Banks and Credit Unions Dirty little secret; Small Banks could of prevented the recent lending practice; Big banks need to be prohibited from buying small banks so easily.
Banks have historically not loved the poor, but they never actively abused them. Recent events in the home mortgage industry show us all too clearly how big banks and their agents simply care less about people as individuals and humans.
A few years ago I spoke with a fellow who is a top VP with a bank in Oklahoma and in that state they allow small individual banks and in fact they flourish. He told me that banking was incredibly lucrative and there were so many ways to make money at it. Even from the standpoint of a small neighborhood bank. So why are they gone and disappeared from our cities. At one time these types of banks and credit unions were the back bone of small neighborhoods, ask your parents or grandparents.
There was a time when you could walk in a bank and get a loan without anyone looking at your credit rating or examining your assets. The bankers there knew your family and your history and trusted your judgment to run your affairs.
They haven’t disappeared because they cant make money, but they have disappeared because large banks buy them at insanely over market prices because they recognize that gaining access to a neighborhoods finances is the key to pretty much owning it, similar to a old mafia family might. Their goals, allowed by law and supported by confused republicans and free traders, are simply profit and nothing else.
I say that is wrong and a wrong headed way of making our economy strong. If we had had more small banks that exercised judgment that people trusted for their loans for homes instead of banks people had to go to without one single person that knew them or they knew in the bank by name. Complete dehumanization, and the entire process antiseptic of void judgment. In a world with more small banks we would be far safer.
A small bank would never do those abusive bank loans that we saw these last few years, and they would never of loaned people who are not ready for a loan the money. However, that is not to say they would not of helped them get a home, just perhaps a smaller one or a condo.
There is so much evidence of how banks care less to little than less for the poor people in our society. For instance, have you ever wondered what group of people pays the overdraft fee of $30 on the average at their bank, the poor and weakest in our society? It’s a short term loan in disguise. Its impossible to get a checking account where they wont let you overdraft it from 100 to 1000 dollars and then the bank charges you huge fees for every over drafted check. And, if you are poor, you use this feature often, perhaps every month, and pay disgustingly high interest.
This is just the same business as the payday advance loan business which is completely over the top in its fees. At least however, they are separate and not ingrained in your daily activities.
I say these things can be fixed. Banks must stop providing secret wink and a nod over drafting at $30 a pop to the poor and never closing those accounts as start to stop paying checks when the balance is less than 0, and not charged the customer 30 dollars if someone presents a check or debit charge if the account is too low.
Look at PayPal. You make a PayPal account and move your money to it from your checking account and then if you happen to charge or try to use your debit card and you don’t have enough in your account, the debit card is simply denied. No fuss no muss no abuse.
If you do the same thing with a normal checking account, the bank pays the charge, lets say on April 1, $119 renewal to your XM radio service you forgot was going to hit. Okay now suddenly you are over drafted 119 for a service that don’t matter a lot plus add 30 to that, 149 overdraft. This happens unknown to you and you deposit your paycheck on the morning of April 2 at the night deposit box. And as you arrive home write the rent check for 1,050 and put it in the manager’s mailbox. Now this deposit of $1,100 raises your account to $950.
And, you just wrote a check for your rent. The rent check arrives at the bank on the 4th of the month and the account
This rent check hits your bank and the bank may or may not pay it. Probably they will if you haven’t done something foolish like buy a loaf of bread or something. And you are now over drafted $104 (assume you had $25 to start, subtract the xm and the overdraft fee, $149, add your deposit $1,100, subtract the rent $1,050 and the fee for the check needing to be force paid.).
Now this person who is working and struggling is $162 short of having the money to pay their rent and add $50 to that and 5 per day, so say they can pay it by the 10th or 7 days at 5 or 35 dollars. The rent due now is up to 1060 plus 50 plus 35 or 1145, they have 898 in the bank, so they are 247 dollars short, and 5 to 10 days from being served eviction papers and 40 days or so from being homeless.
