Class warfare? How the Poor are denied access to basic BANKING

[FirstLight]

So, you are on a fixed income and have issues when the bank charges an overdraft and the rest of your bills go into domino effect and the bank charges you fro every failed attempt? Yep, been there. one dollar off can cost you $300 or more...

There is no waiving of fees, no alternative routes, no options for those without the golden ticket of CREDIT

I cannot even qualify for a bank acct, unless I walk into the bank with a few hundred dollars to 'secure' an account.
(usually, I play it so close to the edge, I can't even keep money IN the bank anyway)

Cash payment of bills is hard, no online payment options - I go to the Post Office and buy money orders and drop them off by hand.

Right now, I have folks who have donated to help me pay a big bad bill, and I cannot access it.
See, PayPal requires you to either HAVE a bank account, or qualify for their CREDIT line.
Meaning, I cannot 'verify' my account...there is money for my bill sitting there, but I cannot even access it.

It's one thing for everyone to talk about the war on the poor...but the reality of the trenches is this: we aren't even allowed to play in the game of life with the rest of people. No wonder we have to find alternative means.

[LiberalEsto]

1. That's pretty awful

I know about this stuff because my brother can't afford a bank account either.

I don't know whether credit unions might be less restrictive. Have you looked into them? I belong to a credit union in Maryland where the only membership requirement is to live, go to school or work in our county.

[Kookaburra]

2. This sucks!

Will PayPal not even send you a certified check for the money that is yours?

I'm sorry this is happening. It's not fair, and you're so right. Nobody knows what it's like being without until they've had to go without.

Holding light for you FL (it's all I have, but you're welcome to it).

[Ruby the Liberal]

3. Its only getting worse

One bank in my town announced they were going to start charging 3% for debit card purchases (like grocery and gasoline). Ouch.

Please look into a Credit Union. They don't do this.

[Egalitarian Thug]

4. And not coincidentally at all, The USPS used to offer just this kind of service.

That is until Congress stopped that, too.
& R

[OceanEcosystem]

5. The overdrafting penalties should be much smaller.

But I think banks do and/or should still have a right to charge such penalties. I'd rather that they be along the lines of just a few dollars per overdraft, though.

[Ruby the Liberal]

17. Many banks have sweep arrangements

Where they will "sweep" money from an overdraft line of credit (at like 24% interest) or another account, like a savings account. This stops that cascade because rather than ~$30 an incident it totals up the need and charges ~$10 a day for the sum total of funds.

Problem is that you have to have money in the other account, or you are paying usury rates in interest for an unsecured line of credit.

BUT - that is an option for those who can take advantage of it. Not all can.

[starroute]

57. Banks go out of their way to charge you the maximum penalty

Suppose you have $200 in your account and have a number of checks or debit card purchases coming in on the same day. They will start deducting them from your account beginning with the largest ones. So if you have one payment of $205 and eight more that collectively add up to $100, they will begin with the one big one and then show the other eight as overdrafts -- charging you $30 a piece.

[FirstLight]

65. +1000

exactly...they can play those numbers any way that benefits THEM, dontcha know?

[OneGrassRoot]

6. I have info...be back in a minute to type it out...

it's good for us all to know for future reference.

[OneGrassRoot]

28. HERE IS THE RESOLUTION:

It turns out that when an account is not verified, sending money as a DONATION (and generating a button with a code for a DONATE button) versus the SEND MONEY option is potentially problematic.

That's what happened with FirstLight's situation.

So, here is how to resolve this for those who have donated and the funds are unclaimed because the recipient isn't verified (which sucks, I completely agree):


1. Log into PayPal and find the donation, and it will be listed as "unclaimed."


2. Cancel that transaction. Here’s how to cancel an unclaimed payment:

Click History near the top of the page.
Click Cancel under ‘Order status/Actions’ next to your unclaimed transaction.
Click Cancel Payment.

Remember that you can cancel only unclaimed payments. (Hopefully that will work and you won't have to call them, but if you do call, then can cancel it manually since it's unclaimed.)


3. When that transaction has been canceled, you can then click "SEND MONEY" in PayPal menu while logged in >> enter email of recipient, w/amount >> select PERSONAL, then "OTHER."

Doing that allows the recipient who does NOT have a verified bank account to receive the funds.

I just walked through those steps and it worked, and FL verified it worked on her end.

[Dont_Bogart_the_Pretzel]

63. Indeed...good for us all to know for future reference

Thanks!

