The Real Reason The Poor Go Without Bank Accounts • Hacker News Board

Re: The Real Reason The Poor Go Without Bank Accounts

#151

Post by morgante » Sat, Sep 21, 2013, 10:19 PM UTC

r0s wrote: post #112

morgante wrote: post #78

The meat of this article, hidden underneath all the fluff, is simply that fees are higher and poor people end up paying more of them. Honestly though, they probably deserve that. I've never in my life been charged an overdraft fee because it doesn't take much to just track the payments you make and never go over. Of course, an inability to plan is probably why they're poor in the first place...

> I've never in my life been charged an overdraft fee because it doesn't take much to just track the payments you make and never go over. That's easy to do if you're not poor. It's a problem you've never encountered, so don't pretend your virtue protects you. Obviously 'punishing' those with no money does nothing. It certainly doesn't prevent overdrafts. The only sane response to this (correctly identified) cycle of…

> That's easy to do if you're not poor. It's a problem you've never encountered, so don't pretend your virtue protects you.

I didn't always have money. My father is a carpenter, and I definitely took the time to write down every expense back when there was serious risk I might overdraft.

However, I must apologize for phrasing my original comment too harshly. People don't deserve poverty, but what I meant was that they're at least partially responsible for their situation.

As you rightfully point out, punishment certainly isn't the answer. (I certainly don't see overdraft fees as a sane punishment.)

But payday lenders and the like aren't the solution either. The solution is helping everyone to get the necessary planning skills for the modern world through education. It'd be great and truly refreshing to see a bank which tried to do that (obviously they'd have to find a different business model than the usual).

So, help people to learn to plan. Don't excuse not planning and the institutions (check-cashers, etc.) which enable it.

Re: The Real Reason The Poor Go Without Bank Accounts

#152

Post by belorn » Sat, Sep 21, 2013, 10:28 PM UTC

dalke wrote: post #142

belorn wrote: post #119

Earlier quoted context omitted.

The 8000 SEK/withdraw is only for ATM's located at the bank, and are been general dedicated to that banks customers. Bank ATMs has slowly been phased the last ~10 years with general ones (any custom of a bank can use them), and those has been spread out at malls and other similar places. Those however do not have an 8000 SEK withdraw limit, but rather around 1000-2000 SEK. ICA was one of the earlier adapters of those…

Hmm, somehow I forgot to include the ICA information in my previous reply. http://www.swedbank.se/privat/kort-och-betalningar/kort/om-k... says you can take out up to 8 000:- per time, and up to 15 000:- in any 7 day period. ICA's web site (just for reference, I have no real point here), at http://www.ica.se/ica-kort-bank/icas-kort/insattning-uttag/ says people with an ICA bank account can take out up to 3 000:- per…

The ICA link is about using one's ICA customer card for bank withdrawal while paying the cashier. Those ATMs I was referring to are separate machines in or outside the building.

When someone wants to withdraw more than the maximum per week, my guess is that the bank feels they need to ask questions to fulfill the requirements of the law from 2009 (http://www.penningtvatt.se/) that requires that bank to inquire the nature of the withdrawal. SVT had a story when the law was introduced, and their conclusion can be read in the Q/A at (http://www.svt.se/ug/chatt-om-penningtvatten).

I don't know what happens if you close your account, but my guess is that the law would still hold the cash in place.

Re: The Real Reason The Poor Go Without Bank Accounts

#153

Post by philwelch » Sat, Sep 21, 2013, 10:31 PM UTC

dylz wrote: post #52

maxerickson wrote: post #9

Earlier quoted context omitted.

Banks have significant flexibility. Capital One 360 (the former ING Direct) handles overdrafts by providing a line of credit. The fees there for short term over drafts are a few cents.

I'm actually somewhat curious, why does CapitalOne fuck everyone in their "traditional banking" over, but generally not screw with [ex?] ING Direct customers?

We have very high standards and would immediately abandon CapitalOne in droves if they fucked with us.

