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

Re: The Real Reason The Poor Go Without Bank Accounts

#81

Post by jlgaddis » Sat, Sep 21, 2013, 6:48 PM UTC

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…

Wow, that's absurd. I can't imagine having to ask permission from my bank to withdraw money.

c. June 2011 I got quite involved in the Bitcoin scene and arranged to meet up with a guy at a local establishment and buy a large quantity of BTC from him. I walked into the bank and asked for $11k in cash and there were only two (small) things out of the ordinary: 1) the teller explained that she didn't have that much cash at her station and it would be a few minutes while she went to get it, and 2) a quick, non-invasive question about my intentions in an attempt to make sure I wasn't about to be the victim of a scam.

Re: The Real Reason The Poor Go Without Bank Accounts

#82

Post by jlgaddis » Sat, Sep 21, 2013, 6:50 PM UTC

rayiner wrote: post #15

I'd imagine another reason is they need the certainty of having their money be there. My wife had an account she didn't use since college, and apparently she fell below a balance limit and they charged a $5 fee, which overdraw her and turned into a $35 overdraft charge. Inconvenient for us, potentially a disaster for someone scraping by.

I had the same thing happen several years ago when I moved. I changed banks and left my "old" account open with ~$18 in it. I completely forgot about it until a few years later when I received a letter telling me they had closed the account and I owed them $9.

Re: The Real Reason The Poor Go Without Bank Accounts

#83

Post by typicalrunt » Sat, Sep 21, 2013, 6:51 PM UTC

sebcat wrote: post #49

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 u…

In this case, treat a bank like you would a family member; let them know that you will be out of the country for a period of time and they will make a note of it on your account. Whenever any transactions occur it may cause an automatic tripping of a flag on your account, but a human will be able to read the note. This has helped me greatly in the past.

PS: This can also (and should also) be done on your credit card accounts.

Re: The Real Reason The Poor Go Without Bank Accounts

#84

Post by jlgaddis » Sat, Sep 21, 2013, 6:52 PM UTC

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.

I've only ever tried to wire money (online or in person) once in my life. That was online through Chase's web site a few years ago when I wanted to wire $15k USD. I remember it being a huge PITA (due to all the information needed) but I had no problems doing it. I think they called me to verify but I might even be wrong about that.

Re: The Real Reason The Poor Go Without Bank Accounts

#85

Post by moocowduckquack » Sat, Sep 21, 2013, 6:55 PM 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…

I'd say the 5th point is true in general, is just that money insulates you from the worst effects of many bad decisions and severe poverty can amplify them.

Re: The Real Reason The Poor Go Without Bank Accounts

#86

Post by nowarninglabel » Sat, Sep 21, 2013, 6:55 PM UTC

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.

My credit union, asides from having 20,000 fee-free ATM's across the U.S. just from other credit unions, has free withdrawals at Walgreen's and 7-11. I travel the U.S. quite a bit and haven't had to pay a fee yet. Might want to look into it.

Re: The Real Reason The Poor Go Without Bank Accounts

#87

Post by nowarninglabel » Sat, Sep 21, 2013, 6:57 PM 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…

Very good points.

#4 is a lot of why Kiva exists and works here in the U.S. as well as the rest of the world. By being charitable we can offer these higher risk loans, and in the end we end up still having a very high repayment rate.

Re: The Real Reason The Poor Go Without Bank Accounts

#88

Post by bunderbunder » Sat, Sep 21, 2013, 6:58 PM UTC

morgante wrote: post #78

The meat of this article, hidden underneath all the fluff, is simply that fees are higher and poor people end up paying more of them. Honestly though, they probably deserve that. I've never in my life been charged an overdraft fee because it doesn't take much to just track the payments you make and never go over. Of course, an inability to plan is probably why they're poor in the first place...

It's amazing how much more biting a simple arithmetic mistake can be when you don't have the luxury of being able to accumulate any significant amount of padding money into your banking account.

Almost as amazing as how blind we the privileged can be to the myriad advantages we enjoy.

Re: The Real Reason The Poor Go Without Bank Accounts

#89

Post by sliverstorm » Sat, Sep 21, 2013, 6:59 PM UTC

Glyptodon wrote: post #76

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…

Even if you aren't poor, moving frequently or living on the road can cause you all kinds of problems with traditional institutions. So many things in our society rest on an unquestioned assumption that people 'live' in one place and don't move more than once a year and maintain a steady mailing address.

Oh, I wouldn't say that's an assumption so much as a premise upon which services etc are offered, because the people who move every week are both a pain to support and not a significant portion of the population.

In other words, all of this is not brought about by myopia, but simple business decisions.

Re: The Real Reason The Poor Go Without Bank Accounts

#90

Post by jlgaddis » Sat, Sep 21, 2013, 7:01 PM UTC

A friend of mine works at a gas station in my hometown (a fairly low-income, rural city, pop. ~4600). After seeing him post Facebook statuses such as "Oh boy, it's the 31st and I get to work tonight" (in a sarcastic tone) a few times, I asked him about it.

He tells me that on the last day of every month, there are a number of people who come to the gas station starting as early as 9 p.m. and simply "hang out". They wander in and out of the store but mostly linger in the parking lot, chatting with others in their large group, and simply trying to entertain themselves, in general.

Naturally, I asked him why they would do this. Apparently their government "checks" are now "deposited onto their card" (a debit card, basically) at exactly midnight on the 1st of every month. They know that at 12:01 a.m. on the 1st, their money will be available and so they hang out at the gas station in anticipation of being able to load up on cigarettes, basic groceries (more expensive than a typical grocery store, of course), lottery tickets, and such.