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The Real Reason The Poor Go Without Bank Accounts

theatlanticcities.com

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Re: The Real Reason The Poor Go Without Bank Accounts

#101

Post by andrewflnr »

foobarbazqux wrote: post #95
sliverstorm wrote: post #89

Earlier quoted context omitted.

Oh, I wouldn't say that's an assumption so much as a premise upon which services etc are offered, because the people who move every week are both a pain to support and not a significant portion of the population. In other words, all of this is not brought about by myopia, but simple business decisions.

In a balanced society, the needs of businesses do not outweigh the needs of citizens.

Businesses are run by citizens, who have a right to choose which other citizens they're interested in serving.

Re: The Real Reason The Poor Go Without Bank Accounts

#102

Post by hfsktr »

stephengillie wrote: post #44
Geee wrote: post #33

Why is it exactly that online wire transfers aren't used in the US? As an European, I've not been in a bank since the 1990's, and never written or cashed a check. On the other hand, it's impossible to live without a bank account here. Your bank account is the only place you get paid to, whether it's salary or social security money. Also, you need it to pay your bills or transfer money to your friends.

To add another reason -- most Americans hear more about wiring money being used to defraud you out of your money than they hear about it being a useful financial tool. I have never heard any bank (or credit union) employee even mention sending money to another bank. Most banks won't even let us put money into another person's account without several pieces of information about the other person, and that person's perm…

Maybe because it's local (it's a credit union IDK how that is different from bank) but my bank lets me transfer my money to other accounts in their bank. Recently they even added that to their online services (it might have been there and I never noticed).

Transferring from them to BoA or another institution likely wouldn't work but I have no expectation that it would (at least not without meeting in person etc).

Re: The Real Reason The Poor Go Without Bank Accounts

#103

Post by a3n »

saurik wrote: post #80

I am not buying this; I agree that poor people not using banks is an issue, and I appreciate a number of interesting reasons why this is the case (the list iterated by patio11's comment is amazing): I do not, however, think it is because banks are turning into impersonal institutions with which you never interact with a person. Sure: this author doesn't generally interact with her bank. She doesn't see the need to, s…

Anecdote of one: I bank with Wells Fargo, I go inside the branch less than once per month, and I rarely see the same tellers or "bankers" (the ones that sit at a desk) from visit to visit. I think it's pretty high turnover. I don't know the reason, but I suspect it's because the bank is trying to sell me services like insurance, and there's pressure on bankers to make sales. It may also be because a teller or banker job is a young person's first career-like job, from which they move on and up as soon as possible.

In fact I hate it when I have to talk to a banker, I get annoyed when they try to sell me services that have nothing at all to do with what I went in for, or with why I'm a customer in the first place.

Also, I suspect because of turnover, they usually can't answer my questions when I ask. They just do not know the answer to "how do I do this particular bank-like thing" without researching and asking the branch manager. But man they do know all about their insurance products.

Re: The Real Reason The Poor Go Without Bank Accounts

#104

Post by rgbrenner »

arjie wrote: post #96
bradleysmith wrote: post #17

Earlier quoted context omitted.

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

Even that great Satan, Bank of America, allows you to disable overdraft 'protection'. It's what I do.

That was part of Obama's credit card reform in 2009. .. banks were required to offer it.

Re: The Real Reason The Poor Go Without Bank Accounts

#105

Post by capisce »

andrewflnr wrote: post #101
foobarbazqux wrote: post #95

Earlier quoted context omitted.

In a balanced society, the needs of businesses do not outweigh the needs of citizens.

Businesses are run by citizens, who have a right to choose which other citizens they're interested in serving.

A problem is when those big businesses prevent other smaller businesses from catering to the niche markets, through lobbying or other anti-competitive means.

Re: The Real Reason The Poor Go Without Bank Accounts

#106

Post by a3n »

To all those who state that it's irrational to be non-banked, remember two things:

1) Just as all the world is not a Vax, all the world is not you and your circumstances and acquaintances and anecdotes.