For years whenever people complained about banks I always said "ING Direct isn't like that". So far CapitalOne hasn't wronged us yet. I suspect it's because they just bought out the business and the same ING Direct people are still running it, and the CapitalOne people know to leave well enough alone.

Re: The Real Reason The Poor Go Without Bank Accounts

#154

Post by dalke » Sat, Sep 21, 2013, 11:16 PM UTC

belorn wrote: post #152

dalke wrote: post #142

Earlier quoted context omitted.

Hmm, somehow I forgot to include the ICA information in my previous reply. http://www.swedbank.se/privat/kort-och-betalningar/kort/om-k... says you can take out up to 8 000:- per time, and up to 15 000:- in any 7 day period. ICA's web site (just for reference, I have no real point here), at http://www.ica.se/ica-kort-bank/icas-kort/insattning-uttag/ says people with an ICA bank account can take out up to 3 000:- per…

The ICA link is about using one's ICA customer card for bank withdrawal while paying the cashier. Those ATMs I was referring to are separate machines in or outside the building. When someone wants to withdraw more than the maximum per week, my guess is that the bank feels they need to ask questions to fulfill the requirements of the law from 2009 ( http://www.penningtvatt.se/ ) that requires that bank to inquire the…

The ICA link was mostly to point out that your stated limit of US$100/occasion is too low, even for ICA. The ICA web site says the limit is over $400.

Thanks for the links! At the very least it helps me understand the relation between Swedish and similar US laws.

In the US, if you deposit or withdraw more than $10,000, or do transactions that appear to be done to get around the limit (like successive transactions of $9,999; so called 'structuring'), then the bank is obligated to file a report.

However, that report is filed in secret to the Feds.

It is possible for a US bank to freeze an account that they suspect it being used for laundering. That's different than having a teller decide on the spot if something is suspicious or not.

Are you aware of people who haven't been able to take money out of their account because they didn't want to tell the cashier why they were doing it?

Re: The Real Reason The Poor Go Without Bank Accounts

#155

Post by rattray » Sun, Sep 22, 2013, 12:01 AM UTC

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.

Businesses serve at the pleasure of their shareholders, and are under obligation to maximize shareholder value. They do not exist to serve whichever customers they feel most affinity towards.

Shareholders aren't always even citizens (can be foreign, can be other businesses).

Re: The Real Reason The Poor Go Without Bank Accounts

#156

Post by chimeracoder » Sun, Sep 22, 2013, 12:09 AM UTC

thaumaturgy wrote: post #114

HN is so cute. So many people here talking about why poor people do things the way they do without having ever really experienced it. Here's why poor people don't like banks: because banks don't like them. Let me paint you some pictures. You're not clean-shaven. You smell a little bit, whether because you just finished a smelly job or because you're living on the streets or because you're depressed and haven't bother…

> "I'm sorry, you're here in Chex Systems for account abuse at BigCorp Bank three years ago, we can't open an account for you."

> eventually I got into trouble with a bank

Could you elaborate on this? I'm very familiar with the CRAs and how they operate, FICO, etc., but I know very little about Chex. What kind of "errors" do these entail?

I'm not asking about the details of your personal case - I'm just trying to understand what a typical experience with Chex is like, since I have no firsthand knowledge and you seem to.

Re: The Real Reason The Poor Go Without Bank Accounts

#157

Post by jakejake » Sun, Sep 22, 2013, 12:24 AM UTC

steveklabnik wrote: post #126

bilbo0s wrote: post #108

Earlier quoted context omitted.

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…

> (Ironically, a check that was bad because of the fee taken for 'a') This is a real big problem in these kinds of situations. To give you an idea of how this happens: when I was in college, I worked at a pizza shop. It was Thursday. I got paid Friday. I thought I had $20 in my bank account, but I didn't realize that day was the day that my World of Warcraft subscription was up, and that was $15. During the course of…

It's called transaction re-ordering. The bank claims the that large transactions (like rent, mortgage, etc) are likely to be the most important and that you, the customer, would want those to be processed first. But, the math works out in favor of the bank because you get more fees (exactly as you showed in your example).

