8 ms·
Mark Cuban-backed banking app Dave to go public in $4 bln SPAC merger
- ClosedPistachio 5y ago> Launched in 2017, Dave is an app used to help Americans avoid billions of dollars in overdraft fees charged by traditional banks. Honestly my bank hasn't charged me an overdraft fee in years. Is that unusual? Is Dave more for unbanked or underbanked folks?
- arbuge 5y agoYou're probably not their target market.
- bliteben 5y agoLooks like the target market is to separate investors from their money.
- Guest42 5y agoEven an account with a few grand in it will lead to pressured calls from tellers to enroll in investment services, at least from one major us bank.
- RC_ITR 5y agoThe only comment needed in 99% of HN discussions
- mattferderer 5y agoIn my experience it has only happened when I had multiple transactions in the same day & the ones that dropped my account to low were recorded first. Usually if you have enough money in a different account with the bank you can just ask them what happened & most smaller banks will remove the fee.
- mc32 5y agoThere used to be an urban legend that banks would process transactions to produce deficits if possible in order to assess a penalty. I'm not sure if that was true or not though. balance 100 deposit 500 check 400 would be re-arranged to: balance 100 check 400 deposit 500 So they could hit you with overdraft fees.
- chrisbolt 5y agohttps://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-banks-are-reordering-your-transactions-and-charging-overdraft-fees/ https://www.forbes.com/sites/halahtouryalai/2013/06/11/yes-b... > JPMorgan Chase says its policy is laid out in its Deposit Agreement which is available without a login. Transactions orders can vary by state. (See page 7 of the link beneath "Overdrafts".) Citi says it recently launched a program that simplifies the overview of account policies and outlines the fact that check and ACH transactions are processed in the order of smallest to largest to help minimize overdraft fees. So not quite “to produce deficits if possible”, but certainly more convoluted than it should be, which is why the CFPB got involved.
- ceejayoz 5y agoIt wasn’t an urban legend. The CFPB banned it, but it was quite common. https://www.nytimes.com/2014/04/12/your-money/customers-can-lose-when-banks-shuffle-payments.html https://www.nytimes.com/2014/04/12/your-money/customers-can-... > The report scrutinized the practices of 44 of the largest banks based on deposits. It found that half still reorder transactions from the largest amount to the smallest amount — known as “high to low” posting — rather than processing them either from the smallest to largest amount, or in chronological order. High-to-low posting tends to result in fees being applied to several smaller amounts, rather than one fee applied to a single, larger amount. (from 2013)
- croutonwagon 5y agoI worked netsec for a small regional bank. They absolutely did this. Ive always been more of a credit union type of person. But working in that sector made me feel predatory and like a carpetbagger, event though I wasn’t directly interfacing with these people.. I left the banking sector after a couple years.
- toomuchtodo 5y agoJP Morgan Chase made $1.5 billion from overdraft fees last year. https://www.rollingstone.com/politics/politics-news/jamie-dimon-elizabeth-warren-overdraft-fees-1172610/ https://www.rollingstone.com/politics/politics-news/jamie-di...
- ac29 5y agoAccording to Elizabeth Warren. Their CEO disputed that. Neither party, nor this article appears to have cited any actual sources.
- toomuchtodo 5y agoIt’s confirmed by Bloomberg. https://www.bloomberg.com/news/articles/2021-06-01/dimon-took-heat-but-regional-banks-rely-most-on-overdraft-fees https://www.bloomberg.com/news/articles/2021-06-01/dimon-too... (1.2% of JPMC 2020 revenue, which was about $120B)
- umeshunni 5y agoThey probably made 1/1024th of that, but that was enough for Elizabeth Warren to claim it.
- jamescun 5y agoCoincidentally, Channel 4 in the UK broadcast a series called "The Bank of Dave" in 2012 where a resident of Burnley called David Fishwick tried to launch a bank of the same name. They subsequently couldn't get a banking license, and dropped the "Dave" name. https://en.wikipedia.org/wiki/Burnley_Savings_and_Loans https://en.wikipedia.org/wiki/Burnley_Savings_and_Loans
- smcl 5y agoI can't decide if that's funny or a shame. It is kinda funny the idea that someone would want to incorporate a bank featuring a name which, in the UK context, has come to by synonymous with a sort of average working class bloke. But it's kinda odd that the organization was refused a banking license then could (presumably?) only get one after that name was not involved. It isn't offensive in any way, I can't help feeling that if had a name associated with a higher class (Sebastian, Cuthbert, Peregrine, pick one) it would've been fine. The funny thing is that ultimately it was well-meaning and objectively for the public good - in that wikipedia article there is this quote: > After six months of trading, BSAL had returned a profit and passed it on to various charities, including local food banks and community centres Oh and for non-Brits the name "Dave" gained a bit of prominence starting in the early 00's, like the character "Dangerous Dave" referenced in the popular Da Ali G Show and a TV channel called simply "Dave" famous for re-running popular British programming from some other channels. It's not for no reason, I think the name "David" was quite popular until recently. To the extent that at my dad's work there were enough that they needed qualifier to disambiguate the different "Davey"s - Big Davey, Wee Davey, Young Davey, Auld Davey ... etc.
