Economy
In reply to the discussion: Weekend Economists Ring in the Old, Wring Out the New: Dec. 30, 2011 to Jan. 2, 2012 [View all]Demeter
(85,373 posts)Meanwhile, the industry's aggregate net interest margin - the difference between banks' average yield on loans and investments and the average cost of funds - improved to 3.75% in the third quarter from 3.51% a year earlier...Banks would like to keep those numbers increasing and are focusing on signing up new customers that currently don't have deposit accounts. But first they must get past government identification requirements which are especially difficult in large immigrant communities that shy away from traditional bank accounts.
One way this is being addressed is by easing the identification requirements for new customers, including accepting alternate forms of ID and not requiring social security numbers. This became an issue for Bank of America in February 2007, when the bank was marketing accounts to immigrants in California, only requiring an Individual Taxpayer Identification Number - issued by the Internal Revenue Service issues to people who don't have social security numbers or aren't eligible to obtain them -- along with any form of identification issued by any government. It turned out that this set of customer identification requirements was acceptable to bank regulators, and it meets the requirements set out in the Federal Financial Institutions Examination Council's core examination procedures.
Seeing an opportunity, non-banks are also making major efforts to jump into the action, offering various services including pre-paid debit cards, credit cards, bill paying and, of course check-cashing services. Walmart (WMT_) for example, offers check-cashing with fees starting at $3.00 ($6.00 for checks over $1,000), money transfers starting at $4.75, bill paying starting at 88 cents, and money orders for 60 cents.
Of course, using these services without having a bank account can get pretty expensive. Cashing a year's worth of pay checks at Walmart would cost $72, or $144 for a customer who grosses over $24,000 a year. And for a customer paying a bill at the last minute, the fee is $3.95 for Walmart Money Center's Express Payments service.