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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 tha
by 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 agoFor 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 agoYeah, that's a very high-interest loan.
- User23 5y agoI 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 agoAn 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.