- vvilliamperez 5y agoI used it a bit back in college to avoid overdrafts. When living with no income and under 1k in the bank, it was pretty useful. It would predict automatic payments, and allow you to take out a small loan to cover the payment, avoiding about $35 in overdraft fees. And the best part was the payment back was 0% interest, only you couldn't use the service again until you paid Dave back. I'm sure they got their money's worth from banking data after I left it signed in for 5 years. Eventually I deleted my account and unlinked my bank.
- mimikatz 5y agoRushing to get ahead of a change that kills the business model? https://finance.yahoo.com/news/ally-bank-kills-overdraft-fees-a-huge-money-maker-for-banks-161940171.html https://finance.yahoo.com/news/ally-bank-kills-overdraft-fee... "Ally Bank kills hated overdraft fees — a huge money-maker for banks"
- xenihn 5y agoI wonder what its valuation will be if overdraft fees are completely gone before the deal closes.
- jlund-molfese 5y agoCapital One 360 used to provide overdraft lines of credit, which let you draw up to $1000 beyond your balance and then pay the balance and a minimal interest fee later as an alternative to overdraft fees. But they discontinued them for new accounts, I wonder why?
- toomuchtodo 5y agoPeople who overdraft have an average balance of $350 in their deposit account. My hunch is it was too much risk even with Capital One’s predictive risk models. Better to sell them on credit cards instead (where the rate builds the risk of default in).
- devoutsalsa 5y agoBack in they day, I’d overdraw my checking account by $980 with a $20 overdraft fee. Then I’d bring it up to $0 after a month and overdraw it again. It was cheaper than putting $980 on a credit card, not that I had that much in available credit. I was broke in the 00’s.
- CaveTech 5y agoIf you were bringing the balance back to 0, it would not be cheaper than using a credit card. What am I missing?
- publicola1990 5y agoHow is it pronounced? Da-ve? Is it a latin word?
- jlund-molfese 5y agoIt's just Day-vh[1], like the English first name [1] https://www.facebook.com/watch/?v=865289267582437 https://www.facebook.com/watch/?v=865289267582437
- woodruffw 5y agoNot intentionally, although it has an appropriate Latin meaning: "either give, or (else)".
- VoodooJuJu 5y agoApp names are getting out of hand these days.
- cmckn 5y agoMy thoughts exactly, is "Dave" really the best we can do here?
- CharlesW 5y agoThese days, and also 8 years ago (Amazon Alexa), and 26 years ago (Microsoft Bob), and 38 years ago (Apple Lisa)…
- nexuist 5y agoIn an alternate universe every app takes on a personality with their own name, and we treat installing apps like hiring people to be part of our personal life's team. Kind of a cool idea but you'd need to own the entire ecosystem for it to work. Then you could associate actions (looking up a contact) with people (Sam) and ask Sam through voice interface to do the action or something.
- cmckn 5y agoI've had my checking accounts set to deny charges when the balance is insufficient for years. I have played the odds with a floated check before, but it's really not that hard to avoid an overdraft. These days, I just buy everything on a credit card. I earn rewards, and there's no change of overdrafting.
- jrogan993 5y agoSurely "Draft Dodger" or something is a better name.
- endisneigh 5y agoI've never understood overdraft fees. Why can't your card just not work if you don't have money?
- ceejayoz 5y agoSimple (RIP) worked that way. It was lovely back when I was broke.
- nikanj 5y agoBecause then the bank would not make money on overdraft fees
- jackson1442 5y agoBanks have to offer exactly what you described as an option. I make sure to set it (they throw a bunch of scary text at you telling you that you might not be able to pay for things if you turn off "overdraft protection," which is what results in overdraft fees.
- fossuser 5y agoI'm not sure why anyone uses banks instead of just using Fidelity for everything. You get a brokerage, you can have your retirement accounts there, you get free checks, debit card with free ATM access, software that's best in class for finance (even if it's still mediocre compared to consumer software). You can configure automatic bill pay, automatic investments, free money wires to external banks to pay rents, no fees for anything really, no useless savings account or restrictions. Even the phone support is better than any other financial institution I've ever had to deal with. Zero fee total market index funds, no fees really for anything. I think the only reason people don't use them is because they don't know it's an option and they use whatever bank their parents used.
- s0rce 5y agoDo you get your direct deposit (assuming you have a normal job) to your Fidelity account? I've been considering moving everything to Fidelity.
- fossuser 5y agoYep - works fine and was easy to set up.
- travoc 5y agoSupplier diversity is an important part of financial risk management. Fidelity is good, but you don’t want to have all of your wealth tied up in a single institution.
- boromi 5y agoIs Fidelity better than TD Amertirade? I didn't realize this was an option.
- fossuser 5y agoI haven’t personally used both seriously, consensus when I searched around to consider switching was that Fidelity’s software/service was better so I stayed.
- imilk 5y agoThis side-hustle feature is pretty strange with very little info: https://dave.com/side-hustle/ https://dave.com/side-hustle/ There's just something off about finding employment though your bank. Makes me think of living and working in a company town. But I'm probably not the target market at all.