[FirstLight]

7. no local credit unions

I am in a very rural area...and the closest cred union is in nevada, and i am a CA resident.

besides, even if a credit union was an option, could i afford to open an account right now to have access to the bill pay money online? NO

[whistler162]

23. When I joined the credit union I joined, many moons ago....

the initial deposit was $25 which goes into your savings account until you close the account.

http://culookup.com/
http://www.asmarterchoice.org/

either link might give you a idea if there was one closer than Nevada and whether you qualify to join, some have specific membership rules.

[LiberalEsto]

46. My credit union charges $5

Those are good links, btw
That's how found the cu I use

[mwooldri]

38. some credit unions have "ties to XXX" rules to join.

Example, Pentagon Federal Credit Union requires you to have ties to the military, through yourself, through family, or through membership to a military non-profit support organization. It of course means that there would be banking online and by phone but this would get a bank account set up (even if it is just a savings account), and Paypal can verify that and you can arrange for deposits into there. Once there, the credit union can mail you a check, which you can cash locally.

[jeff47]

39. Mine requires a $5 balance to open and maintain an account.

And that gets all the usual services - debit card w/ CC logo (so it works like a Visa), online bill pay, online banking, and so on.

Even though the closest is in NV, you might wanna look into it or one a little further away in CA.

[Enrique]

8. this is a good argument for Postal Banking

of course the banks are against this, and it won't happen until we put non-bank-owned politicians in office.

http://www.alternet.org/economy/timely-idea-save-post-office-bring-back-postal-banking-services

August 14, 2012 |

On July 27, 2012, the National Association of Letter Carriers adopted a resolution at their National Convention in Minneapolis to investigate establishing a postal banking system. The resolution noted that expanding postal services and developing new sources of revenue are important to the effort to save the public Post Office and preserve living-wage jobs; that many countries have a successful history of postal banking, including the U.S. itself; and that postal banks could serve the 9 million people who don’t have bank accounts and the 21 million who use usurious check cashers.

The USPS has been self-funded throughout its history, but it has been recently driven to insolvency because in 2006, Congress required it to prefund postal retiree health benefits for 75 years into the future, an onerous burden no other public or private company is required to carry. The USPS has evidently been targeted by a plutocratic Congress bent on destroying the most powerful unions and privatizing all public services, including education. Britain’s 150-year-old postal service is also on the privatization chopping block, and its postal workers have also vowed to fight. Adding banking services is an internationally proven way to maintain post office profitability.

Serving an Underserved Market, Without Going Broke

Many countries operate postal savings systems, providing people without access to banks a safe, convenient way to save. Great Britain first offered this arrangement in 1861. It was wildly popular, attracting over 600,000 accounts and £8.2 million in deposits in its first five years. By 1927, there were twelve million accounts—one in four Britons—with £283 million on deposit.

(...)

[quinnox]

9. things to consider

A credit union will usually let anyone open up an account, and often the only requirement is you live in the area. There are usually no fees or minimum balances.

I have an account online with Bank of America, I have literally no money in the account. Like we are talking less than a dollar. I opened it just to have it a while back and never use the account. I'm not charged a penny for it. I have an ATM Visa debit card and could get checks if I wanted to. All that is required is you open the account online, its called the "ebanking checking account". As long as you agree to paperless statements and do withdrawals and deposits through their ATMs, then there are no monthly fees or minimum balances.

[Ruby the Liberal]

14. If you need a person, it is $8.95, IIRC

Overheard that in a BOA branch one day. Guy went in to deposit his half of the rent into his roommate's checking account, and they told him it would be $8.95 unless he uses her ATM (which he didn't have, nor should he).

[quinnox]

20. that's correct, if you have to go in and use a teller, then you have to pay

So for me, it is not a problem as I only use it as a truly online only account. Bank of America has tons of ATMs all over the place so it is easy for me to use them. So if someone for some reason needed to see a teller on a regular basis, this account would not work for them because of that fee.

[longship]

10. Imagine SocSec, then.

They are/have phased out checks. Direct deposit only! So one either has to have a bank account, or one has to get one of those debit cards with monthly fees.

I try to keep my balance high enough that I don't have to worry about overdrawing. That means I have to do without things which many would call essential. Last month the fan motor on my furnace went out. I ended up fixing it myself -- mangled knuckle time -- so it only cost me $100. But if I hadn't kept some reserve in my account I would have been screwed. A furnace is not optional during Michigan winter.

I can't imagine how the no check policy is affecting people. It's probably not good.