This is their dirty secret. Dressed in posh clothing of old trusted bank, they are predatory with no, none, zero concern for people or communities. It does not matter how many people suffer or fail to them as long as they can collect these fees for services with no value to anyone. They create nothing of worth.
It does not ever help poor consumers to have bank accounts over drafted and a fee added to them. Also, it’s patently unfair to charge $30 dollars to just get denied. My god the entire bank does is look at your balance and say, not enough money. Charge you $30 for that? It’s beyond inhumane.
Assume if the bank had just denied the XM radio charge. No big deal. The rather innocent mistake this person made of forgetting to set aside money for that renewal does not start the cascade of brutality that banks impose on the poor.
In every case Banks take the moral high ground and say they are doing customers a favor by paying these over drafts and it’s a disincentive from people over drafting. Perhaps in a time when verification was not instantaneous it would be, but it isn’t any longer.
Another practice banks have started. In the old days they used to run all deposits to your account first, then the checks before finding and charging overdraft fees. Suppose you wrote a check for groceries on Thursday night and you get paid Friday and it’s deposited. The bank has no regard for the fact that they did not pay or in fact were not presented with your check till Friday. They use modeling tools to maximize their fees. So, the bank will in these so called modern times charge you that $30 fee even though they were not presented the check because they wont run the deposits first on Friday before the debits to your account. In old times it was considered respectful and a courtesy to always run your transactions this way. But there is more money in abusing the poor and the banks do it.
If you are moderately well off or at minimum have good cash flow, you are unaware of these practices. But the poor who receive say a $870 disability checks and write just a few checks if any each month, these types of fees can render them homeless with just a couple of innocent mistakes.
Bring back the small banks. Yes its okay to have a few big giant ones for the huge companies that need them. But mostly we don’t need every bank to be giant huge and impersonal and they can definitely make money as small banks, if the Government would just enforce the anti trust laws on the books.
Will anyone ever look out for the regular poor people again?
Are there any people willing to go into banking as a career and not sell out to big banks and help local neighborhoods? It’s very lucrative, even if you are kind and don’t take every predatory practice.
A few years ago I spoke with a fellow who is a top VP with a bank in Oklahoma and in that state they allow small individual banks and in fact they flourish. He told me that banking was incredibly lucrative and there were so many ways to make money at it. Even from the standpoint of a small neighborhood bank. So why are they gone and disappeared from our cities. At one time these types of banks and credit unions were the back bone of small neighborhoods, ask your parents or grandparents.
There was a time when you could walk in a bank and get a loan without anyone looking at your credit rating or examining your assets. The bankers there knew your family and your history and trusted your judgment to run your affairs.
They haven’t disappeared because they cant make money, but they have disappeared because large banks buy them at insanely over market prices because they recognize that gaining access to a neighborhoods finances is the key to pretty much owning it, similar to a old mafia family might. Their goals, allowed by law and supported by confused republicans and free traders, are simply profit and nothing else.
I say that is wrong and a wrong headed way of making our economy strong. If we had had more small banks that exercised judgment that people trusted for their loans for homes instead of banks people had to go to without one single person that knew them or they knew in the bank by name. Complete dehumanization, and the entire process antiseptic of void judgment. In a world with more small banks we would be far safer.
A small bank would never do those abusive bank loans that we saw these last few years, and they would never of loaned people who are not ready for a loan the money. However, that is not to say they would not of helped them get a home, just perhaps a smaller one or a condo.
There is so much evidence of how banks care less to little than less for the poor people in our society. For instance, have you ever wondered what group of people pays the overdraft fee of $30 on the average at their bank, the poor and weakest in our society? It’s a short term loan in disguise. Its impossible to get a checking account where they wont let you overdraft it from 100 to 1000 dollars and then the bank charges you huge fees for every over drafted check. And, if you are poor, you use this feature often, perhaps every month, and pay disgustingly high interest.
