LA Times: Plight of the unbanked - odd article

[cashnocredit]

http://www.latimes.com/business/la-fi-emerge-finx-20180621-story.html

 

This is an interesting discussion of the unbanked, and underbanked. They define unbanked as having no bank accounts and underbanked as having a checking account but using alternative financial products like payday loans or Calif. installment loans which have a $2500 minimum to get around usury laws.

 

The reporters went on a two hour search to cash small checks, get a debit card, money order, and look into getting a $500 loan then report on their experiences.

 

I think it's a little off in that people that you have to have a job and bank account to get a payday or installment loan which leaves out the unbanked. Peeps in this category are used to fees for cashing checks and pretty much live off the cash perhaps getting money orders when required. But it does provide some insight into the difficulties one has being unbanked.

[Cactus Flower]

A very interesting article about a part of society I hope to never have to be a part of :-( sad

[cashnocredit]

A very interesting article about a part of society I hope to never have to be a part of :-( sad

I'm curious as to what percentage of the unbanked just don't know how to use a checking account or are scared of banks (there are some) and what fraction are unbanked because they wound up having their accounts closed from being overdrawn. The downward spiral of those caught up in paydays loans may result in peeps going from underbanked to unbanked. Bad lending and banking credit pretty much forces one into the unbanked category. Not an easily solved problem but living on cash is probably better than running payday loans month after month. Maybe the unbanked, which aren't eligible for payday or other loans requiring a bank account, are better off paying a few percent to cash checks than are the underbanked.

[Cactus Flower]

Some employers are going to debit card options (for Payroll).

 

My son had a bank account when he was in high school - 11th/12th grade...

when he got out it transitioned to a checking with a check card/debit card so he understood/understands how all of that works.

But you make a valid point. There are a lot people who do not parent properly, or at all, by teaching their kids, how to navigate "life" and that includes how to manage a bank account/finances/loans etc.

A lot of my son's friends live in a cash & carry world and even my own son does to some degree.

Then there are people who have trashed their credit, and can't get a bank account at all.

[Konrad2012]

LA Times. Nuff said

[minnesotakent]

I know a man who is about 60 years old who has a job that requires a specific skill that he is very good at. He's considered a genius at that particular skill, but otherwise not very bright at all. His boss pays the man's rent and all of his bills. At the end of each work day his boss will ask what he needs and usually ends up giving him anywhere from $20 to $60 to take with him that day. His boss puts any unused wages in a retirement account that this guy has no interest in at all. His boss also helps him with his taxes every year. It's a very unique relationship, but they've been doing it this way for over 25 years.

[PotO]

Ok, somebody should ask this question ...

 

Who really gives a rat's ar$e?

 

There will always be illegal aliens, nutjobs, street beggars, homeless or people with a track record that formal banking doesn't appreciate. Life's a beach.

[mendelssohn]

There are reasons that people cant get bank accounts or credit cards, or that they use payday loans. They are a bad credit risk. Of course if there are products designed to take those risks into consideration they are considered predatory. If there are no products, it is due to discrimination of some sort. There is no winning scenario.

[cashnocredit]

There are reasons that people cant get bank accounts or credit cards, or that they use payday loans. They are a bad credit risk.....

And that's where the article fails. They should have gone into why people (who have checking accounts) get payday loans and what happens next. There are some people that have an emergency, take out payday loans and pay them back and it's just a one time thing. There are others that don't and wind up paying 2 times the original debt and defaulting. Stats indicate payday loan businesses are not very profitable so high levels of interest from those that do repay comps for those that default. Not that much actually turns into profits. I suspect a large part of the people that default on payday loans wind up screwing their banks too so they join the unbanked.

 

Still, it would be interesting to know how many unbanked are unbanked because they have negatives in the banking specific CRAs. Can't really ask a bank to give you a checking account if you have a history of screwing up checking accounts. But is it 30%?, 50%?, 75%? It would be a more useful piece if they surveyed a few to find out why they are unbanked. Might actually help some readers.

[insolent1]

Some subsets of world societies do not trust banks and some do not understand or refuse to embrace the basics of modern American consumer economics. Some abuse products offered to them and have bad scoring. Some refuse to adapt to modernity [look at how many people still use checks at the grocery store] and others see consumerism as evil.

States issue ID cards without regard to immigration status and basic banking products have been made simple for the most elementary needs. Short of a government employee coming to the residence of the "unserved", what is the basic function of government in these issues? Why can't NGO advocacy groups assist them? Where are the social welfare advocates? Why isn't the LA Times aiding them with an education campaign?

The government cannot solve every issue in the world.

[wwanderer]

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

 

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

 

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

Edited June 25, 2018 by wwanderer

[TheVig]

I know someone from Harlan, KY. Dirt poor population. He broke the cycle by buying a one way Greyhound ticket. He makes close to $100k a year. He goes back to visit family from time to time. His family gives him a hard time for leaving. They are simply jealous.

 

Taking the leap to change who you are surrounded by is sometimes key to breaking bad cycles.

[Rogue]

LA Times. Nuff said

It's the #1 paper for bird cages in SoCal.....