2) as the article briefly touches on, many people simply cannot get a traditional or even minimal/basic bank account because of entries in ChexSystems. These entries may be correct and current, or they may be old, or inaccurate, or not reflective of current circumstances. And banks are only too happy to outsource the expensive process of judgment and "knowing their customer." No banker ever got fired for following ChexSystems' recommendations (I assume).

Re: The Real Reason The Poor Go Without Bank Accounts

#107

Post by code_duck »

fiatmoney wrote: post #72
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…

It's also not unknown for a state you used to live in to suddenly decide you owe them a large amount of taxes, and take it directly from your bank account.

Last year, to attend a tradeshow I opened a sales tax account and Wisconsin. As I was engaged in extended travels afterwards, and made no sales taxable sales at the show, I did not file any returns with them. If course, they expect you to file each quarter even if to report zero sales.

When I returned it to my house nine months later, I found a wide variety of letters from them culminating in lien on my bank account for about $1500.

Why they decided that I would have $10,000 in sales that were taxable, given on my history of never having reported anything ever on a brand-new account, I have no idea. Strangely, others at the show who also failed to ever file did not receive liens.

Re: The Real Reason The Poor Go Without Bank Accounts

#108

Post by bilbo0s »

patio11 wrote: post #40

Some reasons which are cited in the literature, of which there exists lots ( http://www.kansascityfed.org/publicat/research/community/Unb... is a good entry point): 1) Many poor people mistrust banks, for reasons ranging from cultural ("Where I come from, they're far more likely to vanish with your cash than the mattress") to personal experience ("I was just going about my business one day but then I ran the account…

I only ever ASKED one poor person why they didn't have a bank account. A young mother of a student at a middle school I do work with. She has three kids and one month she was hit with fees for a) having less than a prescribed amount in her bank account. and b) writing a bad check. (Ironically, a check that was bad because of the fee taken for 'a').

Now for her, going to Walmart every month and putting her earnings on a prepaid card gives her everything she needs with little of the risk. And so that's what she does. It's not a "check cashing place" or "payday loan" place, but it is one of the places siphoning the poor from the banks. (My guess is that it's probably siphoning a lot of them too).

I think sometimes it's a little easy to lose sight of that single mother with three kids working a low end job. She really can't afford fees like that... though the fees may sound trivial to the middle class. When she gets home, she HAS to have food for her children. And among a lot of what you might term the "responsible single mothers", anything that would put their ability to do that at risk is, rightfully, eliminated.

Bank accounts, in their current form, are on the list of things that can put that at risk. And so, bank accounts are eliminated.

After that conversation, it was not clear to me that she had made a bad decision. I couldn't really question her priorities. A bank account was good for me... but maybe not for her. This is why I think that these sorts of decisions will be made more and more often by the poor. Because they only care about the ends, (feeding her kids). Not the means, (the bank account).

I guess I'm just saying that...

It wasn't clear to me that it was an... "...effing bad decision."

Re: The Real Reason The Poor Go Without Bank Accounts

#109

Post by sdolan805 »

My friend had $150k in his bank account that was taken by the IRS while they were still in negotiations on a huge tax bill. No notification, no nothing. He only found out after he was trying to buy groceries and his card was declined.

After it was all said and done he ended up owing the IRS ~$14k and they gave him a check for the difference, but it took months to get it all sorted out.

I lent him some money to get him through it, but what if he didn't have a friend to do that? He'd be kicked out of his apartment and starving.

Now he doesn't trust banks (not that it's the necessarily the banks fault). He keeps around a thousand in his bank for emergencies, and keeps the rest in cash (at an undisclosed location :)).

It goes to show that even people with a reasonable amount of money have reasons to keep their money out of banks.

Re: The Real Reason The Poor Go Without Bank Accounts

#110

Post by sliverstorm »

capisce wrote: post #105
andrewflnr wrote: post #101

Earlier quoted context omitted.

Businesses are run by citizens, who have a right to choose which other citizens they're interested in serving.

A problem is when those big businesses prevent other smaller businesses from catering to the niche markets, through lobbying or other anti-competitive means.

Then combat the lobbying or other anti-competitive antics. The last time we tried to force business to operate in the wrong market, we told banks to lower their lending criteria and look where that got us.
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