[dlwickham]

42. my bank waives all fees if you have direct deposit

maybe someone needs to look around at the different options out there

I don't have to have any minimum balance

[richmwill]

78. Social Security has their own debit card now.

It's called Direct Express, and for me it's actually pretty convenient. No monthly fees, and only local ATM charges for withdrawals. If you ask for cash back with your purchases at the register, then you pay no fees at all. Money is always on the account and available like clockwork at 1am on the day of your deposit. No overdraft fees either, because the card will reject any transactions that would bring it over.

[longship]

79. Well, I was lucky to get a local banker which has good policies.

But for those who are in a tough situation, your information will prove valuable.

[L0oniX]

11. It's all moving to paperless online banking where you pay all your paperless bills.

This is one big reason that free internet access should be the law. Oh yea they say ...go to the library but that is not secure ...and you must have a provider email to do online banking. You can't use gmail, hotmail or any freebee email service. As it is the bandwidth sucks in the USA while they choke off their OC1 cross country connections.

[BadgerKid]

54. Still, some places charge a convenience fee for online payments.

A previous landlord of mine did that. The utility company did that; I thought "FU" and sent payment via snail mail to save $1.

[L0oniX]

55. Actually ...the move is on to charge you more if you want a paper bill via snail mail. n/t

[madamesilverspurs]

12. Those payday lenders and rent-to-own stores ---

Back in the 1990s those enterprises were owned by the same banks that shut their doors to the poor. Those same banks redlined whole neighborhoods, thus creating "customers" for the payday lenders and rent-to-owns that popped up in or near to those neighborhoods. The rent-to-owns were largely unregulated, and customers often found themselves paying upwards of 3x retail and God help them if they missed a payment. A number of studies examined these practices of what came to be known as the "poverty industry". Pawn brokers came out the cleanest.

The one thing the poor can be assured of -- someone's greed is behind every denial of services.


-

[FirstLight]

13. WHY

see this is the thing, it is like a "Pay to PLay" situation just for basic LIFE.

Why do I HAVE to have a bank acct to qualify as a real person?

My grandmother used to keep her money in the flour in the refrigerator...

but I guess they can't keep tabs on us without all those scan codes and credit receipts.

[southernyankeebelle]

15. Well if all fails cash your paycheck at WalMart for $3.00. I would also get money orders

there. I always always attach my check with the statement they want back with a stapler. That way they must take it apart. I have had times they lost the check. So we let them pull it apart. Also make sure you write your account number of the check in the memo area. I use to work in accounts payable in my younger days. Please make sure you write the correct number. You be surprised if you get it wrong.

[FirstLight]

19. no paycheck to cash...

...

[southernyankeebelle]

33. yep

[tammywammy]

16. Overdraft has changed to an opt-in program

That was part of financial reform.

[auto1969]

18. Get a FREE AccountNow card

Had this same problem. You can order a free accoutnow visa card at accountnow.com. It has its own routing number and account number and can be used for direct deposit and paypal. It can be verified through paypal as well. There might be some quicker options at Wal-mart. Similar visa cards offered that work as a bank account. I hope this helps and you can get access to your money.

[OneGrassRoot]

21. Thanks for this. n/t

[OneMoreDemocrat]

22. Sorry, this is bullshit...

you don't have to 'secure' a bank account with a few hundred dollars.

There are online payment options (or even phone payment options) for EVERYTHING, including your internet provider (which you seem to have no trouble paying so that you can complain about how awful this country is).

These posts of woe make me wonder how honest the posters are about their situations, it's to the point now that the right's meme that the left hates America has a ring of truth...apparently complaining about how 'The Man' is keeping you down is easier than actually doing anything about your 'plight' (real or imagined).

[FirstLight]

24. maybe you have no idea what you speak of

and maybe you can keep this hostility to yourself.

[duffyduff]

26. I am probably more destitute than you are

and I have a checking account. I set one up after living years like you did because of getting small pension I wanted to have direct deposited. I had to take it nine years early after my UI ran out.

I think you can get one if you do enough research.

[arikara]

29. There's at least one in every crowd

and not worth the bother to engage them.

Good luck to you, something will work soon.

[OceanEcosystem]

30. Yeah, I wasn't sure where the OP got that from.

I think many bank accounts can be opened with significantly less than a few hundred dollars.

[Enrique]

47. maybe you don't

maybe your credit record is better than the OP's.

