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

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

#221

Post by Karunamon » Thu, Aug 27, 2015, 7:00 PM UTC

danharaj wrote: post #215

Karunamon wrote: post #130

Earlier quoted context omitted.

A detail such as "don't spend money you don't have"? Violating that principle will get you into trouble in ways that go far beyond checking accounts. Are gun manufacturers to blame as some part of power structure when you point it at your foot and pull the trigger? If not, why?

One would think a bank account were an instrument for storing and retrieving one's own money. Banks opted in customers to a system that would allow them to extract fees from people who work with low account balances. They exist. Furthermore, if you look around this post's comments you'll notice that banks do far more than just charge for overdrafting. They specifically optimize for extracting such fees and behave in…

It is often difficult to know what balance one actually has unless one does all their accounting by hand.

This is absolutely not the fault of anyone but the account holder - even the most honest and pro-consumer bank out there will have issues with this just due to the way finance works.

Example - say you buy a pizza on delivery with your debit card. The card gets "authorized" right then and there (but the money hasn't gone), and your bank will show a difference between ledger balance and available balance. Now assume you wrote a tip on the receipt, and now the discrepancy further grows. Your bank shows you have sort-of balance-pizzaa, but it's actually balance-pizza and an invisible tip until the pizza join runs the batch hours or days later.

The responsible person will know how much money they have, and deduct pizza-tip from their ledger the moment they pay it - no ifs ands or buts.

You think that's ok

Never said that. Again, you seem to think it's impossible to believe that banks are bastards and simultaneously believe that people often act counter to their own best interests.

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

#222

Post by bedhead » Mon, Sep 07, 2015, 8:29 PM UTC

danharaj wrote: post #94

bedhead wrote: post #62

Earlier quoted context omitted.

No, it's the same system that allows the lottery to exist. It's not "fuck the poor", it's "fuck the stupid" (alternatively, "fuck the bad-at-math"). If there's a high correlation, I don't think anyone is going to be terribly surprised, as uncomfortable as that may be. I have been poor. I have also been the opposite. I have also been a bank employee, and a professional investor who studied security analysis by looking…

There is a cognitive overhead to managing every predatory relationship. The poor have to deal with many, many predatory relationships all the fucking time. People make mistakes and extremely powerful people and institutions exploit them as much as they can when they do. Good on you for being able to say that you were poor, in the past tense. I'm glad. I don't think people are stupid just because they stay poor. When…

You're right that the poor face many asymmetric relationships day-in and day-out. Whether I would describe it all as "predatory" I would disagree.

Again, I think this is a very, very uncomfortable topic to have an honest conversation about, but I think people often mix up causation and correlation on this general topic. Let's stop kidding ourselves about it - many, many poor people are poor because they lack the basic building blocks for success that we take for granted: god-given intelligence, a strong work ethic, long-term thinking, careful considering for non-trivial decisions, an upbringing that values education, etc. I'm NOT saying all, but definitely many. So to the extent people and organizations are trying to in some way take advantage of "poor" people, this isn't really accurate - they are trying to take advantage of people who don't make good decisions. Heck, if you were trying to sucker someone for money, wouldn't you (ignoring everything else) go after someone with lots of money? People can't "catch their breath" or "get their affairs in order" not because of systemic oppression, but because they simply don't have the basic life skills to do it in the first place...that's probably a large part of why they're poor. There's also just a lot of inertia with this stuff, but we're getting way off topic. I read an interesting book about this years ago called The Persistence of Poverty, which I would recommend.

None of this is to say I am not empathetic or have any compassion. The blatantly predatory behaviors are deplorable and should be stopped and if applicable, the people involved should face whatever punishment is allowable. But adults need to be treated like adults at some point.

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

#223

Post by bedhead » Mon, Sep 07, 2015, 8:46 PM UTC

guelo wrote: post #188

bedhead wrote: post #62

Earlier quoted context omitted.

No, it's the same system that allows the lottery to exist. It's not "fuck the poor", it's "fuck the stupid" (alternatively, "fuck the bad-at-math"). If there's a high correlation, I don't think anyone is going to be terribly surprised, as uncomfortable as that may be. I have been poor. I have also been the opposite. I have also been a bank employee, and a professional investor who studied security analysis by looking…

Except that banks go through great lengths to make keeping track of your money as confusing as possible.

Examples? Again, as a former bank employee and someone who's analyzed banks for well over a decade, I know with certainty that you are 100% wrong...but I'm interested in your explanation.