Why do some people not have bank accounts?

[MercutioATC]

Between the fees charged by stores to cash a paycheck and the fact that some companies only pay throught direct deposit or debit card, why do a significant number of people not have bank accounts?

Is there some obstacle or disadvantage of which I'm unaware?

[proud2BlibKansan]

1. If you have bad credit, you can't get a checking account

[MercutioATC]

3. What about a savings account?

A savings account entitles one to free check cashing and direct deposit...

[Divine Discontent]

4. if creditors find out you have it somehow it could be at risk, banks have to share info I think, but

you have a good point as long as you find a bank that allows you to keep a small amount in savings so that you can get those services. education about who is a good bank/CU would be helpful to many, I'm sure.

[MercutioATC]

8. I just don't understand why those least able to afford it are paying fees.

It seems that a simple savings account is a logical solution, but many don't have one...and I thought that there might be factors of which I was unaware.

[NoSheep]

67. Cash flow. The logistics of being poor are a nightmare

Today they may have the $ to pay the fee...because they HAVE to in order to cash the check...they just deduct the fee right there. - but sometimes starting an account requires minimum balance. I think it's a matter of being poor and the way money comes to you and goes away as quickly as it does. Imagine not having a permanent address or a car. Many poor people don't. How would you get to the bank to get your money out if you had to leave town for work and your ride doesn't have time to take you to the bank in the morning...you gotta go tonight.

[TxRider]

177. They are the least able to do anything about it.

[SharonAnn]

211. Banks have fees, even for savings accounts below a certain amount.

[liberalhistorian]

99. Creditors do asset searches and can

then, and often do, attach any savings accounts as well as checking accounts. And many banks and credit unions check your credit now before opening savings accounts as well as checking. It's becoming absurd.

Also, many lower-income people barely make enough for their basic needs, let alone being able to put anything in a savings account.

[Arkansas Granny]

146. That would depend on the types of accounts offered by individual banks and

how much they charge each month as a service fee to maintain the account. At my bank, for instance, I have to keep a minimum balance in my savings account or it would be slowly drained, month by month, with bank fees.

[hfojvt]

170. savings accounts require minimum deposits and balances

they kinda lock that money in. My credit union does not give rolls of coins, so I was gonna get a savings account at a downtown bank so I could use them for coins. But it was a $100 minimum, a .5% interest rate and they limited you to three withdrawals per month.

[WillieW]

205. If you have bad credit, then you most likely will not have a debit card

[WillieW]

206. Dead beat dads hide their assets.

[Recursion]

212. If you have bad credit, a bank won't let you open one

Banks check your credit and if it's bad, they won't let you have an account, particularly if you've bounced a check in the past.

[pitohui]

188. yes you can, of course you can, at least you can in louisiana

"if you have bad credit you can't get a checking account" is simply not true around here, at least not if you're white and well-spoken in english

people go bankrupt every day and still get checking accts here

[proud2BlibKansan]

208. Not true here

Bankers refuse to open checking accounts all the time due to bad credit.

[Divine Discontent]

2. not to be facetious my dear MATC

but, not having enough money to keep an active checking account active without overdrafting yourself repeatedly because you have such low funds might be part of the reason. also, if you've had problems in the past, many competing banks won't let you have an account.

others don't trust the fuckers...

[MercutioATC]

5. Again, a checking account isn't necessary.

Aside from your stated "trust" issue, why would anybody not open a savings account?

[The Straight Story]

6. What are you gonna save in it?

Living check to check many people go through their entire check within two days of getting it and are broke until the next one.

[MercutioATC]

9. The $3-$5 dollars they pay to have the check cashed??

My credit union requires a $5 balance to keep a savings account open.

If somebody can spend $5 every week or two to cash checks, why wouldn't they be able to SAVE that $5 just once to get them free check cashing?

[The Straight Story]

16. Some possible reasons:

1. Take a check to a check cashing place, get cash now. Take it to a bank and you may have to wait a day or longer for it to 'clear' (which they can do on the fly but don't - I had a check for 10k from prudential I deposited into my back account and it took a week to clear). If you need cash now - for food, gas to get to work, etc, the $3 you pay to cash it might seem not all that much.

2. Banks will screw you, simple as that- A lot of banks would fail if they did not get the fees they do from you:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x6511451
So people distrust them. Sure you save $3 today, but tomorrow you will be in the hole and owing them

-And you can overdraw a savings account and get hit with fees over it

Scenario for the above: John is at work and needs gas, goes to atm and uses card to pump gas, Linda is home and kid is sick, walks to store and uses same account to get meds. Gas may not hit account until merchant bills, etc and so on.

You can't overdraw cash, either you have it or you don't.

[MercutioATC]

20. I'll give you #1...

A simple way to avoid #2 is to just CASH the check or withdraw the entire direct deposit and keep it in cash.

If you don't use an ATM or debit card for transactions, you can't overdraw the account.

[BlooInBloo]

66. Heh. Taking a $10k check to a check cashing joint. Would love to see people do that....

Talk about fees.

:rofl:

[truedelphi]

203. Here's my sad story - a long one, but since you are asking

As a medical bankruptcy descended on my household, we also faced the crisis that our $ 957 a month COBRA insurance had run out. This meant that I, as someone making only a little money, somehow had to find a way to pay for the spouse's medicine. His diabetic supplies cost in the range of $550 to $ 750- every six weeks.

I had a checking account, and as long (KEY POINT) as there was a one hundred dollar minimum in that account, I was not charged $ 6 for the account.

One day I went to the pharmacy to get the drugs that were needed. The total came to $ 102 bucks.

My check register showed me that I had $ 105 in the account. Actually my register told me that I had $ 135 bucks there - but I mentally subtracted two other checks that had not yet cleared. (Both were for $ 15 and they would probably clear in 36 hours.) It would be a day or two before I had more money, and a diabetic needs their medicine every day, not every third day.

I pushed my way out of the drug store line and eyeballed my check register. For that moment, and that moment alone, I forgot that by writing a check for $ 102 my account would also generate a $ 6 charge for the use of the account (Remember what I said earlier - as long as my account held $ 100 +, no fees. But the SECOND that line is crossed - a $ 6 fee.)

Anyway to make a long story short, the BANK remembered the second that line was crossed to subtract out the six dollar fee. So three checks bounced and re-bounced and in the end I owed that bank $ 378 plus change. Three hundred and fifty eight bucks. For my one momentary small mistake!!

I have no bank account now. Until I pay off that money, the state of California prohibits me from having that checking account.

I use Payroll and pay check cashing offices, and yes they ding me 3% of whatever amount the check is for. So now I deal in cash only.

But I don't have these weird fees to pay NO MORE THREE HUNDRED AND WHATEVER DOLLARS! that are nothing more than usury and a pound of flesh. I no longer have a debit card, so no longer do I find out that because I purchased $ 15 of gas at a gas station, then the bank has put a hold on my funds amounting to fifty dollars (Wihtout even telling you!) so that I am out not just money spent on the gas tank but the grocery money I needed to feed my sorry face that night.

I use PayPal as my plastic though, connecting it to the spouse's bank account. PayPal is great and never puts a hold on anything.

To sum it up - Cash is great.

[redqueen]

207. Thanks for sharing your story. (nt)

[politicat]

214. You're assuming there's a CU/bank close by.

My Democratic party precinct's a good example. (I was precinct captain, so I know the area REALLY well.) Background: I live in one of Colorado's richest counties, but I live in a "transitional neighborhood" -- we have 50 New Urban Guild townhouses that are mixed; some are dedicated low income. We have two mobile home parks with about 60 lots each. We have a group of apartment buildings (about 80 addresses) that are individually owned (8 apartments to a building); all but two have absentee landlords. We also have about 50 duplexes (not rentals), 50-ish houses dating from 1900 to 1930, and a 1960s-70s development of single family homes. The NUG townhouses, the very old houses and the SF houses are all being gentrified; the rest are teetering between stability and failure. One of the MHPs has changed ownership 9 times in the last decade. (My little town is basically the county's slum.)

The closest grocery is .9 miles away, and when it closes (and it will, very soon; the store is under-performing, mostly due to wretched management) the closest grocery will be 2.1 miles away (from the center of the precinct). The closest bank (not CU) is in the grocery store. The next closest one is 1.2 miles away, and is infamous in the area for refusing accounts based on class (i.e. if I, with nearly perfect credit, walked in in flip-flops, tank-top, shorts, et cetera, they wouldn't even run my credit. I'd be denied.) The closest CU is 2.6 miles away, and is a community credit union, but like most CU's, they don't have much of a promotional budget, so most people don't realize anybody who lives in this county or the next one can join. (I didn't, until I googled.) The closest ATM is .7 miles away, is frequently out of order, and doesn't belong to any bank, so it has high fees ($3, plus whatever the home bank charges.) It's also in a seedy liquor store and a lot of women in my neighborhood won't walk in there. It's that bad.

