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

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

#201

Post by eru » Tue, Aug 25, 2015, 9:06 AM UTC

shard wrote: post #181

kelukelugames wrote: post #118

Earlier quoted context omitted.

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.

How does writing it down make any difference, unless there was a corroborating witness during the conversation? It seems like it would still be he said she said. Is it just a case of writing it down being more unlikely for the memory of the words to be distorted by time passing?

For some weird reason, keeping a journal of stuff as its happening (eg your neighbours making noises) seems to hold up better legally than just stating these things verbally.

One theory: I guess because the journal commits you to one story. One consistent story is easy to shoot down, eg your neighbour claims and proves they were on holiday when your journal speaks of lots of noise.

Evidence that is easy to shoot down, but doesn't actually get shot down, is more believable afterwards.

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

#202

Post by mr_green_tea » Tue, Aug 25, 2015, 9:09 AM UTC

mikekchar wrote: post #41

staunch wrote: post #6

The pain overdraft fees cause poor people is truly hard to comprehend unless you've been there. It's incredibly evil. You've got $16 left for food and then then the Flickr account you forgot to cancel gets charged to your account, putting your balance at -$9. Now you have to pay $35/day until you get enough money to cover the overdraft fees. You end up paying $100+ for a $9 forced loan. The bank could have just decli…

There are a couple of times in my life when I was quite poor (for someone living in a G8 country...) The biggest thing I learned was to use cash. Cash is awesome because you can see how much you have and you can't spend more than you have. Even now that I am relatively well off, I have my habitual routine of getting cash at the beginning of the week and spending only that for the week. In fact, I make sure that there…

> The last time I tried to rent a room at a hotel in Canada, they would not accept cash -- credit card only.

> In the UK, I used to use my Oyster card (a pre-paid travel card for public transit in London). I could basically use it like cash.

You might want to consider a pre-paid credit card :)

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

#203

Post by doki_pen » Tue, Aug 25, 2015, 12:29 PM UTC

JoshTriplett wrote: post #191

maehwasu wrote: post #183

Earlier quoted context omitted.

Could happen from anything. I've also been poor, and one thing that sent me over the edge was a check that someone waited months to cash. Thought I had $200 in my account, and made a payment with debit card, only to go under $0. What's worse, I wasn't notified, and made a couple more charges, all at exorbitant rates, until I realized what had happen. As always, it's best to interpret others' comments in the most gene…

> I've also been poor, and one thing that sent me over the edge was a check that someone waited months to cash. Thought I had $200 in my account, and made a payment with debit card, only to go under $0. While this isn't something that is directly taught (a checking account ought to come with detailed guidance), if you write checks, you should use your checkbook to track your actual effective balance separate from how…

Good point, but when they are charging 2300% APR, they could afford to give you a call or email you after the first overdraft. They are acting predatory and we shouldn't make excuses for them. All financial relationships in a capitalist system should be mutually beneficial.

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

#204

Post by darkmighty » Tue, Aug 25, 2015, 1:17 PM UTC

fredkbloggs wrote: post #189

darkmighty wrote: post #174

Earlier quoted context omitted.

Going on that line of thought, consumer protection laws, agencies and regulations would be nonexistent. Hopefully not everyone thinks that way. Also, I never read about progressivism before. https://en.wikipedia.org/wiki/Progressivism Can you sincerely say you are not progressivist after reading the introduction?

By the original philosophical definition, I'd probably qualify, though my affinity for the ideas is marginal. I'm not really convinced that our "advances" have improved the human condition. A few have, many others have not, and on the whole I think our species is in worse shape than it was 300 years ago. I'd like to think that an increase in our empirical knowledge would lead to an improved human condition, but empir…

> I'm not really convinced that our "advances" have improved the human condition

I'm baffled. I can't comment on this, if you really don't believe things like going from a life expectancy of 30 to 80 years improved human condition.

So you just wrote several extended paragraphs of arbitrary philosophical justifications that I don't if someone would really fit in, lest any group homogeneously makes assumptions such as "it must be true that our gigantic bureaucratic regulatory regime is in every way superior to what it replaced".

What we're arguing here is about a specific consumer protection mechanism; you seem to oppose consumer protection in general, in principle. I don't see how that is justifiable, that simple.

By the way, I own a significant amount of shares of several large banks. So technically, I'm a banker, but I sure don't want me to "give up and die".

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

#205

Post by rev_bird » Tue, Aug 25, 2015, 1:30 PM UTC

fredkbloggs wrote: post #120

rev_bird wrote: post #78

Earlier quoted context omitted.

