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My SO used to work in a bank in the business loan securities back office. Believe me. Lots of people and businesses apply even if they themselves see no realist

My SO used to work in a bank in the business loan securities back office. Believe me. Lots of people and businesses apply even if they themselves see no realistic chance of receiving a loan. And in private non business customers there are even a significant amount that have less than nothing to their name, living of welfare and still don't see, why they should not receive a loan from the bank for the newest iPhone. Or a new car. Or TV because "football's coming home". Excuse my snarkiness, but the stories she told me from her apprenticeship in the bank, when she was customer facing were not painting a good picture of humans (Btw. well off or not). But that is probably the case in any consumer facing job.

jacquesm 5y ago
Excuse my snarkiness, but having actually worked for a bank and seeing the inside of the loan department from an IT perspective, the bulk of that translates into: banks will allow the people that are already wealthy to leverage to make them even more wealthy while working hard to keep those already down firmly in their place. Not to mention to take advantage of them by charging them exorbitant fees for the little bit of credit that is extended to them.
- sdoering 5y ago
  I am with you. Shitty entitled customers calling female tellers whores that need to be f**ed to loosen up a bit (happened more than once) do not absolve banks from their abysmal policies. Or the system that not only enables but sometimes regulates/necessitates these policies. I am not siding with banks in general here. I was just exemplifying one aspect to show how it is not always black and white.amd how there can be unreasonable customers. [Edit typos]
- User23 5y ago
  Since you have industry experience how would you have banks rectify this perceived injustice? I can’t conceive of an underwriting process worthy of the name that isn’t going to consider those borrowers with collateral more creditworthy than those without.
  - djbusby 5y ago
    For one, overdraft fees should only be charged once per calendar month, not for every overage. Also, the burden on the bank for an overdraft is near zero, so why is it $35 for the customer? Perhaps a fee of only $5 would be less regressive?
    - skybrian 5y ago
      Yeah, that's a very high-interest loan.
    - User23 5y ago
      I don’t know if it’s still the case, but it used to be at least some US banks would order pending transactions in descending order of amount to maximize overdraft fees. For example, if you had $100 in your account and had charges for $1, $1, $1, $1, and $100 then as a “courtesy”[1] the bank would clear the $100 and then charge $35 times 4 for the remaining transactions. Anyhow that’s really awful and needs to stop, but I don’t see eliminating overdraft fees making a real dent in the advantages wealthy borrowers have. How could underwriting be changed to identify truly creditworthy borrowers who don’t have any financial or real assets? We already know that simply lowering underwriting standards has problems. [1] Their words, not mine.
    - drra 5y ago
      An EU bank director told me once that their best customer is not the one that pays it's loans on time but the one that misses dates so they can charge high fees for.
mvc 5y ago
> why they should not receive a loan from the bank for the newest iPhone Excuse my snarkiness but as someone who's been poor and needed a phone, I'd have got a loan to buy a 2nd hand phone if anyone would've given me one. Trouble is, both the companies providing the phones, and those providing the loans seem to prefer that I get the brand new one.
- sdoering 5y ago
  I am not talking about reasonable needs here. I am talking about people who are Cleary feeling entitled to receive loans they know the can never repair and would not even be willing to try. I myself had to live on 345 Euros a month for quite some time. And even longer was living below what Germany considers the amount of monthly income that one would qualify to not be called poor ("Armutsgrenze"). I know the feeling and hear you. The only difference is that I could not even get a contract as no telco would find me creditworthy enough. Needed to do prepaid and see how I would get any old mobile.

jacquesm 5y ago

Excuse my snarkiness, but having actually worked for a bank and seeing the inside of the loan department from an IT perspective, the bulk of that translates into: banks will allow the people that are already wealthy to leverage to make them even more wealthy while working hard to keep those already down firmly in their place. Not to mention to take advantage of them by charging them exorbitant fees for the little bit of credit that is extended to them.

sdoering 5y ago
I am with you. Shitty entitled customers calling female tellers whores that need to be f**ed to loosen up a bit (happened more than once) do not absolve banks from their abysmal policies. Or the system that not only enables but sometimes regulates/necessitates these policies. I am not siding with banks in general here. I was just exemplifying one aspect to show how it is not always black and white.amd how there can be unreasonable customers. [Edit typos]
User23 5y ago
Since you have industry experience how would you have banks rectify this perceived injustice? I can’t conceive of an underwriting process worthy of the name that isn’t going to consider those borrowers with collateral more creditworthy than those without.
- djbusby 5y ago
  For one, overdraft fees should only be charged once per calendar month, not for every overage. Also, the burden on the bank for an overdraft is near zero, so why is it $35 for the customer? Perhaps a fee of only $5 would be less regressive?
  - skybrian 5y ago
    Yeah, that's a very high-interest loan.
  - User23 5y ago
    I don’t know if it’s still the case, but it used to be at least some US banks would order pending transactions in descending order of amount to maximize overdraft fees. For example, if you had $100 in your account and had charges for $1, $1, $1, $1, and $100 then as a “courtesy”[1] the bank would clear the $100 and then charge $35 times 4 for the remaining transactions. Anyhow that’s really awful and needs to stop, but I don’t see eliminating overdraft fees making a real dent in the advantages wealthy borrowers have. How could underwriting be changed to identify truly creditworthy borrowers who don’t have any financial or real assets? We already know that simply lowering underwriting standards has problems. [1] Their words, not mine.
  - drra 5y ago
    An EU bank director told me once that their best customer is not the one that pays it's loans on time but the one that misses dates so they can charge high fees for.

mvc 5y ago

> why they should not receive a loan from the bank for the newest iPhone Excuse my snarkiness but as someone who's been poor and needed a phone, I'd have got a loan to buy a 2nd hand phone if anyone would've given me one. Trouble is, both the companies providing the phones, and those providing the loans seem to prefer that I get the brand new one.

sdoering 5y ago
I am not talking about reasonable needs here. I am talking about people who are Cleary feeling entitled to receive loans they know the can never repair and would not even be willing to try. I myself had to live on 345 Euros a month for quite some time. And even longer was living below what Germany considers the amount of monthly income that one would qualify to not be called poor ("Armutsgrenze"). I know the feeling and hear you. The only difference is that I could not even get a contract as no telco would find me creditworthy enough. Needed to do prepaid and see how I would get any old mobile.