Here's my challenge, MATC -- if you don't have children, borrow a couple. Get them tired -- really cranky. Pick either a really hot day or snow. Now put the smaller one in a wearing out stroller and make the older one walk with you. You can use suburban sidewalks -- that's what we have. Now walk with them 3 miles and tell me if having a bank account you can't access easily is worth it, or if paying a $2-8 convenience fee seems easier.

I can walk that 3 miles in 40 minutes, but a 5 year old can't. I sit at a desk all day, but my neighbor who works nights as a waitress... by the time she gets home, she's exhausted, and another 3 miles, with the kids? Cashing her check at the grocery makes sense for her because her time is worth more than $4. Same with the one who works retail. (I drive them both to the grocery on separate mornings, once a week, when they swap looking after each other's kids. Neither has a car and neither can afford one.) If the bank or the CU isn't on the way or you can't get to your money easily, there's no point. The bus takes cash. Their landlords take multiple money orders, so they can set aside money out of each check. (And before you ask, both were married, and both of their partners did a runner. The state's looking for both to collect child support.)

[hobbit709]

12. Some people don't have the necessary papers.

It was easier before Homeland (In)Security.
Some people don't want their assets seized.
Some people hate the exorbitant fees-the bank I used to be with(which was just shut down by the feds) started at $5/mo service charge on accounts with less than $250 average daily balance. By the time I told them to screw themselves, the monthly service charge was $11 with a minimum daily balance of $1000, they tried to charge 50 cents a month for the "privilege" of having an ATM card-not using it just having it.

I'm now with a credit union-no monthly fees and when I need checks they cost me $14 for 300 duplicate checks, the bank wanted $29.95 for the same.

[MercutioATC]

14. Ok, there may be a small percentage with the issues you list...

...and they're valid issues.

However, if somebody is receiving a paycheck from a legally-obtained job or getting government benefits, chances are that they have the necessary ID to open a savings account.

Your statements about fees are pertinent, but there are many banks and credit unions without those fees...

[hobbit709]

23. That percentage may not be as small as you think.

Quite a few people nowadays do not trust ANY financial institutions.

Credit unions more likely than banks to not have all the fees.
I get these ads from the banks all the time but then I read the exceedingly small print at the bottom- a lot of them say no fees if you have direct deposit or some other catch. There are many small businesses that do not have direct deposit for their employees.
I don't like direct deposit after experiencing a couple of glitches that ended up costing me money, which is why I don't allow any direct payments either.

There was a time when I used the check cashing places since for the amount of money I was paid the 1% fee was still less than what the bank wanted to charge me per month.

[NoSheep]

71. Have you ever made minimum wage for any length of time with no other

means of support?

[MercutioATC]

81. Yes, and I had a savings account.

I still paid bills in cash or by money order, but I had a savings account.

[NoSheep]

82. Good for you.

[Le Taz Hot]

7. Lack of a paper trail

If you're receiving benefits from the county, state, feds or are here in the country illegally, it is to your benefit to keep everything on a cash-only basis.

[MercutioATC]

13. I guess I should have been clearer in the OP.

You're right, of course, but I was talking about people who pay a fee to a store to have their checks cashed.

[Name removed]

35. Deleted message

Message removed by moderator. Click here to review the message board rules.

[alarimer]

45. Unfuckingbelievable

You have obviously never been poor or had to live paycheck to paycheck.

Car break downs cost people jobs if they cannot get to it.
Banks rip people off on a daily basis. Fees for this, fees for that.

Fuck you and your assumptions.

[TxRider]

69. My assumptions?

I lived my early adulthood without a checking account.

I dropped out of school at 16, first job cleaning toilets and mopping floors for $1.16 an hour
at chemical plants in Texas, the only white guy in the crew.

I've gone months with only 2-3 meals a week. Almost ended up living in cardboard box.

I've been quite poor, and not only lived from paycheck to paycheck half my life but lived with no paycheck too long at times.

What would I need a bank account for in those circumstances?

I still wasn't dumb enough to use one of those check cashing places that rip you off so bad. That would be stupidity.

I was smart enough to get a job, to use it to get a better job, to save enough to pay my way through tech school and get an even better job. To the point I could start my own business and stop living on a slave wage that low income job providers pay.

So take your assumptions and shove em where the sun don't shine.

Anyone using a check cashing place that charges so much is stupid. Stupid people make stupid choices. That's just how it is, I've known many of them in my life.

[closeupready]

85. I dont' believe you - your story is bullshit.

Fuck you and your assumptions.

[TxRider]

100. That's your choice, but it's quite true.

[closeupready]

86. dupe

dupe

[asdjrocky]

131. What is that I smell?

Oh.

[Bill McBlueState]

139. "the only white guy in the crew"

So?

[TxRider]

149. It was a fun time much of it.

The only english speaking person as well in my first and second job. That wasn't so much fun.

Then there was the crew I worked crawling into oil refinery tanks and cleaning them, the line I got then was "you may be white now, but you won't be by tonight!"

Some of the best people I ever worked with.

Just describing my early work life to give a picture, don't make more of it than it is.

[undeterred]

46. That's the George W. Bush view of the poor:

they are lazy and stupid. Or maybe its the Texas view of the poor?

[TxRider]

78. Maybe it's a poor person view of the poor.

I've been poor, a high school dropout at 16 like me has little other choice other than the military or minimum wage jobs. I was stupid to drop out, and I paid for it. Even after getting a GED in the 90th percentile it helped very little.

There is no excuse for using a check cashing place that steals your money. Sorry.

And if you deny there are simply people incapable of making good decisions, your just blind.

[undeterred]

106. Your experience doesn't give you a blanket excuse

to trash everybody else.

[TxRider]

137. I wasn't aware I trashed everbody else.

I just stated fact.

There are people out there, millions of them, that are mentally incapable of making good choices. It's just reality.

There are even more others who lack enough education and information to make good choices. They have made enough bad choices that recovering from them and changing their situation is quite difficult.

You can help that second group greatly, I know I was one of them.

The first group is a much harder nut to crack.

It's not trashing to simply acknowledge fact.

This is a discussion forum. I've lived this topic. I'm just sharing my experience.

The biggest thing you could do to help is make repeated overdrafts for the same check illegal.

I could tell you how to end most poverty from a perspective of one who crawled out of it, not all poverty which is impossible, but most, but that's a different topic.

[Gormy Cuss]

162. You didn't state fact. You stated your opinions. Own them.

As someone who also came up out of poverty to a place of self-sufficiency I really can't stand the bootstrapping speeches by people who first screwed up, then straightened up and think that because they did it, it's that simple for everyone else.

Since I didn't screw up first (I graduated from high school on time, with honors and a big fat college scholarship/federal aid package) I could consider people like you to be in the "mentally incapable of making good decisions" group and write you off. That would be a mistake, wouldn't it?

[TxRider]

169. As I said...

"There are even more others who lack enough education and information to make good choices. They have made enough bad choices that recovering from them and changing their situation is quite difficult."

If you bothered to read before bashing you might have noticed that...

If it were up to me we would be paying people in such a situation a wage to go to a school to help them, complete with child care, health care, transport, or a barrack bunk on site if need be...

And teaching basics they lacked plus training for decent paying skills and job placement.

But then your not really interested in the reality of my opinion, only your assumption of it.


As for facts, you really believe there are no stupid people in the world? And that being stupid has no bearing on making good choices? And that making poor choices isn't going to increase the likelihood of being poor?

Hmm..

[Gormy Cuss]

186. You're the one who presented your opinion as facts, remember?

I read your posts in this thread -- all of them up to the point that I posted. You were calling things facts without backing them up. Millions of people are mentally incapable of making good decisions -- that's what you stated as a fact. It's not bashing you to point that out.

Why do you feel that it's necessary to write off millions of people that way before pointing to others who would benefit from supports like better education? How do you know that most if not all of the people "making bad choices" wouldn't benefit from the same solution?

[TxRider]

201. I haven't written off anyone..

Not at all...

Just trying to convey cause of why someone pays outrageous sums to cash a check as I've observed it. This thread didn't seem the place to go into depth on how to prevent that cause or mitigate it.

I am a direct recipient of such supports. State on the job training for example where the state paid half of my wages for two years so my employer would hire and train me. It helped me immensely even if he was only doing it to get a cheap employee.

