I agree that banks are predatory, but the fact that people can't keep ~$500 in their bank account indicates they are spending more than they are earning. When someone can't keep an extremely small amount of cash on hand at all times. it doesn't mean they are living paycheck to paycheck and just netting zero - it means they are accruing debt every cycle, and then struggling to stay cash flow positive in any way necessary.
So, if you ask me, the solution to America's woes in this regard is not to eliminate overdraft fees. That's just addressing a symptom. The real solution is a living wage for all Americans, or some other way to prevent poor people from sinking into debt little by little. Then banks wouldn't construct their systems like this, because it just wouldn't work.
Instead of patching bandaids onto the financial system, we need to lift people up from poverty directly. Want to solve overdrafts? Tax the rich and give the money to the poor.
As for BankSimple, that's nice marketing and all, but let's see if BankSimple becomes the bank of the poor. Can anyone get a free bank account with BankSimple and keep $0-$500 in it?
I would like to disagree regarding the fact that over-draft fees are the realm of the poor. I've had the misfortune of being charged overdraft fees twice and both times were because I accidentally swiped my debit card and then realized I'd overspent. Both times, I wasn't spending more than I had. I had a substantial amount of cash in a separate saving account as well as my investment account. It was just my checking account that was low of cash.
As for BankSimple becoming the bank of the poor, I feel that it wouldn't be that big an issue. They site focuses on integrating technology for pretty much everything you need to do. Check depositing is by smartphone. There are no branches - everything is online/phone based. This will probably deter the poor to sign-up since people who have < $500 balance on their bank account probably aren't going about with a smartphone and a data plan.
What the heck bank is this? I bank with the reviled BofA, and once a year or so I misjuggle my accounts and bounce something, and every time they courtesy credit the fee, which is their official policy.
Usually when this overdraft sob story is posted to a forum with a call for revolution,
it is by someone who is a habitual line skater who is miffed they keep geting caught out.
I would rather depend on the market to correct the problem for people like you. There are many banks that will draft your Savings account if you overdraft your Checking account. Choose a new bank, and keep the government out of it.
It only becomes a regulatory issue because it is catastrophic for poor people. But once again, it's just a bandaid regulation if you make the practice illegal, because poor people will remain poor.
>When someone can't keep an extremely small amount of cash on hand at all times. //
Your "extremely small amount of cash" is my families disposable income for the entire month. That is, all we have to live on after tax and direct housing costs.
A simple accident/incident (last year a small section of our roof caved in, the insurance company says it wasn't covered as there wasn't a 'storm') can wipe that amount out easily. It took us several months to afford the repair.
Of course if we'd be living off the state it would have been fixed immediately assisted by our tax payments ...
Crazy things like overdraft fees don't exist at all where I live (The Netherlands), you simply pay interest on the amount that you get below 0. So I doubt it is a symptom of anything. It's just another way in which the USA's predatory capitalism works.
If you wonder where those downvotes are coming from, it's the hordes of HN-libertarians who smelled a quasi-sort-of-but-not-really-socialist sentiment in your post from the front page and were instinctively, even mindlessly, drawn here.
Heaven forfend we have a single post anywhere that doesn't jive with the bootstraps, fuck-you-got-mine, randroid hivemind mentality.
So, if you ask me, the solution to America's woes in this regard is not to eliminate overdraft fees. That's just addressing a symptom. The real solution is a living wage for all Americans, or some other way to prevent poor people from sinking into debt little by little. Then banks wouldn't construct their systems like this, because it just wouldn't work.
Instead of patching bandaids onto the financial system, we need to lift people up from poverty directly. Want to solve overdrafts? Tax the rich and give the money to the poor.
As for BankSimple, that's nice marketing and all, but let's see if BankSimple becomes the bank of the poor. Can anyone get a free bank account with BankSimple and keep $0-$500 in it?