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The Real Reason The Poor Go Without Bank Accounts

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Re: The Real Reason The Poor Go Without Bank Accounts

#181

Post by mahyarm »

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…

The people waiting for their money on Mt.Gox should change it back to bitcoin and take the possible hit. The ones waiting for cash withdrawal are playing chicken with Mt.Gox's liquidity problem, and that is the risk they take in exchange for the ~$20 premium they have now.

Re: The Real Reason The Poor Go Without Bank Accounts

#182

Post by mcovey »

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…

Ahh this is why I've always gotten an account that can not overdraft, and I refuse to opt-in to any overdraft crap. If I am out of money, I want to be out of money, and to not be able to buy things, period.

Re: The Real Reason The Poor Go Without Bank Accounts

#183

Post by eriksank »

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.

What if other citizens are prevented from running such business too? Mt Gox almost got shut down because they are competing with the God-given monopoly rights of the banking cartel. The banks do not like to serve the poor but they are also very efficient at getting anybody shutt down who does. Seriously, they are now trying to shut down the entire bitcoin industry, not because it abets drug dealers, but because it would give alternatives to the poor.

Re: The Real Reason The Poor Go Without Bank Accounts

#184

Post by eriksank »

code_duck wrote: post #55
rwmj wrote: post #20

Earlier quoted context omitted.

I wonder what the mother and child think of this arrangement?

I presume they wish the state had more effective means to redistribute the deadbeat's assets.

Is it even his kid? It could also be the "works" of the new boyfriend ;-)

Re: The Real Reason The Poor Go Without Bank Accounts

#185

Post by Proleps »

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…

That such a thing is possible. If I try to get below my limit in the Netherlands I am simply not able to. The only services who can go below my limit are my rent and gas/water/electricity bills. And then I just pay a high interest rate. Which doesn't really matter if you deposit money the next day.

Re: The Real Reason The Poor Go Without Bank Accounts

#186

Post by eriksank »

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…

I think it is actually a good thing that lots of people do not want to use bank accounts. It keeps the alternatives afloat for when I ever need them. Furthermore, I welcome alternatives like bitcoin with open arms. We don't want the banking system to have as much power as they have now. They must be made to cave in and become service providers again, instead of some kind of overlords, over other people's money.

Re: The Real Reason The Poor Go Without Bank Accounts

#187

Post by eriksank »

teamonkey wrote: post #25
waterlesscloud wrote: post #21

Earlier quoted context omitted.

Stop banking with big banks. Go local. When my brother started his business, he moved all his banking to a local bank, one that had only one branch, which was downtown in his town. He's built a personal relationship with them, and the flexibility it's given him has paid off in spades over the year. There's no reason to pay some megacorporation to treat you impersonally.

Cost. If I bank with a large bank I can use their network of ATMs for free. With a smaller bank I can't withdraw anywhere other than my branch without incurring a ridiculous $3-$5 charge.

I'd rather pay a well-known, well-understood charge for using the ATM than get charged secretly deeply hidden inside some kind of other fee. The people running these ATM's don't do that for free. How would it be possible that I could use their service for free? When I withdraw cash for free at an ATM, I feel more suspicious and more cheated than when they would charge me 50 cents for drawing 50 dollars or so.

Re: The Real Reason The Poor Go Without Bank Accounts

#188

Post by taejo »

DanBC wrote: post #131
byuu wrote: post #130

When I was 19, I tried to open a checking account. Amazingly, I was declined. For a bank account. I didn't ask for credit, in fact I had no credit history at all. I was apparently so unworthy that they didn't trust me to give them my own money. I never understood that, as I figured they'd just bounce a check anyway if I lacked sufficient funds. I'm much older now, and have a bank account, mortgage, credit cards, and…

You didn't ask for credit. They make money by giving people credit. You wouldn't have made them any money. You also didn't have any credit history. That's something that young people could be taught: "How to get a good credit rating, without being stupid and getting into tens of thousands of dollars of unpayable debt". The UK has the concept of "basic bank accounts" which are needed so people can have state benefits…

> You didn't ask for credit. They make money by giving people credit. You wouldn't have made them any money.

In South Africa, banks are desperate for young customers and all of them have no-fee high-interest savings accounts for children, no-fee checking accounts for students, and so on. On university open days and orientation days, all the major banks have a large presence encouraging students to sign up for these. Most customers never switch banks after opening their first account, so it's highly worthwhile for the bank to be attractive to customers who've never interacted with a bank before (especially if they have money to save as children, so are likely middle or upper class, or are attending university, so have future earning potential).

I'm surprised this is not the case in the US (Wells Fargo quite happily gave me a no-fee checking account just after the financial crisis began, when I did an internship in the US -- I assumed the reasons were much the same).

Re: The Real Reason The Poor Go Without Bank Accounts

#189

Post by eriksank »

thyrsus wrote: post #165
elnate wrote: post #161

Reading this it sounds like there is a non zero minimum amount you're allowed to have in your bank accout. Is this true? I've never heard of such a thing in my country.

In the U.S., banks can charge you a fee for having less than an agreed amount in the account. They're required to tell you in advance what that minimum amount is (and it may be $0), but they're free to set their policies at will.

I wouldn't mind the banks so much if they did not lobby the government all the time to stamp out alternatives to their abysmal service ...

Re: The Real Reason The Poor Go Without Bank Accounts

#190

Post by eriksank »

notahacker wrote: post #16
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 acco…

The check cashers don't offer deposit accounts because ... they are not allowed to.
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