[awoke_in_2003]

50. Your republican is showing. nt

[Viva_La_Revolution]

75. you are wrong

I am dealing with the same situation. You have to have money to deposit, or have a check direct deposited every month.
And how do you know the poster is posting from home on an account they pay for? and how do you know he didn't pay by money order LIKE HE SAID IN HIS POST.

Your post makes me wonder why you are here, with that kind of attitude.

[RB TexLa]

25. You are only charged an overdraft fee if you overdraft your account. That has nothing to do with

being poor. It's not a hard thing to count how much money you have in the bank and not spend more than you have in the account.

[FirstLight]

27. how to explain

it doesn't take much to screw up, even 50 cents can take you down when you are that close to being broke anyway...add to that the fact that the banks actually process the withdrawals before deposits in the case of BofA

[RB TexLa]

32. No, it is easy to not screw up, it's simple addition and subtraction. Cash withdrawals may be

processed before deposits but not other charges.

Why are you saying poor people are too stupid to add and subtract.

[Posteritatis]

37. Except for the banks which process transactions out of order to gain overdraft fines

Several of the major banks will do that - sit on a deposit for a couple of days so "I've deposited enough money to cover next week's expenses" turns into "I've gotten five overdraft charges which consumed my entire paycheck." Citizens Bank and TD both got in trouble (read: slap on the wrist fines) over that a few months ago, and I had a few friends spend a month or two flat broke because Bank of America liked doing the same to them.

It's easy to keep track of how much money you have, but that doesn't mean much if you're living marginally and the bank is engineering a situation where you can't not overdraft.

[jeff47]

41. That was changed in one of the recent reform bills

Banks have to do deposits before withdrawals now.

They can still put a "hold" on checks you deposit into your account, but if both a deposit and a withdrawal are supposed to clear the same day, they have to do the deposit first now.

[Posteritatis]

48. That's fantastic and way overdue. (nt)

[FirstLight]

44. exactly!

thank you for explaining it better...

[WillyT]

31. K & R !!!

[grasswire]

34. there is a relatively new alternative

It's called netspend. It is just like having a bank account without brick and mortar bank. It's a pre-paid debit card with many banking functions. You can load $ at many locations such as 7-11. You can have paycheck or govt check direct deposited. You can transfer money from paypal into netspend -- no hassle there.

And none of the usual hurdles are required. No bank acct needed. No "verification" but you do have to provide your SSN because netspend is covered by fed regulations.

There are small fees for some transactions, and a small monthly fee.

Check out the web site. Two of my family members have been using it for business purposes for nearly a year, with no complaints. I registered and have a card but haven't activated it.

Oh, and one of my family members used the netspend card # to verify his identity on paypal where it asks for banking info. That's a great workaround! It could solve your problem.

The netspend card arrives about a week after you request it.

[OneGrassRoot]

35. Another DUer with a Wishlist post uses that...

and I'm waiting to hear back regarding how people can send money to a netspend account.

Seems there are several alternatives like this now, which is great.

Thanks.

[we can do it]

36. Could you find a credit union?

[FirstLight]

40. You know what...I'm not even all that desirous to PLAY the Money Game anyway

I think maybe since I left banking in 2011, at least I know how much money I HAVE, because it is in my HAND

Maybe it's okay that they can't track my every move and purchase, my starbucks habits etc...

For all the inconvenience, it is probably better for me to be off the collective radar anyway to some extent. And when the SHTF I will not be in the mad rush on the bank for cash...

Really, the bitching her is more about the fact that the system is rigged. And there are many who are not even considered part of society because they don't have the link to the money system. Maybe it is actually a bullet they/we/I have dodged, because I don't have that 'mark' on my forehead so to speak.

While it is really bad that this reality exists, maybe my reason for posting is more about pointing that out than anything.

[bobclark86]

43. At age 18, I went to the (small town, not big chain) bank...

and got a checking account without any fees. This was about 10 years ago. They still have that. Don't go to a big bank (if you need cash, go to your bank's ATM or hit Walmart and buy a 35-cent pack of chewing gum and get $20 to $100 out). Credit unions are also options. The few places that do have fees often waive them for direct deposit (work, SS, whatever).

Also, you can legally tell your bank to just cancel payments if there are no funds, rather than to overdraft. I haven't paid an overdraft fee since college because of this. I also don't auto bill for anything.

BTW, what places don't have online billing these days? My city of 15,000 people in Podunk, Nowhere even has online billing for water and sewer service.

