Unbanked? grab your ankles!

[hornadylnl]

Just found these articles online. It looks like we get to subsidize the poor, downtrodden, and irresponsibles bank accounts now. How are bank fees not going to go up to cover this crap?

Jconline - Programs help 'unbanked' avoid high fees
Programs help 'unbanked' avoid high feesUpdated 11/5/2009 8:25 AM ETBy Martha T. Moore, USA TODAY
Dozens of cities are launching programs to sign up low-income people as customers at commercial banks so they can avoid the high fees typical of check-cashing stores and payday lenders.
More than 50 cities and at least three states now have programs modeled on the 3-year-old Bank On San Francisco.
The programs — including Indiana's, launched last week, and Newark's, which began Monday — are aimed at the estimated 8.7 million American households that do not have bank accounts. Bank On programs encourage residents to open low- or no-cost checking accounts.
Participating banks and credit unions must offer "second chance" accounts for customers who have bounced checks in the past, and accept identification besides Social Security numbers, such as taxpayer identification numbers.
"We wanted to open up access to the financial mainstream," says Leigh Phillips of Bank On San Francisco, which has opened 41,000 accounts since 2006. "We do think we've made a pretty significant impact."
CHALLENGES: Banks reach out to cities' low-income residentsPeople who don't use banks spend an estimated $1,042 a year on check-cashing services, which charge a percentage of the value of the check, according to a study by the Pew Charitable Trust.
Fear of fees and lack of trust in banks are two main reasons why people do not have bank accounts, the Pew study found. Public scrutiny of overdraft fees on checking accounts, which in 2009 are expected to reach $38.5 billion, has led to congressional legislation that would regulate such fees.
"Clearly lots of lower-income folks are concerned about or have been burned by the tricks and traps of a traditional bank account," says Paul Leonard of the Center for Responsible Lending. "The big question is whether or not (Bank On programs) are creating sufficient safeguards to prevent the new enrollees from accruing fees."
Some Bank On programs require banks to waive one set of overdraft fees annually.
"It is a big issue that we need to pay attention to," says Jerry DeGrieck, who heads Bank On Seattle-King County.
City officials say it is too soon to know whether Bank On participants will really save money but that a bank account is a necessary step toward financial progress for low-income families.
"Even with the risks associated with fee structures," says Newark Deputy Mayor Stefan Pryor, a bank "still beats a check-cashing establishment on the corner of your neighborhood every time."


Jconline - Programs work through challenges of 'unbanked'


Programs work through challenges of 'unbanked' Updated 11/5/2009 8:42 AM ETBy Martha T. Moore, USA TODAY
NEWARK — Yvonne Jacobs dashes into Express Check Cashing, a combination liquor store and financial services establishment on Mount Pleasant Avenue. A sign spells out the rates: To cash your paycheck, Express takes 2%.
Down the block at Wachovia Bank, Jacobs could cash her check for free if she were an account holder — or deposit it and not risk carrying cash. But like an estimated 15,000 households here, Jacobs doesn't have a bank account.
CUTTING COSTS: Bank On model helps customers avoid high fees"I would like a bank account, because you need a bank account in this date and time," says Jacobs, a nurse. But banks charge fees: at Wachovia, $22 for an overdraft, $25 for a stopped check. "Every little thing, they charge you for," she says. At Express she pays up front. "I know it costs me X amount of money to cash my check," she says.
Jacobs is one of the "unbanked" people Anthony Santiago wants to reach. The chief operating officer of Newark Now, a community organization, Santiago is working with the city to encourage low-income residents to open bank accounts. Bank On Newark, with 11 banks and credit unions participating, launched Monday.
It is one of almost 60 Bank On programs created in the past three years, as cities persuade banks to offer special accounts for low-income residents — including those who have had problems banking in the past. The programs focus on financial education to move participants away from alternative financial services such as check cashers and toward bank accounts without running into overdraft trouble.
"Folks should be able to have a lot of the basic things we take for granted" such as debit cards, Santiago says. Newark's goal is to open 3,000 accounts in the program's first year.
But Orfilio Chaviano, the owner of Express, says his customers don't want to open bank accounts. "Pie in the sky," he calls the city's program, as he stands on Mount Pleasant Avenue near Jacobs. He says his customers prefer his upfront fees to worries about bouncing checks.
"I don't see how these people can maintain a bank account" without overdrafting, Chaviano says. "How much is a bank going to charge for a returned check? … They're more expensive" than a check casher, he says.
Cities are trying to help Bank On participants succeed by working with them and with the banks they will entrust with their money.
In Indianapolis, banks must go through a checklist of financial education topics before opening a Bank On account, says Perla Williams, Bank On project manager for the city. Customers are also referred to money management classes at community centers.
In Seattle, the Bank On program offers explanatory brochures — with information on avoiding fees — in 12 languages and helps banks write their own easy-to-understand information about accounts. Some banks in the program will give account holders $50 or $100 in a savings account if they go through money management programs run by community groups.
The program doesn't require financial education before opening an account. "It simply doesn't work," says Jerry DeGrieck of Bank On Seattle-King County.
Newark got participating banks to offer one free money order per month, which many low-income residents need because their landlords won't take a check, and which check-cashing stores offer more cheaply than banks do. "That's one little thing we had to fight for," Santiago says. "We asked for three, and they got it down to one. But at least the rent is taken care of."
Concern that new customers would get into trouble with automatic overdraft fees led New York to skip a Bank On program. Instead, the city will offer, through banks, checkless accounts in which customers get a debit card loaded with the value of the account. Once the money is gone, transactions won't go through.
"This is a way for us to guide people into a safe banking experience," says Department of Consumer Affairs Commissioner Jonathan Mintz. "It's a way to get them started, rebuild their confidence, rebuild their credit."

