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Just to play devils advocate (because I'd truly love it if companies didn't do this, and people didn't think they needed them) 1. What would sensible regulatio

Just to play devils advocate (because I'd truly love it if companies didn't do this, and people didn't think they needed them) 1. What would sensible regulations look like in this sector? 2. There are people who choose to not get bank accounts and do their banking at payday loan stores despite the obvious costs. If regulation drives costs up or companies out of business where would these people go?

elliekelly 8y ago
> 2. There are people who choose to not get bank accounts and do their banking at payday loan stores despite the obvious costs. Most of these people are not unbanked by choice. They can't afford a bank account. It sounds crazy to most of us because our bank accounts are "free" but they often have stipulations attached: minimum balances, direct deposit, x number of transactions per month. And don't forget how quickly overdraft charges can add up. People who are making minimum wage and living paycheck to paycheck simply can't afford all of the costs that come with having a bank account because it's actually cheaper for them to use a payday lender than to pay $75 in overdraft fees at the end of every month.
- ceejayoz 8y ago
  It would be nice if we'd institute the EU's right to a basic bank account. https://europa.eu/youreurope/citizens/consumers/financial-products-and-services/bank-accounts-eu/index_en.htm https://europa.eu/youreurope/citizens/consumers/financial-pr...
  - dwighttk 8y ago
    But where do the people who don’t want to bank go?
    - ceejayoz 8y ago
      As the parent post states, "most of these people are not unbanked by choice". https://www.ozy.com/acumen/one-out-of-every-4-americans-is-underbanked/87796 https://www.ozy.com/acumen/one-out-of-every-4-americans-is-u... > In this area, the United States lags behind other developed nations. The percentage of Americans who are completely unbanked is 7 percent. For comparison, a 2014 World Bank report shows that the percentage of Canadians without a financial institution account is less than 1 percent; Germans, less than 2 percent; and Spaniards, less than 3 percent.
      - dwighttk 8y ago
        That's why I used the word "but"... Some reading I've done on check-cashing and payday loans: https://www.businessinsider.com/check-cashing-stores-good-deal-upenn-professor-2017-2 https://www.businessinsider.com/check-cashing-stores-good-de... (I was able to read this using reader mode in safari) https://www.theatlantic.com/magazine/archive/2016/05/payday-lending/476403/ https://www.theatlantic.com/magazine/archive/2016/05/payday-... full list here: https://pinboard.in/search/u:dwight?query=payday https://pinboard.in/search/u:dwight?query=payday
        elliekelly 8y ago
        Right in the first article you've linked is exactly what I've told you three times, underprivileged people can't afford banks: > "People told me they were saving money by going to the check casher instead of the bank," Servon told Business Insider.
- dwighttk 8y ago
  While true, there are people who chose to not use banks. Also, there are banks without all that. Maybe it’s impossible to get now (because I started with ING) but my checking and savings with Capital One have no minimums, no direct deposit required, & no transaction requirements. They both actually pay interest (not much on the checking). (As far as overdrafts go they offer what amounts to a low max credit card to back the account where the interest rate is the only penalty, i.e. no fees) On the other hand, I’m sure that last one isn’t great with bad credit, and perhaps the accounts were only available to me because my credit.
  - elliekelly 8y ago
    > On the other hand, I’m sure that last one isn’t great with bad credit, and perhaps the accounts were only available to me because my credit. Not only would an underprivileged person never have access to an overdraft line of credit as you do, they very likely wouldn't even be permitted to open the account. Most people don't know that you actually have to be approved for a bank account. Most banks won't permit you to open an account until they've run what's called a "Bank History Report" on you. It's similar to a credit report but focused on your banking habits. For most people it's just a formality, for underprivileged people, it's serves as a complete bar to their ability to access our financial services system.

elliekelly 8y ago

> 2. There are people who choose to not get bank accounts and do their banking at payday loan stores despite the obvious costs. Most of these people are not unbanked by choice. They can't afford a bank account. It sounds crazy to most of us because our bank accounts are "free" but they often have stipulations attached: minimum balances, direct deposit, x number of transactions per month. And don't forget how quickly overdraft charges can add up. People who are making minimum wage and living paycheck to paycheck simply can't afford all of the costs that come with having a bank account because it's actually cheaper for them to use a payday lender than to pay $75 in overdraft fees at the end of every month.

ceejayoz 8y ago
It would be nice if we'd institute the EU's right to a basic bank account. https://europa.eu/youreurope/citizens/consumers/financial-products-and-services/bank-accounts-eu/index_en.htm https://europa.eu/youreurope/citizens/consumers/financial-pr...
- dwighttk 8y ago
  But where do the people who don’t want to bank go?
  - ceejayoz 8y ago
    As the parent post states, "most of these people are not unbanked by choice". https://www.ozy.com/acumen/one-out-of-every-4-americans-is-underbanked/87796 https://www.ozy.com/acumen/one-out-of-every-4-americans-is-u... > In this area, the United States lags behind other developed nations. The percentage of Americans who are completely unbanked is 7 percent. For comparison, a 2014 World Bank report shows that the percentage of Canadians without a financial institution account is less than 1 percent; Germans, less than 2 percent; and Spaniards, less than 3 percent.
    - dwighttk 8y ago
      That's why I used the word "but"... Some reading I've done on check-cashing and payday loans: https://www.businessinsider.com/check-cashing-stores-good-deal-upenn-professor-2017-2 https://www.businessinsider.com/check-cashing-stores-good-de... (I was able to read this using reader mode in safari) https://www.theatlantic.com/magazine/archive/2016/05/payday-lending/476403/ https://www.theatlantic.com/magazine/archive/2016/05/payday-... full list here: https://pinboard.in/search/u:dwight?query=payday https://pinboard.in/search/u:dwight?query=payday
      - elliekelly 8y ago
        Right in the first article you've linked is exactly what I've told you three times, underprivileged people can't afford banks: > "People told me they were saving money by going to the check casher instead of the bank," Servon told Business Insider.
dwighttk 8y ago
While true, there are people who chose to not use banks. Also, there are banks without all that. Maybe it’s impossible to get now (because I started with ING) but my checking and savings with Capital One have no minimums, no direct deposit required, & no transaction requirements. They both actually pay interest (not much on the checking). (As far as overdrafts go they offer what amounts to a low max credit card to back the account where the interest rate is the only penalty, i.e. no fees) On the other hand, I’m sure that last one isn’t great with bad credit, and perhaps the accounts were only available to me because my credit.
- elliekelly 8y ago
  > On the other hand, I’m sure that last one isn’t great with bad credit, and perhaps the accounts were only available to me because my credit. Not only would an underprivileged person never have access to an overdraft line of credit as you do, they very likely wouldn't even be permitted to open the account. Most people don't know that you actually have to be approved for a bank account. Most banks won't permit you to open an account until they've run what's called a "Bank History Report" on you. It's similar to a credit report but focused on your banking habits. For most people it's just a formality, for underprivileged people, it's serves as a complete bar to their ability to access our financial services system.