My Day Without Banks

[Jarhyn]

Debit is fine. You call the bank, you get your money back, and you get one with different confirmation data. The problem is much better than with checks, which have everything necessary to do direct ACH withdrawal on an account with numbers that can't be changed easily.

 

[jonatha]

Multiple banks offer no-fee checking accounts so long as you direct deposit a check per month.

One of the checks was a payroll check.

I am a small employer.

My bank would charge me $50 per pay period, minimum, to enable me to offer direct deposit of my employees' checks.

 

[jonatha]

Neither of you know what you are talking about. If you're poor you likely have bad credit from unpaid or late paid bills. Banks turn you down for checking accounts with bad credit.

I have never heard of someone getting denied a checking account for bad credit. What happens instead is being blacklisted for having your checking account closed for, as Jarhyn experienced, overdrawing the account and not resolving it in a timely manner.

Happened to one of my employees.

Now you have heard of it....

 

[braces_for_impact]

Also, where are these free accounts? Most banks have stopped offering those.

As we've said, banks waive those things with a direct deposit (among other things).

No, some do, and sometimes they still have other associated fees, and that's IF you can get an account with bad credit or if you've had a problem in ChexSystems, which most banks use nowadays. Sometimes a credit union has better deals and doesn't use credit checks or ChexSystems, but those are harder and harder to find.

The one good thing that came out of some of the newer laws is at least now banks have to offer you the ability to turn off overdraft.

 

[KeepTalking]

Also, where are these free accounts? Most banks have stopped offering those.

As we've said, banks waive those things with a direct deposit (among other things).

You know, there is one thing you need to have before you can direct deposit your paycheck. A bank account.

 

[Bomb#20]

And you think that such issues aren't exacerbating among the poor? The easiest solution to all this is to start postal banking like the rest of the world, and implement a new national electronic payment infrastructure that costs less and which is more secure and reliable than credit or checks.

Well, the easiest solution is the one everybody relied on until not all that long ago -- used to be, employers would pay an employee in cash if he or she preferred that; many paid only in cash. The banks didn't make employers stop doing that. Forcing everybody to be paid by check or electronically, and also pay a fee for the service unless they're rich enough for the interest on their deposits to cover the fee, amounts to a massively regressive tax we have imposed on the poor by our collective choice to move in the direction of a cashless society. Short of reversing that policy, reinstituting postal banking is the least we can do to make up for it. We used to have it in the U.S.; it was shut down in the 1960s.

 

[Nice Squirrel]

- Wells Fargo has a $10/month checking whose monthly fee is waived if you make at least 10 debit card payments/purchases per month or direct deposit $750 or more or maintain a $1,500 balance

Really, I do all this and they still charge me $15.

While the people in question certainly can't get it Wells Fargo actually has a very nice option for those with more. How about free check printing, free bill pay, free cashier's checks (and presumably money orders although I don't recall) and some other perks. It comes with a very hefty minimum but that minimum is based on combined balances--which includes loans. Such as your mortgage.

Not for me. They want me to put $5k in a regular savings for that -- I am pitching them at the end of the month for my credit union.

 

[Nice Squirrel]

Neither of you know what you are talking about. If you're poor you likely have bad credit from unpaid or late paid bills. Banks turn you down for checking accounts with bad credit.

I have never heard of someone getting denied a checking account for bad credit. What happens instead is being blacklisted for having your checking account closed for, as Jarhyn experienced, overdrawing the account and not resolving it in a timely manner.

Happened to one of my employees.

Now you have heard of it....

I once got denied a secured credit card!
Chase denied me a car loan this winter for "too low of a credit score. Your score is 808 out of a possible 810". They only denied me because they didn't want to spot the 2% interest on the loan I could get elsewhere. TCF gave me the terms I wanted.

 

[Derec]

Also, where are these free accounts? Most banks have stopped offering those.

As we've said, banks waive those things with a direct deposit (among other things).

You know, there is one thing you need to have before you can direct deposit your paycheck. A bank account.

 

[KeepTalking]

Also, where are these free accounts? Most banks have stopped offering those.

As we've said, banks waive those things with a direct deposit (among other things).

You know, there is one thing you need to have before you can direct deposit your paycheck. A bank account.

The discussion is about poor people who do not have a bank account, and your solution is for them to use direct deposit. What is not obvious to the captain is how they are going to use direct deposit when they do not have a bank account.

 

[Toni]

Also, where are these free accounts? Most banks have stopped offering those.

As we've said, banks waive those things with a direct deposit (among other things).

You know, there is one thing you need to have before you can direct deposit your paycheck. A bank account.

And yet: your posts.

- - - Updated - - -

This isn't because you were poor, this was because you stiffed the bank.

- - - Updated - - -

Because he was poor.

 

[ksen]

Maybe if the poors took some time off from trying to scam the taxpayers and steal from the rich they'd have the time to find a bank that'd take them on as a customer.

 

[bilby]

America is weird.

