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

Re: The Real Reason The Poor Go Without Bank Accounts

#201

Post by sfrjay » Sun, Sep 22, 2013, 11:03 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…

A similar thing happened to me in college (compounded by the bank charging me another $35 every day until I had money again) and I was lucky I had a paid-for place to live and a paid-for meal plan to scrape through till payday.

Pew has a nice little infographic depicting your exact situation: http://www.pewtrusts.org/our_work_report_detail.aspx?id=8589...

Banks mostly stopped transaction reordering when it got a lot of attention post-financial crisis, but they're slowly going back to it, so some orgs and the CFPB are starting to shine a light on the problem again.

http://www.forbes.com/sites/halahtouryalai/2012/02/22/are-ba...

Re: The Real Reason The Poor Go Without Bank Accounts

#202

Post by jmadsen » Sun, Sep 22, 2013, 11:27 AM UTC

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…

banks are among the slimiest for finding ways to run up fees on you - I believe it must be their primary source of income these days.

It's not just the US - as patio11 knows, here in Japan, the banks charge you a "convenience fee" for using the ATM when the bank isn't open.

Using an ATM vs a teller actually SAVES them money. This is the most ballsy thing I've ever seen, and exists only because most Japanese don't realize it isn't normal

Re: The Real Reason The Poor Go Without Bank Accounts

#203

Post by ncarroll » Sun, Sep 22, 2013, 11:45 AM UTC

bilbo0s wrote: post #108

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…

I must have missed something. I didn't read what patio11 wrote to suggest that he thought paying with cash (or it's equivalent) would be a bad decision. It seems to me like your friend made a sane and responsible choice when she ditched the bank.

Really, if asked, I don't know anyone struggling financially who has a line-item in their budget to cover not having money. Maybe overdrafts should be capped and charged the going annual interest rate for short-term loans. If I understand correctly, that is how they are handled in Germany.

Re: The Real Reason The Poor Go Without Bank Accounts

#204

Post by corporalagumbo » Sun, Sep 22, 2013, 12:04 PM UTC

eriksank wrote: post #183

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.

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 wo…

I think national governments are not going to feel like rushing to the aid of virtual currencies - from my understanding they have the potential to eradicate tax bases.

Re: The Real Reason The Poor Go Without Bank Accounts

#205

Post by gcb1 » Sun, Sep 22, 2013, 12:05 PM UTC

bilbo0s wrote: post #108

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…

have an uncle who is a bank dev since forever... he says when he started banks had a "cost per client" that they had to make up for lending/investing that clients money.

nowadays they have only consideration for "profit per account".

and he says thats because banks are now almost required if you want to get paid for your job, so you dont have to give anything for free anymore.

Re: The Real Reason The Poor Go Without Bank Accounts

#206

Post by maxerickson » Sun, Sep 22, 2013, 12:22 PM UTC

mattm wrote: post #195

steveklabnik wrote: post #126

Earlier quoted context omitted.

> (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…

> I didn't realize that day was the day that my World of Warcraft subscription was up I no longer allow any automatic payments from my bank account because of this issue. Maybe one is ok but if you start to have 5 or 6 monthly payments automatically coming out of your bank account, it can be hard to keep track. Also, if they make an error and you are dealing with a large company, it is probably going to take months t…

"Just use a credit card" isn't necessarily an option (if your parents have bad credit, they aren't going to be able to help you get starter credit which means a secured card, which means having the cash to secure it...).

I agree though, I like to trigger my payments.

Re: The Real Reason The Poor Go Without Bank Accounts

#207

Post by wintersFright » Sun, Sep 22, 2013, 12:24 PM UTC

aj12345 wrote: post #160

jellicle wrote: post #92

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 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.

Europe has repeatedly stated cyprus is a template for future bailouts.

Re: The Real Reason The Poor Go Without Bank Accounts

#208

Post by innino » Sun, Sep 22, 2013, 12:47 PM UTC

Shit articles like this make me feel lucky. I don't come an extremely wealthy background or anything but reading this sort of stuff makes me feel like a life-assets superstar. I have to say it makes me appreciate my bank/national banking culture:

1) I can ask for an overdraft limit of up to $2000, which if I draw into I pay a $3 monthly fee for. 2) I have a credit card which I can easily ask for a limit up to $5000 if I ever need that sort of temporary cash (I don't.) 3) Everything is done with banking cards here - balances update automatically, only credit cards have weird lags with responding to transactions.

Recently I dropped my OD limit to $200 to try and improve my financial hygiene. I didn't watch my transactions and a small weekly automatic payment pushed me past my arranged limit. Talked to the bank and they explained in that case I would pay one $15 fee per month for any number of unarranged ODs. Seems pretty lenient compared to the American situation... but they never charged me the fee anyway!

Re: The Real Reason The Poor Go Without Bank Accounts

#209

Post by [deleted] » Sun, Sep 22, 2013, 12:54 PM UTC

dizzystar wrote: post #171

steveklabnik wrote: post #126

Earlier quoted context omitted.

> (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…

Came here to post something on the order of this. One time I was nailed for > $250 and the correct ordering would have been only one overdraft for about 30cents and a penalty of $35. I was working at a min-wage job at the time and taking home less than $200/week. I lost over a week and a half of pay to the bank, couldn't afford to pay rent and had to leave my place. I got slammed less than two weeks later and that pr…

[deleted]

Re: The Real Reason The Poor Go Without Bank Accounts

#210

Post by personlurking » Sun, Sep 22, 2013, 1:32 PM 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…

Since we're doing stories, here's mine.

My brother didn't have an account but he needed someone to cash a $3K check from an acquaintance of his. He told me he'd give me 10% if I did it, and I was dead broke at the time. So I do it and the next day my bank (one of the big names) lets me take it all out, at which point I give it to my brother and he gives me $300. On the same morning, the check-writer cancels the check and the bank hits me with a -$3,000, plus overdraft fees. A week later they closed my account of good standing of 10+ years. My brother spends the money, refuses to pay it back and swears he wasn't 'in it' from the start with his buddy, the check-writer. That was 4 years ago and I haven't spoken to my lovely brother since. To top it off, I wasn't able to open another account in the US for a few years.