I already stated most poor people would be helped by support, and I enthusiastically support it. I quite likely support far more reaching forms of support than you do. I advocate paying a wage to every the poor to attend education and skills training with free health care, child care, transportation and even lodging. I believe the benefit derived would far outweigh the cost and is the only real solution to poverty.

Don't confuse my inability to articulate accurately enough with writing people off and condemning people to poverty.

As for stating opinion as fact, yes I did that in the end. Sorry about that. It doesn't however make that opinion baseless.

[SOS]

136. The check cashing place in my neighborhood charges 1%

It's a good service.
Cash in your pocket in 2 minutes.

Better than paying $35 fees at the bank.

[LanternWaste]

163. Or an accredited financial institution...

"There is no excuse for using a check cashing place that steals your money..."

Or an accredited financial institution which steal one's money too...

[TxRider]

171. Exactly

Which is why they don't have bank accounts....

I always found grocery stores to be a good place, or teamed up with others on pay day and went to the bank that the check was written on to cash it. Usually located not terribly far from the company I worked for.

[JVS]

141. Everything is bigger in Texas.

Especially the assholes.

[tammywammy]

47. That's quite an asshole comment. n/t

[asdjrocky]

58. Wow.

I know another website where you might be a better fit.

[QC]

60. Actually, s/he is a very good fit here. n/t

[asdjrocky]

64. Sadly, after the last couple of days, I can't disagree.

[QC]

79. Yeah, but you and I are just "hard lefties."

We need to get out of the way and let our "pragmatic" brethren have the run of everything.

[TxRider]

93. Pragmatism

That would passing a law outlawing these check cashing places.

And limiting overdraft charges for a single check.

You want to know why poor people really do not have bank accounts?

Overdrafts.

You live paycheck to paycheck, your down to your last dollar every month...

You don't have a very good education, you don't know how to properly balance a check book.

You make one mistake for a dollar or three on your balance, write your rent check, and step on the merry go round...

Your check bounces, $45 charge, landlord or whoever just keeps sending it back through, $45 dollar a pop... Before you even know it bounced you owe your next two pay checks to the bank in overdraft fees.

You can't eat, you can't pay rent, you can't even afford gas to drive to work because your check is gone in overdraft fees, and just keeps growing. It should be illegal.

[QC]

98. Yep, I've been there. Most people around here haven't though.

Have you ever seen one of those income polls that get posted here from time to time? DUers tend to be a pretty affluent bunch, which explains the utter cluelessness about how the other half lives that we see displayed here every day.

[asdjrocky]

134. Man, you gotta be one STUPID son of a bitch to get caught up in a system like that.

[TxRider]

151. No stupidity is paying $35+ to cash a check at check cashing place

If it's stupid to get caught in the overdraft spiral, you make my point brilliantly.

"The legislation may have a major impact on banks as well as customers that never incur overdraft fees. According to Michael Moebs, an economic advisor for many banks and credit unions stated that Rep. Maloney’s legislation would effectively kill overdraft services, which could cause up to 1,000 banks and 2,000 credit unions to fold within the next two years. The reason for these potential failures is that 45% of banks collect more in overdraft fees than they make in profits. In a recent New York Times article, Moebs stated, “Will they be able to replace it with another fee?” Mr. Moebs said. “Not immediately and not soon enough.”

http://www.americanbankingnews.com/2009/09/09/proposed-... /

Enough stupidity to support 1-2000 banks...

It should be illegal.

[NoSheep]

76. Wow. You are totally wrong. Look at the members of the Bush administration.

At heart they are stupid because they shit in their own house. Yet they are rich as hell.

[Raineyb]

138. Could you come up with a more dickish line?

Really, what a steaming pile of bull you just dropped there.

[TxRider]

140. Probably

But I'm a high school drop out, not an English lit major.

I don't always write well enough to convey things delicately.

[LanternWaste]

165. I imagine that were one somewhat

I imagine that if one were somewhat simple and of less-than-stellar intelligence, it would bring a great deal of both satisfaction and self-validation to lay the charge that "others" are stupid...

I suppose that's what happens when one believes themselves to be more clever than reality dictates.

ed: grmmr

[TxRider]

168. Then you must feel pretty good about now... ;)

Nobody is below average intelligence? We're all above it? Nobody is far below it?

Say you have 300 million people, lets say 96% are average, or smart enough to usually decide what in their best interest. Lets say 2% are extremely high intelligence, 2% extremely low intelligence.

That's 6 million very stupid people..... is 2% too low a figure? Too high a figure?



And how well economically are those people going to do? Will they be likely to make the best choices for their welfare?


None of which goes to the original point that if your cashing a check for an outrageous percentage your making a stupid choice... Stupid is as stupid does.

[LanternWaste]

175. I imagine that most people believe...

I'm afraid I did not state there is no one of less than average intelligence... merely that I imagine that most people believe themselves to be smarter than the "others", regarldess of whether it's actually true or not. And many of those who believe themselves to be more clever usually are the first to advertise it.

[TxRider]

179. So logic would dictate

That my telling how stupid I was dropping out of school, making minimum wage, and the predicament that put me in for half my life is somehow advertising my cleverness?

Or maybe you are the one advertising?

Project much?

I'm an intelligent guy, but I make no claim to be smarter then the average bear. I'm just relating first hand experience that I still examine and try to learn from and use to guide my decisions to this day.

Not that I would expect to receive the benefit of a doubt about intentions or intelligence on the internet...

[LanternWaste]

180. Less projection and more observation.

Less projection and more observation. I imagine we all interpret and infer at one point or another in ways which better suit our own conventions.

I'm neither intelligent, nor do I pretend to be, nor do I tell anyone I am.

ed: sp

[TxRider]

181. Well that is perfectly fine then..

And there is obvious truth to that observation in general.

And there is personal modesty in that statement.

It is however neither stretch nor boast, for a person who is of average intelligence to claim to be so.

Nor is it wrong or bashing to state the obvious reality of stupid choices or the existence of millions of stupid people.

[LanternWaste]

182. Six of one, half a dozen of the other...

One non-specific indictment based on subjective, personal observation for another, I suppose. Six of one, half a dozen of the other.

As for myself, until and unless I see objective evidence of low, average or high intelligence, I can't make any presumptions as to why a person may or may not do something considered an undistinguished, prevalent and prevailing cultural habit (e.g., opening a checking or savings account) -- I'll leave that particularly common fallacy to those who self-advertise their own sense of discernment and sagacity.

[TxRider]

184. And I'll share my observtions.. Just as you do..

From my personal experience, and we can agree or not or agree to disagree on the merits of our observations without disparaging one another and move along in a respectful manner...

[sendero]

10. Right now...

... the only advantage of having a bank account is convenience in paying bills. No bank that I know of is paying much of anything in the way of interest, so why leave your money there?

[MercutioATC]

17. Free check cashing? Having a place for direct deposit to go?

There's no requirement that you leave a significant amount of money IN the bank, but having an account does have advantages...especially for a lot of low-income workers and assistance recipients.

[sendero]

22. We have several accounts..

... but I try not to leave much cash there, savers are being penalized by the Federal Reserve's zero interest rate policy.

I have other, safer places to keep cash.

[MercutioATC]

25. Unless you're loan sharking...

...how is keeping cash better than even the pittance (possibly 0%) that a bank pays in interest?

I agree that savings accounts don't enjoy great interest rates these days, but cash gets a guaranteed zero percent.

[Statistical]

42. What is safer than an absolute FDIC guarantee up to $250,000 per account.

Plus if you need to it is very easy to get over the $250K limit.

Statistical account
Mrs. Statistical account
Joint account (Mr & Mrs Statistical)
Trust account

now you got $1 million which is insured against fraud, loss, theft, fire, etc and you don't pay a single penny for that insurance.

I find it hard to believe you have a "safer place to keep cash" unless you are talking about more than $1 million.

[sendero]

194. Let me put it another way..

.... why should I let the bank use my money for FREE? When did they ever do anything for anybody FOR FREE.

There is NO advantage to leaving my cash in a bank, and I'm not doing it. Do what you like, reward the assholes who almost brought down the economy if you so choose.

So "safer" might not be the word I wanted to use, although many have found out that the FDIC guarantee is good, but not particularly prompt.

I'm not worried about my particular bank failing, but again, why should I loan them money for nothing?

[KharmaTrain]

11. The Underground Economy Flourishes...

I've been working with a contractor. The other day I was looking at rebuilding a porch and asked him how much it would cost. He asked if I wanted it "over or under the table". I asked what "under" was and he said "cash only"...and we were talking about $5,000. He went further to say that while his workers are union (a major reason I hired him) even they are willing to go outside the union if it meant getting a little more in their pockets for the job while the customer saves on the taxes. I was told a lot of the renovation work is done this way while any new construction is done "above".

