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The Real Reason The Poor Go Without Bank Accounts

theatlanticcities.com

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Re: The Real Reason The Poor Go Without Bank Accounts

#41

Post by polynomial »

rm445 wrote: post #34

This article has a lot of fluff and before getting to the point. It just seems unlikely that the success of these shops that provide expensive financial services to poor people is all down to the human touch. I see friendliness in the report but not much in the way of personalised service (just the lady with the payment plan). The benefits of paying a percentage to get your money a couple of days earlier are clear en…

I agree with your analysis of overdraft fees however what you take to be fluff and not greeting to the point, others may interpret as good writing, or at least a more verbose style than we in the modern tech sector are used to.

I thought it was a colorful and well-written article that while anecdotal (plural != data!) effectively conveyed the conclusions this author, who is putatively an expert in the field.

Re: The Real Reason The Poor Go Without Bank Accounts

#42

Post by RougeFemme »

cryptoz wrote: post #13
notahacker wrote: post #10

Earlier quoted context omitted.

Not having any paper trail to attract the attention of people and organizations you owe money to is arguably the only rational reason for being unbanked in an urban area of a developed country.

I disagree very strongly with that. Here are a few rational reasons that someone may choose to not have their money in a bank: - Moral conflicts. Most banks use your money for purposes that many people consider evil, so choosing to not give them your money is a rational choice. - Lack of trust. Many banks over the last century have run out of money and been unable to honour withdrawal demands/requests. It's reasonabl…

The biggest reason is the over-abundance of fees that eat into your balance.

Re: The Real Reason The Poor Go Without Bank Accounts

#43

Post by mikeash »

RougeFemme wrote: post #39
belorn wrote: post #31

While the alternative financial service providers is taking the road of improved customer service, the banks are going the other way. In Sweden, most ATMs is set at a maximum withdraw of 100$, while a few is set at $300. The bank itself also adds additional restriction of maximum $2000 per week. If you want to withdraw more of your own money, you have to ask permission and give a reasonable explanation why one is tak…

In the U.S. you don't have to give a reason for taking out your cash (though withdrawals over a certain amount are reported to the Feds). But there are ATM limits. I always assumed - perhaps naively - that the reason was to keep the ATM from running out of cash too quickly, thus minimizing the cost of replenishing them. And occasionally, on 3-day weekends, I have seen more out-of-order ATMS than usual. . .presumably…

My impression is that it's to limit fraud. If someone steals your card an your PIN, the daily limit keeps the amount they can steal from your account before you discover the fraud reasonably low.

If for some reason you need a bunch of cash from an ATM, you can generally call your bank and have them temporarily raise the limit.

Re: The Real Reason The Poor Go Without Bank Accounts

#44

Post by stephengillie »

Geee wrote: post #33

Why is it exactly that online wire transfers aren't used in the US? As an European, I've not been in a bank since the 1990's, and never written or cashed a check. On the other hand, it's impossible to live without a bank account here. Your bank account is the only place you get paid to, whether it's salary or social security money. Also, you need it to pay your bills or transfer money to your friends.

To add another reason -- most Americans hear more about wiring money being used to defraud you out of your money than they hear about it being a useful financial tool. I have never heard any bank (or credit union) employee even mention sending money to another bank. Most banks won't even let us put money into another person's account without several pieces of information about the other person, and that person's permission.

Re: The Real Reason The Poor Go Without Bank Accounts

#45

Post by emidln »

RougeFemme wrote: post #39
belorn wrote: post #31

While the alternative financial service providers is taking the road of improved customer service, the banks are going the other way. In Sweden, most ATMs is set at a maximum withdraw of 100$, while a few is set at $300. The bank itself also adds additional restriction of maximum $2000 per week. If you want to withdraw more of your own money, you have to ask permission and give a reasonable explanation why one is tak…

In the U.S. you don't have to give a reason for taking out your cash (though withdrawals over a certain amount are reported to the Feds). But there are ATM limits. I always assumed - perhaps naively - that the reason was to keep the ATM from running out of cash too quickly, thus minimizing the cost of replenishing them. And occasionally, on 3-day weekends, I have seen more out-of-order ATMS than usual. . .presumably…

In the past (I haven't tried recently), a call to customer service could raise or remove your ATM limits.