[2ADMNLOVER]

"This is a way for us to guide people into a safe banking experience," says Department of Consumer Affairs Commissioner Jonathan Mintz. "It's a way to get them started, rebuild their confidence, rebuild their credit



What it really is , is one step closer to controlling everyone .

[Phil502]

Its another form of welfare and the banks make money too, we pay extra and low incomers and people without SS numbers :read illegal alien: get to have an account.

Real funny: low income people are afraid of savings accounts because they have been burned in the past, what is that bs?

[rambone]

Don't underestimate the extent of socialist brainwashing. Even people here jump at the chance to punish evil banks/bankers. Just look at the threads about the recent credit card "reform."

[WabashMX5]

"Clearly lots of lower-income folks are concerned about or have been burned by the tricks and traps of a traditional bank account," says Paul Leonard of the Center for Responsible Lending. "The big question is whether or not (Bank On programs) are creating sufficient safeguards to prevent the new enrollees from accruing fees."

"Tricks and traps" like addition and subtraction in a check register? "Tricks and traps" like not spending more than you have in the account? What possible "sufficient safeguards" could you possibly use to save people from themselves -- oops, sorry, "prevent the new enrollees from accruing fees"?!?

If you can't keep track of that on your own (like the nurse in the story), why not open a basic passbook savings account with a token amount of money in it, then cash your checks at that bank as its customer, instead of a ripoff check-cashing place....

[2ADMNLOVER]

Originally Posted by WabashMX5

"Tricks and traps" like addition and subtraction in a check register? "Tricks and traps" like not spending more than you have in the account? What possible "sufficient safeguards" could you possibly use to save people from themselves -- oops, sorry, "prevent the new enrollees from accruing fees"?!?.

It's not as black & white as you make it out to be .

For example , how about when you use your debit card at a gas station , have the money come out of your account right there instead of two weeks later causing an overdraft fee along with every other fee they can tack on .

[CarmelHP]

Originally Posted by 2ADMNLOVER

It's not as black & white as you make it out to be .

For example , how about when you use your debit card at a gas station , have the money come out of your account right there instead of two weeks later causing an overdraft fee along with every other fee they can tack on .

How's that any different that keeping track of your checks written. Sounds black and white.

[jblomenberg16]

While there are certainly some risks and potential concerns with these plans, the motivation is not as sinister as you might think.

I'm a board member of our local United Way, and through our community needs assessment- independent of this study, and the overal United Way of America study - we determined that a major hurdle for many in our community is financial independence.

That lack of independence in turn creates dependence on social welfare programs that taxpayers do in fact subsidize. We are going to work on a similar local effort to help folks get set up with bank accounts so that they can put more of the money they do make into their pocket, so they can do things like pay their bills, feed their families, etc.

Right now someone who is working, but makes less than the poverty limit wage spends a very large % of their annual income on check cashing fees, money order fees to pay bills, and tax filing fees.