[katkat]

18. a problem with the undrground economy

Is that getting paid that way generates no Social Security credit. So they are hurting themselves when it comes to SS payments in retirement, which can last twenty years or more and stack up to lot of money.

[KharmaTrain]

21. True...But That's Of No Consequence

Also the contractor risks running into problems with the IRS if someone blows the whistle. Many try to abuse the Independent Contractor rules and if you're caught, the penalties are severe.

Right now the jobs are far and few...it's definitely a buyers market and contractor will make a lot of deals just to make sure they're getting a paycheck.

[ima_sinnic]

39. be careful with that--does their insurance still pay if one of the workers is hurt?

I just met with a contractor this morning who emphasized that he has $1 million in insurance in case of injury to himself, his workers, or to my property during construction.
If one of these "under the table" workers is seriously injured or, god forbid, killed in a freak accident (they DO happen!), might you even lose your home? or at least have to file a humongous claim with your homeowners insurance that will make your rates in the future huge?

[BumRushDaShow]

15. Many urban areas have little or no banks!

Red-lining.

http://www.huffingtonpost.com/2009/08/17/banks-added-10000-branche_n_261267.html

[Raineyb]

31. Not to mention the minimum balances necessary to avoid fees are

prohibitive. If you're literally living paycheck to paycheck you don't have 500 bucks that you can afford to be unavailable to avoid the monthly fees.

[MercutioATC]

53. $500?? There are a lot of places that require $5-$25...

...and others will waive low-balance fees for 12-18 months.


What area has no banks that have reasonable limits?

[BumRushDaShow]

80. The article I linked to

lists some of the cities that have little or no banking at all within a reasonable commuting distance... And with respect to those banks that did relent to set up shop in those under-served areas, you can look up their account types and see some burdensome minimum balances and fees (including per check, per debit, monthly). And this doesn't even count things like bounced check fees, etc.

[MercutioATC]

103. That article mentions Cleveland and South Dallas...

In Cleveland:

http://www.clevelandsaves.org/enroll/products.asp


South Dallas is a little trickier, but $25 minimum initial deposit and $4/mo service fee for low balance:

http://www.bbvacompass.com/personal/savings/basicSavings.cfm

[BumRushDaShow]

164. And go through the location finders to see where these banks are clustered...

and where they aren't. ;)

The place that your profile claims as your residence is almost a complete antithesis of Cleveland, demographics-wise. When I visited Cleveland in 2000, it was pretty sad.

[WilliamPitt]

19. Cash businesses

I know a lot of people in the service industry, especially bartenders (I know, shocking ;) ), and only one of them has a bank account (because he gets paid by check). The rest of them get paid in cash, especially tips, and none of them have bank accounts. Somewhere in their bedrooms is a drawer filled with ones and fives, they pay rent and bills in cash, and have no need for a bank account. They're also young, for the most parft, so you have to assume they'll wind up getting accounts somewhere down the road.

[MercutioATC]

24. I guess I was speaking more of people who DO receive paychecks...or government checks.

They're paying fees that they don't need to pay and, in most cases, they're the people least able to pay additional fees.

[Fumesucker]

26. Not all banks will cash a check for an account holder unless there are sufficient funds ..

In the account to cover the check.

My bank recently changed hands and the requirements have tightened considerably, used to be I had no problem cashing checks there, now they won't cash them unless I have funds to cover the check.

When you are living check to check it's not always possible to have enough in the account to cover a check you might wish to cash.

Getting _to_ the bank in the first place can be a problem if you don't have a car also, check cashing stores are often located in neighborhoods where there aren't so many banks and they tend to be close to the food stores, liquor stores and so forth. The great majority of America has no to very minimal public transport, this is particularly true in the more suburban/rural areas.


Get screwed over by the bank a time or two and you become very wary of them, a lot of people do not trust banks.

[gmoney]

27. Right...

If you have $20 in the bank, and you take a $500 check in to cash so you can pay your rent, most banks will put a hold on the check for a few days, even if it's a government check. If you're lucky, they'd let you have $20, or maybe not if the account has a minimum balance of $5. Or if they let you have the $20, and a $5 check you wrote is also presented, they'll ding you $40 for an overdraft fee, possibly several times, until the check is cleared.

Essentially, you need to have a "cushion" in your account to avoid such contingencies.

Or you can go to the check cashing place, pay $50, and at least get $450 of your money the same day.

Yes, it is predatory and ridiculous, but in most cases, it's at least "The Devil You Know."

[Divine Discontent]

28. I cannot even stand my C.Union because they are so hyper-tight with lending

they're essentially a place I can have my check deposited, but unless you have glowing credit, they aren't helpful.

and banks, yeah, right, they're predatory with their absurd fees on everything, and God help you if you make a mistake... they'll treat you like a mark of the mafia.

[Birdiesmom]

29. I tried to have a savings account at a bank...

...they demanded that I deposit money every month, or charged fees. I barely make enough to pay bills (sometimes not enough). They bled the account in fees until there was nothing left.

[Freddie Stubbs]

30. Sometimes people are too lazy to act in their own best interest

[Raineyb]

32. Typical

Obviously you've never lived in an area where there are no banks.

Why do you claim to be a Democrat again?

[undeterred]

34. Chimpy, is that you?

[asdjrocky]

37. I'm sorry,

but that is a very dumb and insensitive thing to say. Tell me, have you ever wanted for anything?

[Toucano]

156. -1

Get outta here!

[Forkboy]

159. You are so in the wrong party.

And you prove it often.

[politicat]

215. It's not necessarily lazy -- it might be a good financial decision.

I have a bank account, and direct deposit, but I had to actually go into the bank recently (I needed Saccies, for the parking kiosks, and to deposit a paper check someone had written me).

I use a great bank -- financially stable, well respected, excellent customer service. The whole transaction took about 20 minutes, from the time I hit the front door until I left. I read on my phone while I waited. (I do that a lot.)

However, the woman behind me had two children who were obviously cranky; she was there to deposit her paycheck and withdraw the max allowed ($100, until the check clears). (I let her go ahead of me when we got to the front of the line because of the kids, and I couldn't help eavesdropping.) I do know that lots of employers in the retail/service sectors don't offer direct deposit and anyone earning tips is not going to get DD. (When I was a server, I remember having to hit the bank every night and drop my tips in the ATM.)

Here's the math: it cost her 20 minutes. If she makes $12 an hour, then cashing her check for $4 and 2 minutes costs her the same, and she doesn't have to make cranky toddler and cranky kindergartner behave in the bank. That's a win. If I didn't have a bank, then absolutely, cashing my check at the grocery would be a better solution, because my time's worth a lot more than $12 an hour. (This is also assuming I didn't have all my bills set up with billpay, and I didn't have more than rent and electricity and phone -- all of which, save rent, I can also pay at the grocery store.)

[asdjrocky]

33. Have you ever lived in a "bad" neighborhood?

Have you ever lived paycheck to paycheck? Do you know you can't open a savings account with just a few dollars? (Most require at least 200.00 to open.)

Go to a more disadvantaged area sometime and take a look around. Pawn shops, check cashing and liquor stores. This country has been completely skewed for the rich for at least 30 years and the things you may find easy and common place in your neighborhood may very well be very rare for a vast section of the population.

When poor people hear stuff like this it's like hearing someone say, "Why don't they just go and get some clothes," When they see someone in rags. See, what I'm saying here is all that person may have to wear is rags.

[MercutioATC]

51. I've seen plenty that require only $5 to open.

In what area is there no bank that offers a lower initial deposit than $200???

[asdjrocky]

56. Do the research yourself.

There are people without cars who live in areas where the closest bank is 10 or 20 or even 30 blocks away. People don't even have grocery stores, much less banks. Take a drive through a neighborhood.

Honestly, please, I'm begging you, step back from this for a minute and really take a look at what you are saying. For a lot of people, they have no money at the end of the week, and a lot of times these people are working full time jobs, serving fries, cleaning up, selling you your gas, and these people really don't have an extra 5 bucks.

The poverty rate in this country is the highest it's been in 12 years. And you want to hear something really hilarious? If a family of four has 21k or less coming in they are in poverty. Just think about that, how much is your rent or mortgage, how much is your car payment, your medical, your food. I really am talking about people who are hungry. I'm talking about people who collect pennies to pay for gas to get to work. And if anything happens that's unplanned, car repair, having to buy medicine, there goes the budget. Oh yeah, you are usually a month behind on your rent and utilities.