Re: The Real Reason The Poor Go Without Bank Accounts

#46

Post by aptwebapps »

notahacker wrote: post #10
pekk wrote: post #6

Earlier quoted context omitted.

I assume this is talking about child support payments ordered during divorce proceedings?

Not having any paper trail to attract the attention of people and organizations you owe money to is arguably the only rational reason for being unbanked in an urban area of a developed country.

How about the reason given in TFA? If you're living on the edge, financially, cascading fees and fines from a single incident can cripple you.

Re: The Real Reason The Poor Go Without Bank Accounts

#48

Post by fauigerzigerk »

Amadou wrote: post #4

This article validates one my key beefs with "big data" - databases (like chexsystems in the article) remove slack from the system. Humans need slack and only humans can provide slack. In the short term that may seem like a good idea, removing slack appears to increase efficiency. But in the long run it is socially destructive -- we are all people, not just numbers and reducing us to numbers ignores much of the reali…

I generally agree with that, but there is a potential downside to it as well. The slack that humans will cut you is not a right, so it can be taken away at will for completely arbitrary or malicious reasons such as stereotypes against particular groups or even because you didn't bribe a particular offcial.

I'm still convinced that your point is correct, but it only works in combination with the utmost transparency.

Re: The Real Reason The Poor Go Without Bank Accounts

#49

Post by sebcat »

belorn wrote: post #31

While the alternative financial service providers is taking the road of improved customer service, the banks are going the other way. In Sweden, most ATMs is set at a maximum withdraw of 100$, while a few is set at $300. The bank itself also adds additional restriction of maximum $2000 per week. If you want to withdraw more of your own money, you have to ask permission and give a reasonable explanation why one is tak…

That has not been my experience, ever. I only had "problems" with my bank once, that was when I was buying parachute equipment from France. The transfer went through, the bank contacted me and said "we have turned off international transfers from your account due to what we believe could be fraud committed by a third party". I contacted them, was told the cause of the "lock", said it was a legitimate transfer, they unlocked the international transfer thingy, really smooth.

I regularly withdraw money from ATMs in excess of 500 USD equiv.

I have not heard of this 2K USD equiv. / month thing either, is that the policy of your bank or is it regulatory? Do you have a source?

EDIT: I live in Sweden

Re: The Real Reason The Poor Go Without Bank Accounts

#50

Post by peckrob »

waterlesscloud wrote: post #21
rdtsc wrote: post #11

I can understand this. My mother in law was sick for a while and in a hospital for a few months. During that time she was late on one of her mortgage payments, which she as been faithfully paying for 2 decades. She also took an equity loan to remodel her house. Because of the missed payment they cancelled her equity loan. She went to the bank to talk to them hoping they would understand, but all he heard was how his…

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.

We bought a house last year in what was a moderately complex transaction. What we were trying to do was purchase a "new" home (it was actually 2 years old, but had been the model home in a neighborhood so it hadn't actually been lived in) and, at the same time, build a detached garage on the property. While this seems simple, actually doing this in a way that doesn't involve multiple loans is surprisingly complex.

In the end, it would be a low-risk, vanilla, 30 year conventional mortgage, and we had enough cash for a 20% down payment. It just required some complexity to set up.

Not surprisingly, most major banks wouldn't even try to help us once we explained what we were trying to do. It didn't fit any "profile" they had and the "system" was unable to let them continue. We lost count of the number of times we were told that a "system" prevented them from doing something.

So we went to a local bank - only one location, right in the middle of town. We sat down with an older guy who's probably been making loans in this town his entire life. The president of the bank came over and talked to us, and congratulated us on our coming addition to the family (my wife was 7 months' along at the time, so very clearly pregnant).

After talking with us for an hour or so, before having even filled out any paperwork or pulled any credit, they were confident they could help us. They were even more happy once credit had been pulled, and offered us rates lower than any of the big banks were offering at the time. What we ended up doing was writing a 4-month construction loan for the purchase price of the house plus the cost of constructing the garage. A few months later, when the garage was completed, we closed the loan and had a single mortgage for the whole property.

So after that experience, I've started recommending my friends and family stay away from big banks and work with local banks and credit unions. Big banks may be great for the convenience factor of having branches everywhere, but they fail hard when it comes time to do anything remotely out of the ordinary.

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