As an example, lets say you make $7 and hour. You work 40 hours a week, 50 weeks a year. You make $14,000 per year before taxes. (Granted income taxes on $14,000 are more or less nil). So lets assume you spend $1000 a year to have your paycheck cashed and pay money order fees so you can pay your bills (many utilities and other companies don't accept cash payment anymore, or have collection centers out of town that require payments to be mailed in - shouldn't send cash via mail). That is 7% of your annual income that is immediately gone. Now try to pay the rest of your bills with $13,000 a year. Could you do it?

Even if you make $100,000 a year, would you really want to spend $1000 on fees? Wouldn't you want to keep that money rather than pay it away? Certainly the banks that participate will make some money from these programs in the form of fees and interest, but is that a bad thing? Isn't that basic capitalism? Sure there is some government backing to reduce fees and such.

This program is by no means perfect, but I can assure you it is not another government ploy to gain control over the general population.

[hornadylnl]

you might as well pound sand. It would be more productive because you can't fix stupid. We get the same sob stories every tax season. Single mother, 4 kids, paying an exorbitant amount of interest for an instant return on her $4k tax check. WTF does she care. That $4k is nothing more than a welfare check because she didn't pay a dime in taxes.

Originally Posted by jblomenberg16

While there are certainly some risks and potential concerns with these plans, the motivation is not as sinister as you might think.

I'm a board member of our local United Way, and through our community needs assessment- independent of this study, and the overal United Way of America study - we determined that a major hurdle for many in our community is financial independence.

That lack of independence in turn creates dependence on social welfare programs that taxpayers do in fact subsidize. We are going to work on a similar local effort to help folks get set up with bank accounts so that they can put more of the money they do make into their pocket, so they can do things like pay their bills, feed their families, etc.

Right now someone who is working, but makes less than the poverty limit wage spends a very large % of their annual income on check cashing fees, money order fees to pay bills, and tax filing fees.

As an example, lets say you make $7 and hour. You work 40 hours a week, 50 weeks a year. You make $14,000 per year before taxes. (Granted income taxes on $14,000 are more or less nil). So lets assume you spend $1000 a year to have your paycheck cashed and pay money order fees so you can pay your bills (many utilities and other companies don't accept cash payment anymore, or have collection centers out of town that require payments to be mailed in - shouldn't send cash via mail). That is 7% of your annual income that is immediately gone. Now try to pay the rest of your bills with $13,000 a year. Could you do it?

Even if you make $100,000 a year, would you really want to spend $1000 on fees? Wouldn't you want to keep that money rather than pay it away? Certainly the banks that participate will make some money from these programs in the form of fees and interest, but is that a bad thing? Isn't that basic capitalism? Sure there is some government backing to reduce fees and such.

This program is by no means perfect, but I can assure you it is not another government ploy to gain control over the general population.

[5.56'aholic]

Originally Posted by jblomenberg16

While there are certainly some risks and potential concerns with these plans, the motivation is not as sinister as you might think.

I'm a board member of our local United Way, and through our community needs assessment- independent of this study, and the overal United Way of America study - we determined that a major hurdle for many in our community is financial independence.

That lack of independence in turn creates dependence on social welfare programs that taxpayers do in fact subsidize. We are going to work on a similar local effort to help folks get set up with bank accounts so that they can put more of the money they do make into their pocket, so they can do things like pay their bills, feed their families, etc.

Right now someone who is working, but makes less than the poverty limit wage spends a very large % of their annual income on check cashing fees, money order fees to pay bills, and tax filing fees.

As an example, lets say you make $7 and hour. You work 40 hours a week, 50 weeks a year. You make $14,000 per year before taxes. (Granted income taxes on $14,000 are more or less nil). So lets assume you spend $1000 a year to have your paycheck cashed and pay money order fees so you can pay your bills (many utilities and other companies don't accept cash payment anymore, or have collection centers out of town that require payments to be mailed in - shouldn't send cash via mail). That is 7% of your annual income that is immediately gone. Now try to pay the rest of your bills with $13,000 a year. Could you do it?

Even if you make $100,000 a year, would you really want to spend $1000 on fees? Wouldn't you want to keep that money rather than pay it away? Certainly the banks that participate will make some money from these programs in the form of fees and interest, but is that a bad thing? Isn't that basic capitalism? Sure there is some government backing to reduce fees and such.

This program is by no means perfect, but I can assure you it is not another government ploy to gain control over the general population.

While i understand your concerns, and feel for the people in these situations, many need to learn to help themselves. What ever happened to personal responsibility? Rewarding people for making poor decisions is what is dragging this country down. Government is guilty of it, Wall Street is guilt of it, and so on down the line.