What so many people don't understand, because they have not had to do it, when you live paycheck to paycheck, every time you get a check you are in a near emergency situation. If you don't have money today the lights go out. If you don't run money over to your landlord today you're getting evicted. If the school doesn't get the money for the field trip today your kid doesn't get to go with everyone else. Everything, for so many people that we pass everyday, has to happen today. That's what families deal with.

I'm not judging you, but your questions seems to assume a lot of people have resources that they just don't have. There's a lot of hard working people out there just barely hanging on. And there's a lot of people out there who've lost their jobs that have nothing left to hold onto.

A bank account, for most of the working poor and unemployed, is just a dream.

[MercutioATC]

59. I agree that $5 is a lot of money to some people...

...which is WHY keeping $5 (or $10, or even $25) as a deposit to have a savings account...while saving hundreds of dollars per year in check cashing fees seems to make sense.

[asdjrocky]

62. Give me a link to one bank that will let someone open a savings account for 5 dollars.

Please, I'm begging you.

[tammywammy]

63. Here you go

https://www.texastrustcu.org/pages/Savings-%7B47%7D-CDs.html

Share Account. Your savings in this plan represent your member-ownership in Texas Trust. All it takes to open is $5. This gives you one share in the ownership of Texas Trust Credit Union. Dividends accrue daily and are paid monthly for balances of $100 or more. Check out our Calculators to estimate your earnings.

[asdjrocky]

68. Can't get your link to work.

Could very well be my computer.

[tammywammy]

74. Here

The homepage is https://www.texastrustcu.org/

I've banked with them since I was 16, so 13 years now. It was only $5 back then to even open a savings account and it still is. It's open to anyone that lives in the surrounding counties as well.

[asdjrocky]

105. You win. The people that use check cashing services must be stupid.

[tammywammy]

114. Hey, you asked for one bank that would let you open a savings account for $5

And I gave you one. Where have I said ANYONE's stupid?

[asdjrocky]

120. You haven't. I apologize for implying you did.

I find this topic a bit frustrating, and I was snarky. Wrong headed of me.

[tammywammy]

127. Thank you

But sometimes even if people don't understand, they just need a little education on the topic. Someone that's never been around the truly poor may not understand why some people don't have bank accounts.

[Raineyb]

145. Credit unions have more stringent criteria for membership

you can't just walk in off the street and open an account. You have to work for certain employers or live in certain neighborhoods (which are not the neighborhoods with all the check cashing places as these neighborhoods generally have very few if any banks) I've not seen any bank that doesn't require a minimum balance on a savings account and a checking account may not clear a check right away. For people who need the money right away the bank isn't going to help them. Unfortunately in the long run the check cashing place doesn't either. But then check cashing places are basically parasites preying on those who can least afford it. Surprise, surprise.

There was a book that talked about this that came out a few years back it's called The Merchants of Misery: How Corporate America Profits from Poverty. It's still available on Amazon.

[tammywammy]

155. You have to live in a certain county for mine

"You Won’t Believe How Easy it is to Become a Member
Join more than 58,000 of your friends and neighbors who enjoy Texas Trust membership benefits. It’s easy to join today if you:


Live, work, or worship in Dallas, Tarrant or Henderson counties;
Live, work, or worship in the majority of Ellis or Johnson counties (geographic limitations apply);
Are a family member of a person who is eligible for membership"



So, yeah pretty much anyone can join, most credit unions have relaxed their standards in the last few years. And in my own case, there's a bank branch in the same neighborhood as check cashing places. I can see that may not always be the case, and there are other reasons people could choose to cash checks and not open a bank account. I don't presume to be an expert on this by any means. I've used those check cashing places, when I managed a coffee shop that was going under. I didn't even know if my payroll check would bounce or not, so yeah, it only took it bouncing in my own checking account for me to not do that again. I used a check cashing place, or I found a grocery store or something that would cash checks, I was happy to pay the $5 if I got the cash. Then I would deposit the cash into my own checking account.

The gas station I go to, I know those guys cash a lot of checks on Fridays (well they do it every day). I don't know what they charge, but I would assume they're making plenty of money off their fee.

[Raineyb]

189. Anyone can join IF they meet the criteria that criteria being living in a certain location.

Nothing in your post contradicts what I said. In fact it says exactly what I said. Except your definition of "anyone" is rather broad. If you have to live in a certain area to join it's not open membership. We're talking about areas that are undeserved by banks and overpopulated by check cashing places.

[MercutioATC]

73. Here's a list of a few:

http://www.clevelandsaves.org/enroll/products.asp#5

[asdjrocky]

83. You win.

I guess poor people are just too dumb to know better.

They've probably done something stupid like mess up a bank account in the past because they had to do something crazy like take their daughter. Maybe they bounced an ATM purchase for 39 cents and that turns into a 600 dollar bill. Don't think that happens? Happens everyday. Banks come after poor people, so do check cashing services, but with the services, it's easier for poor, stupid people to understand.

Look, I'm not going to change your mind here, or show you how hard it is for some people just to get by. A lot of people in America are working everyday and they have no bootstraps. You've refused to look at anything I've said with any compassion at all, only to prove your point that everyone needs an account so they don't get screwed by the services. Poor people are screwed either way, and most of them don't need other people telling them what to do with what little money they have.

One more thing- you found that bank on your computer right? With that high speed Internet connection, right? Think about that for one minute. Think about the fact that that bank, ain't down the street from most poor people I know.

[redqueen]

88. Just give up.

Like you said... rational, logical explanations are ignored... and pat answers delivered. This is not a discussion... it's a lecture.

[asdjrocky]

92. Hey redqueen.

Good to see you as always. Man, I'd hate to think of what would happen to some of these people if they ever really found themselves hurting. Maybe then they'd see.

When things are hard for people, everyone wants their drop of blood.

[redqueen]

97. Hi there...

good to see you too. Unfortunately sometimes being in those circumstances only hardens people's hearts. A subthread above proves it.

Makes the world a much better place, doesn't it? :sarcasm:

[MercutioATC]

90. I realized that it may not be an option for EVERYBODY, but it is for many.

Just as accessing the internet at a public library may not be an option for EVERYBODY, but it is for many.

[asdjrocky]

102. Where's the libary in your neighborhood?

How close? I give up.

[MercutioATC]

109. About a 10-15 minute walk.

As I said, not everybody has easy access to a public library, but many do.

Since south Dallas seems to be an area of interest, let's look there:

http://maps.google.com/maps/ms?f=q&hl=en&geocode=&ie=UTF8&om=1&msa=0&msid=112145941980716723888.00044459ab254536b0170&ll=32.78612,-96.753159&spn=0.428903,0.639954&z=11


One might not live next door to a library, but there seems to be decent access to the public library system in south Dallas.

[asdjrocky]

110. Then I guess you've got it all figured out.

Those poor people only have themselves to blame.

[MercutioATC]

123. Show me ONE post in this thread where I assigned blame.

I asked for reasons why people wouldn't open a savings account to avoid check cashing fees.

Plenty of people have responded with different reasons...and I've tried to reply to all of them.

You mentioned high initial deposit requirements and I replied that some institutions didn't require more than $5 (which I linked to). I further stated that while I realized that not EVERYBODY had local access to low-balance requirements, many did.


Where did I "blame" anybody?

[asdjrocky]

125. I've given you reasons. Lot's and lot's and lot's of reasons.

I'm done.

[CTyankee]

116. This problem contributes to crime. Here in New Haven we had a serious

problem with the fact that many poor people (and some of them illegal aliens) kept a lot of cash in their apartments. There was a lot of B & E (and worse) as a result. At the core of the problem was lack of proper ID. The City of New Haven started issuing residents ID cards, after getting the local banks on board for honoring these forms of ID so people could open accounts.

We had a big fuss from some out of town and out of state Birchers (yes, they still exist!) who can't stand the idea that "all those illegals" are able to get bank accounts. New Haven liberals (LOTS of Yale professors) showed solidarity by signing up for the cards, so it wouldn't look like just one group of people had the card. We use ours whenever we can, even tho we have accounts and we have all sorts of ID.

[myrna minx]

147. Thank you for this very thoughtful post. n/t

[Raineyb]

143. You can open with 5 but if you don't get the minimum balance up you pay fees

The minimum is usually a few hundred dollars.