[cv91915]

...overdraft fees, effectively a penalty for being short on cash...

 

[PotO]

Some subsets of world societies do not trust banks and some do not understand or refuse to embrace the basics of modern American consumer economics. Some abuse products offered to them and have bad scoring. Some refuse to adapt to modernity [look at how many people still use checks at the grocery store] and others see consumerism as evil.

 

States issue ID cards without regard to immigration status and basic banking products have been made simple for the most elementary needs. Short of a government employee coming to the residence of the "unserved", what is the basic function of government in these issues? Why can't NGO advocacy groups assist them? Where are the social welfare advocates? Why isn't the LA Times aiding them with an education campaign?

 

The government cannot solve every issue in the world.

 

Even with a state ID, if you have no SSN what bank will open an account for you? Any account. Not many at all.

...overdraft fees, effectively a penalty for being short on cash...

 

 

Another way to look at it ...

 

A tax for not living within your means.

[cv91915]

 

...overdraft fees, effectively a penalty for being short on cash...

 

 

Another way to look at it ...

 

A tax for not living within your means.

 

 

"Hmm, let's see. I can not pay this bill and incur a late fee. Or I can write a check, have it bounce, incur an overdraft fee, have the payment reversed by the payee AND pay a late fee.

 

Yes, the second option sounds perfect!"

[Konrad2012]

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

https://www.usa.gov/join-military

 

https://www.navyfederal.org

 

https://www.benefits.va.gov/gibill/post911_gibill.asp

 

^^^There's a step by step blueprint to a job, banking services and money for education or job training.

[wwanderer]

When people are poor, often the choices are crappy or crappy.

 

Short on rent - dont pay rent > get evicted.

 

Or

 

Write a check for rent, hoping to get the money before the check bounces.

 

Ask people for money. Ask for paycheck advance. Ask baby daddy for that back child support. Ask cousin Bob for that money he borrowed 2 years ago and never paid back. Try for a payday loan. Etc

 

Too late, check already bounced. Now landlord is charging a bounced check fee + late fees. Bank charging NSF fee. Now that payday loan isnt enough.

 

And the cycle continues. Yall think its so simple to just do better when youre poor. Ha

Edited June 26, 2018 by wwanderer

[PotO]

 

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

https://www.usa.gov/join-military

 

https://www.navyfederal.org

 

https://www.benefits.va.gov/gibill/post911_gibill.asp

 

^^^There's a step by step blueprint to a job, banking services and money for education or job training.

 

 

 

You forgot the first step: https://helpforfelons.org/felony-expungement-sealing/

[wwanderer]

 

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

https://www.usa.gov/join-military

 

https://www.navyfederal.org

 

https://www.benefits.va.gov/gibill/post911_gibill.asp

 

^^^There's a step by step blueprint to a job, banking services and money for education or job training.

When 40% of the population is poor, they cant all be saved by the military. Ya, it helps some people. It also greatly harms many people and leaves them injured, ill, PTSD or worse, homeless, or just dead. Not the greatest choice.

[PotO]

 

 

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

https://www.usa.gov/join-military

 

https://www.navyfederal.org

 

https://www.benefits.va.gov/gibill/post911_gibill.asp

 

^^^There's a step by step blueprint to a job, banking services and money for education or job training.

When 40% of the population is poor, they cant all be saved by the military. Ya, it helps some people. It also greatly harms many people and leaves them injured, ill, PTSD or worse, homeless, or just dead. Not the greatest choice.

 

 

Life's a beach.

[TheVig]

When people are poor, often the choices are crappy or crappy.

 

Short on rent - dont pay rent > get evicted.

 

Or

 

Write a check for rent, hoping to get the money before the check bounces.

 

Ask people for money. Ask for paycheck advance. Ask baby daddy for that back child support. Ask cousin Bob for that money he borrowed 2 years ago and never paid back. Try for a payday loan. Etc

 

Too late, check already bounced. Now landlord is charging a bounced check fee + late fees. Bank charging NSF fee. Now that payday loan isnt enough.

 

And the cycle continues. Yall think its so simple to just do better when youre poor. Ha

Cousin Bob would have never gotten any money from me to begin with.

[cv91915]

By the measures discussed in the article I am overbanked. What's being done to help me?

[cv91915]

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

 

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

 

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

 

https://creditboards.com/forums/index.php?showtopic=614782&p=5745798

[Guest rumaki]

 

People get payday loans because theyre poor and need money, usually for some pressing unexpected expense. When youre poor, there is no money for savings. No money for auto repairs, or any of the other million things that come up.

Ya ya ya, personal responsibility and all that. They could make better choices. That just happens to be really difficult when your wages are poverty level and the cost of living dictates that is simply not enough.

This is also how people become so-called unbanked. It is not easy to dig out of that cycle.

https://www.usa.gov/join-military

 

https://www.navyfederal.org

 

https://www.benefits.va.gov/gibill/post911_gibill.asp

 

^^^There's a step by step blueprint to a job, banking services and money for education or job training.

 

 

Peoplw love to trot out the military like its the answer. A great many people can't join any branch of service due to mefical conditions or otherwise4