tied". She tried telling them she was a customer for years, she had a number of accounts with them, mortgages, car loans from the past, she even paid extra on her mortgage payments often. She explained her medical condition hoping they would understand, but all to no avail. He kept hearing about how all these rules and triggers are automated in the "system" and nothing could be done.

She lamented the time when banking was a personal experience just like the article wrote. You went your teller, you'd known for years, they'd ask about your kids. The manager migth know you, might send you a birthday card and so on. I can see how she would be a person willing to pay $5 per check just to get back that personal touch.

The article also touched on this, but many people who are poor also don't happen to see a lot of human kindness, sometimes fake customer service kindness is better than nothing, they don't even mind paying extra to get it.

Re: The Real Reason The Poor Go Without Bank Accounts

#12

Post by code_duck »

gregpilling wrote: post #2

This comment on the article reflects why many people that I have met personally do not have checking accounts or bank accounts. They are worried about having money seized. From the comment section of the article - "If you would really like to know why poor people regular these establishments I'll tell you why: it's because they keep you off the grid. I used to have a checking account too all my life. But after I lost…

I was talking to my girlfriend last night and she mentioned how her ex-boyfriend doesn't have a bank account. He's actually well off financially, so I wondered why. Indeed, the answer is to avoid wage garnishment for child support.

Re: The Real Reason The Poor Go Without Bank Accounts

#13

Post by cryptoz »

notahacker wrote: post #10
pekk wrote: post #6

Earlier quoted context omitted.

I assume this is talking about child support payments ordered during divorce proceedings?

Not having any paper trail to attract the attention of people and organizations you owe money to is arguably the only rational reason for being unbanked in an urban area of a developed country.

I disagree very strongly with that. Here are a few rational reasons that someone may choose to not have their money in a bank:

- Moral conflicts. Most banks use your money for purposes that many people consider evil, so choosing to not give them your money is a rational choice.

- Lack of trust. Many banks over the last century have run out of money and been unable to honour withdrawal demands/requests. It's reasonable and logical not to trust them to keep your money and give it to you when you ask.

- Inconvenience. If you don't have very much money, having a bank account is a drain on your resources (fees, mostly) and your money is not immediately accessible.

There are plenty of other reasons, too. Running away from people you owe money to is certainly not the only rational reason for not having a bank account.

Re: The Real Reason The Poor Go Without Bank Accounts

#14

Post by code_duck »

EwanG wrote: post #3

So basically the check cashers have become more like banks, and folks who are short on human interaction value that more than the extra couple bucks a monolith that pushes you to an ATM (that may charge you extra for your withdrawal as well) costs. Wonder if any banks will see this as a proper wake up call...

Considering they're making record profits and if not, seems they can always turn to the government for a few billion... Probably not.

http://mobile.reuters.com/article/idUSBRE97S0O520130829?irpc... "U.S. bank industry profits hit record $42.2 billion in second quarter"

Doesn't sound like an industry desperate to squeeze more pennies from paupers. They have much better ways to do that than urban branch banking.

Re: The Real Reason The Poor Go Without Bank Accounts

#15

Post by rayiner »

I'd imagine another reason is they need the certainty of having their money be there. My wife had an account she didn't use since college, and apparently she fell below a balance limit and they charged a $5 fee, which overdraw her and turned into a $35 overdraft charge. Inconvenient for us, potentially a disaster for someone scraping by.

Re: The Real Reason The Poor Go Without Bank Accounts

#16

Post by notahacker »

bgilroy26 wrote: post #8

It's a tough situation, it has a lot to do with momentum. If these check cashers had profitable local ventures to invest in, they could hold deposits and pay out interest. Because there isn't a lot going on in the area, a deposit/commercial bank isn't interested in the area and in turn, business people in the area do not have as many local sources of capital. In place that need it, entrepreneurship would lead to a ri…

We're talking about the US in the twenty-first century: profitable local ventures can borrow money at low interest rates from non-local commercial banks at much better rates than the check cashers could possibly offer.

The check cashers don't offer deposit accounts because they couldn't possibly invest their received funds well enough to pay interest after covering the overheads of managing many tiny retail bank accounts with constant withdrawal demands, and their customers are far happier paying a fat commission to get cash than now than a bank account fee to get it later.

Re: The Real Reason The Poor Go Without Bank Accounts

#17

Post by bradleysmith »

notahacker wrote: post #10
pekk wrote: post #6

Earlier quoted context omitted.

I assume this is talking about child support payments ordered during divorce proceedings?

Not having any paper trail to attract the attention of people and organizations you owe money to is arguably the only rational reason for being unbanked in an urban area of a developed country.

no slack in your income, and $35 overdraft fees are unarguably rational motivators to avoid big-box banking.

Re: The Real Reason The Poor Go Without Bank Accounts

#19

Post by woofyman »

cryptoz wrote: post #13
notahacker wrote: post #10

Earlier quoted context omitted.

Not having any paper trail to attract the attention of people and organizations you owe money to is arguably the only rational reason for being unbanked in an urban area of a developed country.

I disagree very strongly with that. Here are a few rational reasons that someone may choose to not have their money in a bank: - Moral conflicts. Most banks use your money for purposes that many people consider evil, so choosing to not give them your money is a rational choice. - Lack of trust. Many banks over the last century have run out of money and been unable to honour withdrawal demands/requests. It's reasonabl…

USA banks are federally insured, so there's no risk in losing your money.

Running away from creditors is not a valid reason. They can sue you. They can't directly take your money.

Re: The Real Reason The Poor Go Without Bank Accounts

#20

Post by rwmj »

code_duck wrote: post #12
gregpilling wrote: post #2

This comment on the article reflects why many people that I have met personally do not have checking accounts or bank accounts. They are worried about having money seized. From the comment section of the article - "If you would really like to know why poor people regular these establishments I'll tell you why: it's because they keep you off the grid. I used to have a checking account too all my life. But after I lost…

I was talking to my girlfriend last night and she mentioned how her ex-boyfriend doesn't have a bank account. He's actually well off financially, so I wondered why. Indeed, the answer is to avoid wage garnishment for child support.

I wonder what the mother and child think of this arrangement?
Post reply on HN