[Arkansas Granny]

160. Where I live, there are areas where there are no banks at all within walking distance

and our public transit system, while better than nothing, would still leave many in the poorer areas of town with long walks to get to bus stops or banks. Check out this map to see how many areas of our town don't have any banks available, let alone those that charge no service fee on small accounts.

http://maps.google.com/maps?hl=en&source=hp&rlz=1R2GGLR_enUS342&um=1&ie=UTF-8&q=banks+fort+smith+arkansas&fb=1&split=1&gl=us&ei=e3SqSubDOdWjnQe4ndypBA&sa=X&oi=local_group&ct=image&resnum=1

[TBF]

36. Blaming the victims again.

I see it so much out there. Have you ever given thought to why the super rich are able to keep billions in their accounts while others starve on the street? Try pondering that for awhile and we'll see if you actually have a heart and/or empathy for other humans.

[MercutioATC]

50. For fuck's sake...I'm not blaming anybody.

I'm asking for reasons why people who have to pay to have checks cashed don't have bank accounts (where they could get there checks cashed free).

[TBF]

89. You've learned nothing. More thinking. n/t

[JeanGrey]

38. Probably like my son. He still owes his last bank 200 bucks

in overdraft fees and can't get another account. At that time he was making good money, but he has always been very lazy in keeping up with things.

[tammywammy]

40. I don't really understand it

And the little gas station by my house, on Fridays is always packed with people cashing their pay checks there. I don't know how much Ali & Islam charge to cash a check, but I know it's not free.

The only time in my life when I would rather pay the money to cash a pay check and not just deposit it, was when I managed this coffee shop and it was going under and you never knew if the payroll check would bounce or not. I would get the cash and then go deposit it in my bank account

[joeycola]

41. I worked in an area of the country last spring

and found out that many did not have bank accounts. Upon receiving their work checks, they lined up (line lines) at mobile vans who cashed their checks for a fee (different companies had various fees/per 100 dollars). Call me naive, --but I asked why people went from the line of getting theirs checks to the mobile vans parked outside of the company. It was an awakening.

[lurky]

43. Holds on checks. Plus, monthly fees are often

larger than the check cashing fee if you do not keep the minimum balance. Bus fare to the bank is going to be a couple dollars, in addition to lost time spent getting there. Add to this the $4 in ATM fees they end up paying when using an out-of-network machine, which people in poor neighborhoods would have to do because there are no banks there. Then when the fees overdraft the account because the person is living so close to the edge, they get hit with more fees because they are overdrawn. Eventually they end up owing a lot of money and just walk away from the account.

Then, there is the respect factor. Poor, scruffy, dark people are not usually welcomed with open arms when they walk into a bank branch. At best, they are seen as unprofitable and undesirable, and at worst they are treated like potential criminals.

Finally, there is the long history of banks redlining minority neighborhoods, practicing predatory lending in those communities, and just generally being assholes to poor people. That will make people unwilling to deal with them.

You certainly won't find a lot of love for check joints among the people who use them, but the decision to use them is not irrational: They want their money immediately, in their neighborhood, with no bullshit or games. And I think it's probably cheaper for people in that situation.

[tosh]

54. Most accurate reply of all.

:thumbsup:

[redqueen]

65. Thanks... exactly. The best response, and it just gets ignored...

"Then, there is the respect factor. Poor, scruffy, dark people are not usually welcomed with open arms when they walk into a bank branch. At best, they are seen as unprofitable and undesirable, and at worst they are treated like potential criminals."

This has a lot to do with it. They know right off the bat that too many others consider them less-than (look at this thread... people calling them stupid, lazy, etc.) Doesn't exactly help.

[Spazito]

113. Excellent response! n/t

[Raineyb]

150. I wish I could recommend this response.

:thumbsup:

I used to use check cashing places because I could not keep the minimum balance for a bank account. At the time it was 500 bucks. I just couldn't afford to keep 500 bucks out of reach to avoid paying fees on the account. When I found a bank with free checking I had to take the bus to get to it. It was out of the way and didn't have a lot of ATMs available and the savings account still had a minimum balance of 200 dollars.

[myrna minx]

152. Excellent reply! n/t

[alarimer]

44. Because of the fees banks chanrge if you do not maintain a balance

People who live paycheck to paycheck likely cannot maintain a minimum balance (which at my bank in Florida years ago was $1000). You get charged if you don't maintain that balance. I still cannot keep a $1000 minimum balance, though I am making more money now. And the fees on top of fees that banks charge for every little thing under the sun.

[MercutioATC]

52. Not all banks do that.

My credit union requires a $5 balance. Looking online, I see many institutions that require low amounts...and some that will waive any low-balance fees for 12-18 months.

Yes, minimum balances are an issue, but there are plenty of institutions that either have very low requirements or will waive fees.

[earthboundmisfit]

48. Chexsystems blacklisting can be a big problem

What the banks know about you (but won't tell you) and why it matters
~snip~
" The point is to reduce bad check losses, a $30-billion problem for banks last year. The downside is that consumers who end up blacklisted by ChexSystems can have difficulty opening an account for up to five years.
~snip~
And, as is the case with credit bureau data, correcting inaccurate banking information can be a lengthy process. (See related column about my experience.) Under federal law, consumers have the right to one free report a year from consumer reporting agencies such as ChexSystems, but most aren't aware ChexSystems exists until they've been denied a bank account."

~snip~


Couple more:
http://www.articlesbase.com/advice-articles/is-chexsystems-justified-70769.html

http://www.alternet.org/story/9249

[harun]

49. Fees, untrust, usary, lack of money, not wanting to contribute to the

system of bank corruption, etc.

Take your pick. I wouldn't have one if I could. Work makes me direct deposit.

[robcon]

55. Hiding money from ex-spouse is a common reason, IMO

I know a lowlife co-worker who does that to keep from paying child support.

[MercutioATC]

61. I'm not concerned about people like this.

If you're paying check-cashing fees to avoid legal responsibilities, I have no sympathy.

There are, however, a lot of good, law-abiding people who are paying these fees when it's probably not necessary.

[TransitJohn]

57. No but let's mandate

that everyone has a bank account, that way the rates my bank charge me will go down. :sarcasm:

[BlooInBloo]

70. For the most part, they're kooks. A small number have this-or-that credit, etc. issue.

[asdjrocky]

87. Kooks? That's a joke, right?

[TBF]

91. He's not joking. He really feels that way.

The amazing part is that he calls himself a dem.

[BlooInBloo]

95. Ohnoes. You found me out. Sigh.

[Forkboy]

107. His/her's/it's view of the world seems to be mind bogglingly shallow on almost every issue.

This comment here is one of the deeper ones we'll ever see out of Bloo, and I suspect it's as deep as it gets.

[laughingliberal]

72. I have an account but I do not keep much in it

I only maintain it for a couple of bills which are paid automatically. I only keep enough money in it to cover these. Otherwise, we cash our checks at the issuing bank. Reasons are that we are often near broke and we can't wait on the 2-5 business day hold the bank often puts on deposits that are not cash. We are also on the verge of bankruptcy and, until we can get it filed, our creditors can discover and seize any accounts they find. If all our money was in a bank account we would wind up without enough money for food or gas in the care.

[slackmaster]

75. Lots of reasons

Some have credit problems.

Some never have enough cash to open a minimal account.

Some are grossly inept at handling money.

Some choose not to for personal reasons.

[KansDem]

77. I used to work with someone who cashed his paycheck at a nearby liquor store...

I used to drive him over after work. I never asked him but figured it might have to do with his transient lifestyle. He had family in KC and Chicago...

[EndersDame]

84. When I did not have a car I used the Money Box since it was easier to get to

Or using the business center in a grocery store.It sucks having to wait 30-40 mins for a bus (both ways and that is not even counting your transfer buses)

[closeupready]

94. Keep in mind that banks sometimes aren't located in low-income areas.

It may be different now, but at one time, I know banks simply didn't open branches in low-income areas where crime may have been an issue.

[liberalhistorian]

96. Banks check both your credit and

bad check reporting bureaus (can't remember the name of the main one right now); if you have any blemishes they don't like, or are below a certain score, you don't get the account. And then your credit is screwed more because the inquiry shows up on your report. Even credit unions pull this shit now, which is ridiculous. Banks have a lot more recourse than creditors if you bounce a check, they just close the account/don't pay the check.

And context be damned. It doesn't matter to the bank if your credit is blemished because of medical bills, job loss, illness of family, inability to find another job, etc., etc., etc. They don't give a shit, just like creditors and employers and insurers don't give a shit. Soon, you can't get a job or a bank account, which is nuts. It becomes one vicious cycle that gets very hard to escape. Poverty really is punished in this country.

[earthboundmisfit]

148. I think the Chexsystems blacklist is what you're talking about

Ostensibly and originally it was to protect against fraud, which is fine, but it's grown into a
tool to punish poor people - and most people don't even know about it, till they're denied a checking or savings account.