[hunter]

45. I think the Post Office should be allowed to open a no fee full reserve banking system...

... in direct competition with check cashing places, commercial banks, and other businesses.

The post office could issue their own ATM cards, with ATMs in every neighborhood, accepting direct deposits from any source.

All businesses that accept commercial debit or credit cards would be required to accept Post Office debit cards as well.

Pensioners and welfare recipients wouldn't lose any of their scarce money to commercial banks and check cashing services.

[WillyT]

49. Have You Seen THIS:

Link: http://www.democraticunderground.com/10022390328

[MsFlorida]

52. agree with the banking, did find if you are a veteran chase opens accounts for free

and have second chance banking.

no minimum balance and a number of other free services.

sometimes I only have 6 cents in my account and they still treat me like I have over $100,000

I usually cannot speak well of banks, possible could just be my branch.

Good luck to you, I know just how this feels

[MADem]

59. There are also damn few banks in poorer neighborhoods.

Same deal with grocery stores.

[notadmblnd]

61. have you ever thought of a pre paid visa card?

you can get them almost anywhere.

[hollysmom]

62. maybe this will help - it is not free and

I know when you are living on a budget that every dollar hurts. But if you just need to set up an account for a short while...
http://www.findabetterbank.com/second_chance_checking.html

I have a friend who has to be very careful with her checking account, she lives from day to day and when the money is gone, they don't eat or travel by car. But she never writes a bad check, she is very careful with her checking account after she lost all her credit cards for non-payment.

[FirstLight]

64. pre paid visas don't work...

Paypal requires a STREET address (which, firstly is not cool considering I live in a RURAL area) and wants a CREDIT CARD to VERIFY the address...so I can't even get them to MAIL ME A FUCKING CHECK!

nope, the game is rigged

[Sen. Walter Sobchak]

66. If you dead-stop can't open a bank account,

it is because you're blacklisted by ChexSystems.

[FirstLight]

67. Equifax, actually

Probably all the same anyway... bastards.

[Sen. Walter Sobchak]

68. I don't think Equifax does check verification

If you rack up a history of returned checks or suspicious check activity or have an account closed with a negative balance... on the list you go.

[FirstLight]

69. well, two ex-husbands jacked THAT reputation...

seven years to get your credit clear? ya right...

...and the Wells Fargo guy yesterday said it was Equifax...

[Sen. Walter Sobchak]

71. ChexSystems isn't a credit report in a conventional sense,

It is just a list of people a bank would be well served not extending checking privileges to.

[FirstLight]

73. that's fine

but I had an abusive ex who used to pull the money out of the ATM for his own (pornographic & drug) use after I'd gone to the store and written a check... see how that works?

[FirstLight]

70. ** Seriously though, do you see this as a cultural/class issue?

This is NOT a fluke occasion, it has been my reality for the past 20 years of my life.

I KNOW it isn't just me... I wish I had the wherewithall right now to do the research, but I betcha that most people on welfare or some form of limited income have these issues chronically...

[killbotfactory]

72. Been there, done that, got the lifetime of bad credit trophy.

I have a bottomless well of hatred for banks.

[FirstLight]

74. yep

i think the WHOLE SYSTEM is Jacked personally, so yeah...I don't usually prefer to play, unless I need to do something important **like access funds** and then I remember why I hate this shit to begin with!!!

[Socal31]

76. In some places you go to jail for writing bad checks.

Just because it is electronic does not mean it is not the same thing.

And I am on no pedestal here, I used to over-draft all the time.

Once you are in the chexsystem, (A report that banks share with each other about risky clients), it is harder to get out of than something on your credit report.

There are resources online for finding banks that do not use this system.

I eventually ended up using a Wells Fargo Second Chance account....they only let you deposit in-store, put holds on your checks (so direct deposit is best), and limit your purchases. However, after 3 months of no issues, they converted it to a regular account.


Also, there have been laws passed that limit the amount of OD fees they can charge in one day. I was actually part of the class-action against BofA and got a sweet check for a whole $70 or so 2 months ago.

But yea, there is a large population of under-banked Americans. Some seek out the Greendot or other cards from Walmart (NOT gift cards) that can have pay-checks directly deposited, but always read the fine print.

[JVS]

77. The minimum balance IS the alternative to credit.

It's their deposit that they make people who have a history of writing bad checks pay so that can have some confidence that the bad check writing won't start again. And all that talk of fixed income and domino effect is exactly why they do it, because they know that when push comes to shove and the bills need to be paid all of those circumstances make it more likely that a customer will write a bad check.