I don't have a checking account, and nor do I need to cash checks, for the same reason that I don't have a slide-rule. It is the 21st Century.

A savings account with debit card and no fees (as long as you keep $10 balance and use only that bank's ATMs) can be had from any bank or credit union here.

There are few jobs that pay wages other than by bank deposit. Nobody pays wages by cheque, and only tax-evaders pay cash.

bilby, I was about to say the exact same thing. "Cashing cheques" is something that Australians did in the 1980s. Is this how Americans are paid??? Cheques?!?

It's worth pointing out though that Australian banks used to be notoriously bad with account-keeping fees. I remember back in the day (the late 80s, I think) ANZ trumpeted their "$5 a month" account keeping fee as a fantastic innovation and unbelievably good value. Now, banks offer to PAY YOU MONEY to open an account with them. If any bank tried to charge me an account keeping fee I'd laugh all the way to another bank.

I think this happened sometime in the early 2000s with the introduction of HSBC and some actual, real competition in Australia.

That sounds about the right timing; when I arrived here in '94, I recall being shocked at the account fees - not at their magnitude, but at their very existence - but they were falling fast at that time, with each small bank trying to undercut the big four, and had all but vanished within a few years. The UK banks got rid of fees for accounts in credit about ten years earlier, and I was in the habit of expecting zero fees and a token 1% interest paid to me on small deposits, so being asked to pay them for the privilege of borrowing my money seemed then to be a serious cheek.

I got a Suncorp account, because it was one of the first in QLD to charge no fees.

Ultimately it comes down to competition and customer expectations - if enough people demand a simple, 'no frills - no fees' deposit account, then the banks have to offer it, or see a sizeable chunk of cash go to their competitors.

 

[bilby]

Neither of you know what you are talking about. If you're poor you likely have bad credit from unpaid or late paid bills. Banks turn you down for checking accounts with bad credit.

I have never heard of someone getting denied a checking account for bad credit. What happens instead is being blacklisted for having your checking account closed for, as Jarhyn experienced, overdrawing the account and not resolving it in a timely manner.

And you think that such issues aren't exacerbating among the poor? The easiest solution to all this is to start postal banking like the rest of the world, and implement a new national electronic payment infrastructure that costs less and which is more secure and reliable than credit or checks.

We call that "EFTPOS" (it is a brand name as well as an acronym in Australia and NZ), and have had it in place since the mid 1980s.

 

[arkirk]

Maybe if the poors took some time off from trying to scam the taxpayers and steal from the rich they'd have the time to find a bank that'd take them on as a customer.

You suppose so? Banks are a pure rip-off. They accept large deposits because they use money to make money. Chase has one customer who has 23,000 in a savings account and made 29 cents on it. How much do you think the bank made on that deposit? We need wholesale bank reform and a number of these bank CEO's need (but will not get) some jail time for the housing market swindles they profited from.

Our country has just experienced the largest transfer of wealth from the bottom to the most wealthy. It will not be stopping till we see some powerful regulation (which Republicans and most Democrats will not support). I just wonder where Derek gets those rose colored glasses he seems to be wearing all the time.

 

[bilby]

And you think that such issues aren't exacerbating among the poor? The easiest solution to all this is to start postal banking like the rest of the world, and implement a new national electronic payment infrastructure that costs less and which is more secure and reliable than credit or checks.

Well, the easiest solution is the one everybody relied on until not all that long ago -- used to be, employers would pay an employee in cash if he or she preferred that; many paid only in cash. The banks didn't make employers stop doing that. Forcing everybody to be paid by check or electronically, and also pay a fee for the service unless they're rich enough for the interest on their deposits to cover the fee, amounts to a massively regressive tax we have imposed on the poor by our collective choice to move in the direction of a cashless society. Short of reversing that policy, reinstituting postal banking is the least we can do to make up for it. We used to have it in the U.S.; it was shut down in the 1960s.

No, the banks didn't end cash payrolls; the insurance companies did.

Factories and warehouses are simply not secure enough to hold large sums of cash; armed robbers are not stupid, and can see that a factory on payday is a soft target. Most businesses cannot afford the security necessary to defend a cash payroll. No insurer will cover them if they try, and get robbed. So they don't do it anymore.

 

[James Brown]

Chase has one customer who has 23,000 in a savings account and made 29 cents on it. How much do you think the bank made on that deposit?

No need to speculate. JPMorgan Chase's Net Interest Margin is 2.37%

Multiply that by $23,000 and Chase earned $545 over the course of a year. The costs of a checking account average $250-300 per year, giving Chase a profit of $200 to $300 dollars for offering the service of a checking account, ATM access, and a debit card accepted everywhere.

If it's important to you that a bank not earn a profit from offering a checking account, then Morgan Stanley might be a better choice. Its Net Interest Margin is a mere 0.90%, meaning it would only earn $207 on a $23,000 account, thus likely incurring a net loss over the course of a year.