[ipaint]

101. The downside is too high a risk

A bounced check due to a math error, deliberate check floating in an attempt to pay bills on time, or unavailable funds usually means electricity is shut off, rent can't be paid, or no food this week. Banks make their money on punitive fees. There is a reason for that. They know poorer people will eventually make a mistake or take a chance on a check to pay a bill and when that happens the resulting cascade of fees can eat up the next paycheck.

All banks where I live require a minimum balance in a savings account or you will be charged fees.

When the downside risk is the same as those with enough money to cover costly mistakes or holds on funds or even normal fees then more poor people will use banks.

[MercutioATC]

104. Depending on where you live in Florida, here's one that doesn't:

$25 to open:

https://www.53.com/wps/portal/pv?New_WCM_Context=/wps/wcm/connect/FifthThirdSite/Personal/Savings+Accounts/Fifth+Third+Goal+Setter+Savings/

[ipaint]

108. And if you don't have $50.00 to tie up or the $25.00 to lose

should you need all the money in the account and are forced to close it.
I've counted pennies to make rent many times.

"A $50 minimum balance is required to open this account. A $25 early closure fee will apply to any account closed within the first 180 days of account opening."

[ipaint]

111. Plus walmart cashes payroll checks for $3.00

For paycheck to paycheck folks getting paid every two weeks, thats competitive with the banks. It certainly carries no risk, even for folks who get paid weekly, of being fined out of house or electricity or food should you bounce a check.

[MercutioATC]

115. $50 to OPEN....no minimum balance.

Open it with $50 and withdraw $45...you're only tying up $5.

[closeupready]

117. It doesn't seem like you are getting it, are you?

n/t

[MercutioATC]

119. I do understand the issues, I just don't believe they apply to everybody.

While there are some people who either don't meet the requirements for a savings account that works for them, here are plenty of people who COULD benefit who just choose not to.

Especially in areas with good access to credit unions, there are a LOT of people who could save money by having a savings account.

[closeupready]

121. Credit unions are not open to the general public.

n/t

[closeupready]

124. Further, presumptuous of you to think everyone understands what a "credit union" does

For many people, if it isn't a "bank" and doesn't have the word "bank" in its name, it isn't a bank, period.

[MercutioATC]

128. Incorrect.

That used to be the case, but the laws have changed.

The requirements to join my credit union:

You must live, work, go to school, or go to church in Lorain County, Ohio. That's over 300,000 people who are eligible.

[closeupready]

132. If I didn't know that, people struggling to buy food aren't going to, either.

n/t

[MercutioATC]

135. So, maybe ane of the reasons is a lack of education.

That one, at least, seems correctable.

[closeupready]

144. Yes, I agree. I do think lack of education plays a role.

Particularly, lack of financial education, educating smart consumers. We don't do that in this country.

[Raineyb]

154. That's not the general public

The person who lives just beyond the county line and doesn't work go to school or church in the county can't open the account.

The general public means anyone regardless of circumstances would be able to walk in and open an account. You just defeated your own argument.

[MercutioATC]

166. Of course it is.

There are credit unions in neighboring counties that have the same requirements.


ANY of the over 300,000 people who have anything to do with Lorain County have access to this credit union.

[Raineyb]

190. You act as though there are credit unions in every county just waiting for people to open accounts

that is not the case. We're talking about areas that are not served by banks (or credit unions) and overpopulated with check cashing places. Most people are not willing to travel long distances to do their banking.

You asked a question but seem rather intent on finding some reason to blame the people who use the check cashing establishments for their fate. Why even bother to ask if you're not interested in the answer?

[MercutioATC]

192. I simply pointed out that there ARE credit unions available to the "general public".

No special requirements as there used to be. Yes, they're limited by geography, but ANYBODY within a certain geographical area is eligible for membership.

...and again, I'm not assigning ANY blame here. The fact is that cashing a check has a cost to the cashing institution. It's reasonable to pay a fee for that. However, most "banking" institutions don't charge a fee if you have an account there. I'm looking for reasons that people don't avail themselves of that.

[Raineyb]

197. And I'm saying the geographic requirement means it is NOT open to the general

public.

The general public, last I checked meant anyone can walk in. If there's a restriction it's not open to the general public.

[MercutioATC]

198. Fair enough

NO institution is going to allow access to just ANYBODY that walks through their doors, but you're correct...not EVERY person who wants to can join a given credit union.

[Ferret Annica]

112. I have not had a bank account since 1996

I use a small community credit union. Screw the banks.

[MercutioATC]

118. I was using "bank account" in the generic sense.

I had to open an account at Key Bank about 3 years ago to get an international money order (in Pounds Sterling). Other than that, I have not had BANK account in 18 years...I have accounts with a credit union.

[ipaint]

122. Opps, looks like all those stupid, ignorant poor people

where right.

"The legislation may have a major impact on banks as well as customers that never incur overdraft fees. According to Michael Moebs, an economic advisor for many banks and credit unions stated that Rep. Maloney’s legislation would effectively kill overdraft services, which could cause up to 1,000 banks and 2,000 credit unions to fold within the next two years. The reason for these potential failures is that 45% of banks collect more in overdraft fees than they make in profits. In a recent New York Times article, Moebs stated, “Will they be able to replace it with another fee?” Mr. Moebs said. “Not immediately and not soon enough.”

http://www.americanbankingnews.com/2009/09/09/proposed-debit-card-regulations-could-cause-1000-banks-and-2000-credit-unions-to-fail/

What would the comfy classes do without the working class and the working poor financially supporting, through punitive fines, their corrupt financial systems.
Probably post in threads on a democratic discussion board about how ignorant and stupid the poor are.

[TxRider]

126. They may be ignorant and stupid, those people do exist.

But one trip around the overdraft merry go round and they are smart enough to avoid a bank account.

It should be illegal and I sure hope such a law passes.

[ipaint]

130. Exactly. n/t

[TBF]

167. Nailed it. n/t

[JVS]

129. Because they're poor.

Keeping an account can actually cost money if the balance is low, and then there is the added risk of an insufficient funds fee. So price of getting them cashed is actually cheaper than dealing with the bank. Assuming someone gets two paychecks a month, and that the insufficient funds fee is $40 and not charged several times by banks double and triple bouncing, and that the bank charges $2/month to keep the account open, the price for using a bank is $2+$.40P where P is the percentage chance that they will overdraw the account. Many simply prefer to pay the money to the check cashing service and not have to worry about penalties. So, why don't they just act responsibly and make sure the balance doesn't go negative? There are numerous reasons. Suppose they need gasoline and use a debit card, generally the gas station charges $50 upon insertion of the card and then refuces the charge later to make sure that people don't end up stiffing them. For someone with a small account, this can tip it negative. Similarly a lien on their checking for child support or some other legal entanglement can throw the whole balance to hell as well. Also poor people tend to have to move frequently. This means lots of giving out the SS # for credit checks. This makes them more at risk for identity theft and even if you straighten shit out about who took the money out, you have the bank fees accrued to fight and this is how the banks make money. Since you're not well positioned to fight the bank, you lose, and they eat up your next check.

[Name removed]

133. Deleted message

Message removed by moderator. Click here to review the message board rules.

[dana_b]

142. irresponsible kids

my daughter (19 y.o.) and her boyfriend both got accounts and both have gotten at least two overdraft fees in the last month. Her boyfriend got a $25 fee for buying a pack of cigarettes. sigh.

I've shown her how to keep track and to manage a checking account but she STILL doesn't bother. The point is I wish they'd both either close their accounts or start checking the balances EVERYDAY so they won't have this happen. Otherwise they shouldn't have accounts.

[paparush]

153. Maybe they are tax resisters who don't want to pay for war. eom

[Gormy Cuss]

157. Lack of money.

And believe it or not, a check cashing fee can be cheaper than the slew of fees that many banks charge these days for low balance customers. Even with direct deposit some people aren't welcomed by the banks. They're charged fees for checking balances or for withdrawals.

Then there's the issue of whether there are banks with low fees in the proximity to where one lives or works. Drive around a neighborhood with check-cashing stores and count the number of bank branches. It's not hard to see why people are using the check-cashing store.

[MercutioATC]

174. Ok, financial advantage and proximity.

Those are two good reasons.


I agree that those situations DO exist.

I'd argue that there are still a lot of people who would benefit from having an account who, for whatever reason, do not. Perhaps education is a bigger issue than I first realized.

[LaydeeBug]

158. Why Should People have to trust a corporation with their money if they wanna keep it under the bed,

so be it. I find this OP to be a little disturbing. :hide:

[MercutioATC]

173. They shouldn't.

But cashing a check DOES have a cost associated with it.