I remember this being in the news several years ago. I don't remember if anything came of it, maybe somebody else here does. But, personally I did opt out of all overdraft services from my bank - so if I did run out of money my charge would simply be denied. As far as I know this never results in any penalty. Any automated billing I have set up seems to be fault-tolerant and will just notify me to verify my card information and re-try the charge a few days later.

Re: The Real Reason The Poor Go Without Bank Accounts

#158

Post by thaumaturgy » Sun, Sep 22, 2013, 12:28 AM UTC

chimeracoder wrote: post #156

thaumaturgy wrote: post #114

HN is so cute. So many people here talking about why poor people do things the way they do without having ever really experienced it. Here's why poor people don't like banks: because banks don't like them. Let me paint you some pictures. You're not clean-shaven. You smell a little bit, whether because you just finished a smelly job or because you're living on the streets or because you're depressed and haven't bother…

> "I'm sorry, you're here in Chex Systems for account abuse at BigCorp Bank three years ago, we can't open an account for you." > eventually I got into trouble with a bank Could you elaborate on this? I'm very familiar with the CRAs and how they operate, FICO, etc., but I know very little about Chex. What kind of "errors" do these entail? I'm not asking about the details of your personal case - I'm just trying to und…

Sure. I had two bank accounts: one with USBank, one with Bank of America. I had set them up as a savings account at one and a regular checking account at the other, back when I had money.

My funds eventually ran out, and they both were overdrawn. Not by very much -- $20 to $50 each as I recall -- but with fees & etc., it grew to more than I could resolve. One of them grew to over $500 of debt. (I stopped using either account as soon as they were overdrawn; I didn't write $500 of bad checks.)

I simply wasn't making enough money to do anything about it, and had no friends or family to turn to. (Well, that, and I was too proud to ask for help.) So, I walked away from it. I didn't know about Chex Systems at the time, and didn't realize that doing so would mean I wouldn't be able to open accounts elsewhere for about five years.

I think some banks do now offer options for people listed in Chex Systems, but at the time that wasn't the case.

I'm not sure what the range of abuses are that Chex Systems tracks. I was told more than once that mine was especially egregious, probably because it involved accounts at two banks, and because one of them racked up a pretty big sum.

Re: The Real Reason The Poor Go Without Bank Accounts

#159

Post by Cherian_Abraham » Sun, Sep 22, 2013, 12:30 AM UTC

superuser2 wrote: post #129

bilbo0s wrote: post #108

Earlier quoted context omitted.

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…

Except those debit cards have all kinds of predatory fees. They're smaller and predictable, but way more expensive than using a checking account from a credit union correctly. For example, PayPal: https://www.paypal-prepaid.com/prepaid-debit-card/paypal_fee...

I suspect he/she is referring to Walmart Bluebird. It eats bank's profits for breakfast, lunch and dinner.

Re: The Real Reason The Poor Go Without Bank Accounts

#160

Post by aj12345 » Sun, Sep 22, 2013, 12:30 AM UTC

jellicle wrote: post #92

notahacker wrote: post #28

Earlier quoted context omitted.

Mistrust of banks' ability to honour withdrawal requests is largely irrational in a developed country given the existence of government-backed deposit insurance (and the much greater risk of having your cash stolen). I'd actually consider this to be the classic example of irrational mistrust based on a limited understanding of who actually loses out as a result of bank failures, and overconfidence in one's ability to…

> Mistrust of banks' ability to honour withdrawal requests is largely irrational in a developed country given the existence of government-backed deposit insurance (and the much greater risk of having your cash stolen). I'd actually consider this to be the classic example of irrational mistrust based on a limited understanding of who actually loses out as a result of bank failures Pretty much every developed country h…

Can you please provide examples of developed countries speaking "in the last few years of forcing depositors to take losses in the event of bank failures" and which ones "have actually done it"? Cyprus is the only example that I can think of that discussed it and I can't think of any that have actually done it.