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 w…

That's an interesting angle that I hadn't considered -- I get that it's unreasonable to ask banks to be a public trust AND a public corporation at the same time, but maybe separating the "for-profit business" side of things from the "financial services necessary to just be alive" side would be more productive for everyone. Just never occurred to me, for whatever reason.

Thinking more about it, this seems like a similar problem to one some states are running into with privatized prisons and "public" schools -- corporations are put in charge of public services and are doing a horrifying job in some cases, because their business is oriented toward profit, not "the public good." I'm not saying the companies are acting unreasonably, but maybe some things should just be set aside for something other than profit... firefighters come to mind.

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

#206

Post by dkuntz2 » Tue, Aug 25, 2015, 1:52 PM UTC

gizmo686 wrote: post #68

mikekchar wrote: post #41

Earlier quoted context omitted.

There are a couple of times in my life when I was quite poor (for someone living in a G8 country...) The biggest thing I learned was to use cash. Cash is awesome because you can see how much you have and you can't spend more than you have. Even now that I am relatively well off, I have my habitual routine of getting cash at the beginning of the week and spending only that for the week. In fact, I make sure that there…

Being legal tender means that something must be accepted as payment for a debt; it does not mean that it must be accepted as payment when no debt exists. For example, if you go to a restaurant that serves you before giving you your check then they are required to accept cash. However, they are allowed (possibly depending on jurisdiction) to insist on being payed by card prior to serving you.

There's very little incentive to accept card only. Cash, unlike credit or debit cards, doesn't carry an interchange fee, which means the full amount is going to the business, instead of losing some money to interchange.

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

#207

Post by kelukelugames » Tue, Aug 25, 2015, 2:33 PM UTC

shard wrote: post #181

kelukelugames wrote: post #118

Earlier quoted context omitted.

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.

How does writing it down make any difference, unless there was a corroborating witness during the conversation? It seems like it would still be he said she said. Is it just a case of writing it down being more unlikely for the memory of the words to be distorted by time passing?

I don't know but it's legal advice I have received.

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

#208

Post by e40 » Tue, Aug 25, 2015, 2:40 PM UTC

ssimpson wrote: post #38

staunch wrote: post #6

The pain overdraft fees cause poor people is truly hard to comprehend unless you've been there. It's incredibly evil. You've got $16 left for food and then then the Flickr account you forgot to cancel gets charged to your account, putting your balance at -$9. Now you have to pay $35/day until you get enough money to cover the overdraft fees. You end up paying $100+ for a $9 forced loan. The bank could have just decli…

USAA also batches their debts and payments differently than other banks, to help their members minimizes any fees incurred. Their customer service saying is "assume positive intent" and they have amazing service. I will probably be a customer for life.

USAA is, indeed, an exceptional bank. Hard to get in, though, unless you have served in the military or have a parent that did. My father was quite surprised when I asked him to sign up for a website account (not bank account) so I could use that to join.

You see, USAA was one of the first banks to have an Android check deposit app. Years before B of A.

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

#209

Post by greggyb » Tue, Aug 25, 2015, 3:44 PM UTC

>According to an ICBA survey of 200 bankers nationwide, overdraft fees constitute their most profitable non-depository and non-lending product.

Emphasis mine. This is an inflammatory title, not matching the article's or any statements I see made therein.

This statement is buried in there, but if we want the title to at least be accurate, it should be along the lines of "The third most profitable source of income for banks? Overdraft fees - behind their two core services, depository and lending services."

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

#210

Post by jonas21 » Tue, Aug 25, 2015, 3:59 PM UTC

akshatpradhan wrote: post #194

rhino369 wrote: post #145

Earlier quoted context omitted.

You are way more likely to get stuck up by a mugger (aka the real cash risk). But 2500 is insane. Is it really that much? Or does that include attorneys fees.

>You are way more likely to get stuck up by a mugger (aka the real cash risk). Can you provide citations? Thanks!

There were an estimated 345,031 robberies in the US in 2013, of which 42.5%, or about 146,000, were street/highway robberies (muggings) [1].

For the 13 years between Sept. 2001 and Sept. 2014, the Washington Post analyzed records from the DOJ and found 61,998 civil forfeiture cases "that were not made at businesses and that occurred without warrants or indictments". This is around 4,770 per year. [2]

Neither of these are broken down by location, race, etc. so your particular circumstances may vary, but at the aggregate level, you're about 30 times more likely to be mugged than to have assets seized at a traffic stop.

[1] https://www.fbi.gov/about-us/cjis/ucr/crime-in-the-u.s/2013/...

[2] http://www.washingtonpost.com/sf/investigative/2014/09/08/th...