If somebody chooses not to have an account with an institution that will cash checks as a free service, they should expect to pay a fee.

Note: This is not meant to imply that everybody without an account chooses not to.

[W_HAMILTON]

161. Not to derail your thread, but....

....why do people that have bank accounts and debit cards choose to pay by cash? I work at a hotel, and there are numerous problems with a guest holds their reservation with a debit card, then wants to pay cash when they get there? Uh, why? We are going to have to authorize the first night's stay on your debit card (which immediately removes the funds from a debit card), then either cancel the authorization -- which still takes several days for the bank to release the funds back into your account -- or go through a long, drawn-out process where you have to charge the card for the amount held, then have the person pay the remainder in cash. And normally, they don't understand the reason for doing this.

So, please give me a reason why people with debit cards use cash. Given the deals that some banks given for using your debit card (like a certain amount being deposited into a savings account), why go with cash?

[MercutioATC]

172. Because they don't understand the process.

I generally only carry cash for tips, but I'd bet that most people don't understand that the funds are held by their bank and that it's extra work for the establishment.

[TxRider]

176. If you would hold a reservation without a card number

They wouldn't use one for that in the first place.

So the policy of only holding a room if a card is used is the issue.

[SoCalDem]

178. the days of "your friendly, neighborhood bank" are gone forever

Schools used to have field trips to "the bank"..where they would take the kids into the vault, show them the safe-deposit boxes, and at the end of the trip, actually open up savings accounts for all the kids who brought a dollar with them.

The idea was to get the kids interested in banks, at the 3rd or 4th grade level, and then they would have Mom go to THEIR bank with them every week, to add to THEIR account...so if 3 or 4 kids in a family had money at the bank, Mom & Dad might just use that bank too (many probably already did, since small towns often only had 2 banks:)..)

Banks advertised on the radio to get people to open Christmas Club Accounts.

That's the way most people did their Christmas shopping. They opened an account in January, added to it every week, and in November when they bank sent you your check, that's what you had for gifts. People did not "charge it!".

These days, many banks do a credit check for new accounts, and you have to have TWO picture IDs to even open an account.

When my friend left her husband last October, I helped her open an account at my bank, and I had to be ON the account with her for the first 3 years, for them to even open the account...why?..because she declared bankruptcy in 2003..and this was for a savings account..not even a checking account.

[TxRider]

185. Yup

I always did business with small local banks, each one swallowed up by a large bank.

I've run out of local banks to use these days since my last local bank was bought by Wells Fargo.

[Taitertots]

183. Fuck the banks

They have taken more from me in fees then they have ever given me in interest.

Keeping money in a bank is almost surely a net loss.

[pitohui]

187. you have to have legal identification to have a bank account

i know lots of bankrupts who are white "middle class" bankrupts or at least middle class in appearance/childhood upbringing -- they can get a bank account just fine with a driver's license to prove who they are and avoid the high fees -- you can open a free checking acct at a local bank i use just with $50, a legal driver's license from my state, and a physical appearance in person -- that $50 will save you hundreds over the year over paychecking cashing store fees

the people paying those huge fees at check cashing stores around here are hispanic or black people who for whatever reason don't have a driver's license/passport/state identification card and don't understand that paying $20 for a driver's license one time in 4 years comes out cheaper than paying more than $20 each month in fees/check cashing costs

i don't know why convicted drug dealers/users who have lost their licenses don't get state ID cards, maybe they don't know that they can

illegals obv. don't have genuine ID, the fake stuff may be OK for a check cashing place but a bank faces real sanctions under money laundering laws for accepting false ID

[MercutioATC]

193. Thanks for bringing this up.

You're right, many people don't have ID...but, as you said, it's relatively easy to get and it can save you hundreds a year in fees.

I support the concept of voter verification, but not until we find a way to get free legal proof of identification to EVERYBODY. Perhaps solving that problem would partially solve this problem too.

[DarbyUSMC]

191. My achin' back.

I've asked myself this question lots of times. Many of the older people in my building still get their SS checks in the mail and go out and get money orders once a month to pay their bills or go from place to place to pay them after cashing their check somewhere. (I don't know where). These aren't people who have computers so they couldn't pay things on line, even if they had a bank account. Once upon a time I thought the Federal govt. strongly advised anyone on SS or getting a govt. pension of some sort to have direct deposit due to an inordinate amount of mail theft on the first or third of the month. Many banks have no monthly or check writing fees for direct deposit customers whether the money comes from a job or assistance of some sort. You do have to buy the blank checks once or twice a year depending.

All parts of the country are different I guess. After my husband and I parted in 1975 I was on assistance for four years when my children were very little. At that time, checks came in the mail and you bought Food Stamps at the bank in town. I opened an account there and paid my bills by check and by the end of the month my balance wasn't much until the next check I'd deposit on the first of the month. I wouldn't write a check for an amount of money that wasn't there. There was no minimum balance to keep; it wasn't an interest bearing checking account.

I have direct deposit in a bank 20 minutes from my place by car. (I don't drive.) I've never been there. I opened the account in 1991 when I lived somewhere else and never went back after I opened it. That's how convenient direct deposit is to me. I use my debit card in stores and if I want cash, get it in the transaction for fifty cents.

To each their own.

[4lbs]

195. Many banks require a lot of hurdles to jump through just to open an account.

Let's ignore the minimum opening balance, monthly fees, and overdraft charges for the time being. These things already slap around the poor (figuratively) more than they do even the middle class.

For many banks, to open an account, you need at least TWO forms of identification. In addition, quite a few banks also require proof of residency (i.e. utility bill, mortgage bill, or renter's agreement form).

Now about that TWO forms of identification.

The first one is usually Driver's License or State ID card (for those that don't drive or have a DL).

What's the second one that banks usually accept?

Well, you can show a credit card. Most often a VISA or MasterCard. However, poor people usually don't have credit cards. Besides, VISA/MC credit cards are issued by... banks! So, in essence via this angle, you sometimes have to have a credit account with one bank to open up an account with another!

Passports are good. However, poor people don't travel, especially outside the country, so what use is a passport to them? They likely won't have a passport.

Company ID card with photo and name is good. However, many poor people work in jobs where such photo IDs are not assigned. Also, what if a person is not necessarily poor, but self-employed? No chance of a "company" photo ID then.

A resident alien is somewhat lucky in this regard, since a Permanent Resident Alien card (formerly called a 'green card') is now permissible at a lot of banks. Not all, but a significant portion. However, what about poor people born in this country? They don't have these cards do they?

So, how is a poor person going to obtain a valid second form of ID to satisfy a bank's requirement for opening an account?

[MercutioATC]

199. Wouldn't a SS card fulfill the "2nd form of ID" requirement?

A DL or state ID and a SS card.

No?

[4lbs]

204. Nope. At least here in California. I tried a Social Security card when I opened up my accounts

some years ago. It wasn't acceptable as a form of ID.

Other than a credit card, both forms of ID must have your photo and name on it.

[jeffrey_X]

196. IF YOU DON'T HAVE ACCESS AND DON'T HAVE MONEY, WHY HAVE A BANK ACCOUNT????

Some people don't live near banks. Some people live paycheck to paycheck. If you have no extra cash, what good is a bank????


To avoid the fees, they can cash the check at the bank where it was issued.

[MercutioATC]

200. "they can cash the check at the bank where it was issued"?????

Where would they cash unemployment and welfare checks??

[ipaint]

209. Wachovia cashes unemployment checks for free in florida.

Last time I had a savings account you couldn't cash a check unless you had the funds to cover it in the account. You had to deposit it and wait for it to clear. Like I said walmart cashes payroll checks for $3.00.

I don't do business with banks and I don't use credit cards. I own my own vehicle outright and I take care of it and I rent. What the heck do I need a bank for.

[closeupready]

202. Actually, in New York, you can't always cash a check at the bank where it was issued

unless you have an account there. It's been a few years since I tried to actually do this, but banking laws here are outrageous.

[mockmonkey]

210. Banks around here

charge you $5 to cash checks from an account at that bank if you don't have an account there. Easier to go to the nearby check cashing place and pay the same.

[Marlana]

213. I don't have a bank account

I filed bankruptcy a few years ago and can't find a local bank that will open one for me unless I keep a minimum balance of around $100 in the account. I don't always have that much money so I just do everything in cash or I borrow my mom's debit card if I need it. If I need to cash a check I just have my parents deposit the check into their account through the ATM, it's free, and then they withdraw the cash and give that to me. I have been thinking about just jumping through the hoops to get a checking account lately, it would be so much more convenient.