This is just the same business as the payday advance loan business which is completely over the top in its fees. At least however, they are separate and not ingrained in your daily activities.
I say these things can be fixed. Banks must stop providing secret wink and a nod over drafting at $30 a pop to the poor and never closing those accounts as start to stop paying checks when the balance is less than 0, and not charged the customer 30 dollars if someone presents a check or debit charge if the account is too low.
Look at PayPal. You make a PayPal account and move your money to it from your checking account and then if you happen to charge or try to use your debit card and you don’t have enough in your account, the debit card is simply denied. No fuss no muss no abuse.
If you do the same thing with a normal checking account, the bank pays the charge, lets say on April 1, $119 renewal to your XM radio service you forgot was going to hit. Okay now suddenly you are over drafted 119 for a service that don’t matter a lot plus add 30 to that, 149 overdraft. This happens unknown to you and you deposit your paycheck on the morning of April 2 at the night deposit box. And as you arrive home write the rent check for 1,050 and put it in the manager’s mailbox. Now this deposit of $1,100 raises your account to $950.
And, you just wrote a check for your rent. The rent check arrives at the bank on the 4th of the month and the account
This rent check hits your bank and the bank may or may not pay it. Probably they will if you haven’t done something foolish like buy a loaf of bread or something. And you are now over drafted $104 (assume you had $25 to start, subtract the xm and the overdraft fee, $149, add your deposit $1,100, subtract the rent $1,050 and the fee for the check needing to be force paid.).
Now this person who is working and struggling is $162 short of having the money to pay their rent and add $50 to that and 5 per day, so say they can pay it by the 10th or 7 days at 5 or 35 dollars. The rent due now is up to 1060 plus 50 plus 35 or 1145, they have 898 in the bank, so they are 247 dollars short, and 5 to 10 days from being served eviction papers and 40 days or so from being homeless.
This is their dirty secret. Dressed in posh clothing of old trusted bank, they are predatory with no, none, zero concern for people or communities. It does not matter how many people suffer or fail to them as long as they can collect these fees for services with no value to anyone. They create nothing of worth.
It does not ever help poor consumers to have bank accounts over drafted and a fee added to them. Also, it’s patently unfair to charge $30 dollars to just get denied. My god the entire bank does is look at your balance and say, not enough money. Charge you $30 for that? It’s beyond inhumane.
Assume if the bank had just denied the XM radio charge. No big deal. The rather innocent mistake this person made of forgetting to set aside money for that renewal does not start the cascade of brutality that banks impose on the poor.
In every case Banks take the moral high ground and say they are doing customers a favor by paying these over drafts and it’s a disincentive from people over drafting. Perhaps in a time when verification was not instantaneous it would be, but it isn’t any longer.
Another practice banks have started. In the old days they used to run all deposits to your account first, then the checks before finding and charging overdraft fees. Suppose you wrote a check for groceries on Thursday night and you get paid Friday and it’s deposited. The bank has no regard for the fact that they did not pay or in fact were not presented with your check till Friday. They use modeling tools to maximize their fees. So, the bank will in these so called modern times charge you that $30 fee even though they were not presented the check because they wont run the deposits first on Friday before the debits to your account. In old times it was considered respectful and a courtesy to always run your transactions this way. But there is more money in abusing the poor and the banks do it.
If you are moderately well off or at minimum have good cash flow, you are unaware of these practices. But the poor who receive say a $870 disability checks and write just a few checks if any each month, these types of fees can render them homeless with just a couple of innocent mistakes.
Bring back the small banks. Yes its okay to have a few big giant ones for the huge companies that need them. But mostly we don’t need every bank to be giant huge and impersonal and they can definitely make money as small banks, if the Government would just enforce the anti trust laws on the books.
Will anyone ever look out for the regular poor people again?
Are there any people willing to go into banking as a career and not sell out to big banks and help local neighborhoods? It’s very lucrative, even if you are kind and don’t take every predatory practice.
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