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I can't help but think that there's an insidiousness behind the push to treat banking as if it's some a life fundamental. Banks are surely convenient, but they

I can't help but think that there's an insidiousness behind the push to treat banking as if it's some a life fundamental. Banks are surely convenient, but they come with tradeoffs. It's plausible that some people choose to be "unbanked" or "underbanked" because they don't like the risk profile attached to banking, and sometimes that's a totally rational decision. If you don't have a bank account, you don't have to worry about the bank inventing new fees to assess. Last time I opened a bank account, it came with a list of conditions and said 2 out of 3 of these MUST be met each month to avoid account maintenance fees. They're things like "Use your bank debit card at least 10 times this month" and "Maintain an average daily minimum balance of $x". Fret not, however, for the bank distributes a small chart that can be used to help you ensure that you are complying with their demands, and thus can avoid punishment both for not spending enough money in a way they like and also for not having enough money on deposit. If you don't spend and/or have enough, you are getting dinged each month with a non-trivial fee. Without a bank account, you also don't have to worry about information security, bank policies or hiccups impeding your access to your money, federal anti-money laundering regulations that require depositors to justify "large" cash withdrawals, state-imposed garnishments and/or levies ripping your money out from under you, and so on. So again, I have a bank account and I appreciate the convenience of banking. But I think some people choose to forgo banking rationally, and that it's not something that should be treated as a social ill. The only real potential issue around this is the regulations that the government put into place after 9/11, which may or may not be blocking some legitimate people from being legally allowed to open a bank account. Otherwise, I think it's silly to treat this like it's some big unjustice rather than a personal choice or an issue with super crappy banks ripping off depositors (which, again, hurts the poor the most; if you have $20k in your bank account, a $30 fee is an annoyance; if you have 20 bucks in your bank account, a $30 fee is now a cascade of $30 fees, and you end up owing the bank $250).

Helmet 10y ago
Having grown up in a lower-middle class neighborhood and lived among people who the OP was speaking about, I can assure you that they were not "unbanked" or "underbanked" because of any sort of risk profile attached to banking. They didn't have checking accounts because they were generally unable to attain one.
- cookiecaper 10y ago
  I'm from a similar background and this doesn't make any sense, but since I know it's going to devolve into an argument of "Well, they don't speak the primary language in the area, so they can't communicate with the tellers", "they're too old so they can't drive anymore", or "they're illiterate [either literally or financially] and their caretaker doesn't like taking them to the bank", I'm not going to go there. I'm not saying people with unique issues shouldn't be accommodated, but their problems are more basic than something that a change in bank policy/regulation will adequately improve. The issue is not about being "underbanked", it's about improving accessibility to the environment. It is true that at a time in the past, checking accounts were guarded more carefully, as the bank was fronting that money on your behalf and would have to be reasonably confident that it'd be in your checking account when they went to get reimbursed. That's not unreasonable, but checking accounts weren't the only type of account offered at the bank, and they absolutely were in wide use, even among unfortunate people, at least until they bounced too many checks. This has mostly gone away with debit cards, because the bank can now tell whether you have the money in the account or not before they approve the transaction. Last time I got a checking account, the process was a formality, and there were no eligibility requirements in excess of the documentation legally required to open an account and the (small) minimum deposit. The other thing is there's an implication here that banking is a human necessity. There's another commenter who laments that people in Nepal don't have a Mastercard. People do not have a right to banking. It's a private service, and in many ways (described above), it's not a desirable one. Banks no longer pay an appreciable amount of interest, which was most of their value proposition to the consumer before they were able to shoehorn in as the keepers of electronic payment systems. I'm just going to call a spade a spade here, and say that the reason there's a sudden interest in the "unbanked" is that they have a harder time participating in online commerce, and the government is anxious to hop on board that train because money in banks is money under their control. Some founder of an irrelevant SaaS app is lamenting that a Nepalese person may not find it convenient to pay him $10 / mo to email the local air pollution index or something. That's a pretty silly thing to try to cause a moral panic over. If we want to talk about how it's cool that Amazon has devised an electronic payment system that circumvents banking, that's great, I think it's awesome. But I'm not on board with the terms "un[der]banked" in the first place, as they imply that banking is a default, and then if we accept that, I'm still not on board with acting as if they are signals of some meaningful social malignancy.

Helmet 10y ago

Having grown up in a lower-middle class neighborhood and lived among people who the OP was speaking about, I can assure you that they were not "unbanked" or "underbanked" because of any sort of risk profile attached to banking. They didn't have checking accounts because they were generally unable to attain one.

cookiecaper 10y ago
I'm from a similar background and this doesn't make any sense, but since I know it's going to devolve into an argument of "Well, they don't speak the primary language in the area, so they can't communicate with the tellers", "they're too old so they can't drive anymore", or "they're illiterate [either literally or financially] and their caretaker doesn't like taking them to the bank", I'm not going to go there. I'm not saying people with unique issues shouldn't be accommodated, but their problems are more basic than something that a change in bank policy/regulation will adequately improve. The issue is not about being "underbanked", it's about improving accessibility to the environment. It is true that at a time in the past, checking accounts were guarded more carefully, as the bank was fronting that money on your behalf and would have to be reasonably confident that it'd be in your checking account when they went to get reimbursed. That's not unreasonable, but checking accounts weren't the only type of account offered at the bank, and they absolutely were in wide use, even among unfortunate people, at least until they bounced too many checks. This has mostly gone away with debit cards, because the bank can now tell whether you have the money in the account or not before they approve the transaction. Last time I got a checking account, the process was a formality, and there were no eligibility requirements in excess of the documentation legally required to open an account and the (small) minimum deposit. The other thing is there's an implication here that banking is a human necessity. There's another commenter who laments that people in Nepal don't have a Mastercard. People do not have a right to banking. It's a private service, and in many ways (described above), it's not a desirable one. Banks no longer pay an appreciable amount of interest, which was most of their value proposition to the consumer before they were able to shoehorn in as the keepers of electronic payment systems. I'm just going to call a spade a spade here, and say that the reason there's a sudden interest in the "unbanked" is that they have a harder time participating in online commerce, and the government is anxious to hop on board that train because money in banks is money under their control. Some founder of an irrelevant SaaS app is lamenting that a Nepalese person may not find it convenient to pay him $10 / mo to email the local air pollution index or something. That's a pretty silly thing to try to cause a moral panic over. If we want to talk about how it's cool that Amazon has devised an electronic payment system that circumvents banking, that's great, I think it's awesome. But I'm not on board with the terms "un[der]banked" in the first place, as they imply that banking is a default, and then if we accept that, I'm still not on board with acting as if they are signals of some meaningful social malignancy.