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Comment by francis-io | Hacker News Reader

Why does it discriminate against poor people? Do bank accounts cost money in america?

> Do bank accounts cost money in america?

Yes. Going to a bank costs time + money. Having a bank account costs money (and has spiked in price recently). Maintaining good standing with a bank costs time + money. Even not using a bank account, still costs money in America. ("Inactivity fees").

https://www.cnbc.com/2017/07/21/the-crazy-growth-of-bank-fee...

https://www.forbes.com/sites/learnvest/2018/04/05/americans-...

Hm. I live in Iowa, and my bank account is free.

Still costs in time (e.g. get off work to go to bank and open the account) which makes it impossible for some folks working shift-jobs. E.g. the poor.

Most of the working poor work one or more part time / shift jobs. If it is shift work, that means there are times when they aren't scheduled during banking hours. People that are poor that work 9-5, would have Saturday open to them, and many banks have friday hours till 7:00 pm.

Still not a good situation, but worse is trying to schedule things like doctors / dentist appointments. Especially if they have to be scheduled weeks / months in advance, before you know what your work schedule for that week would look like.

No. If you follow your agreement, it costs basically nothing. It's true for every mutual transaction (not only for banks). Also no-one forcing you to create accounts in ONE particular bank, you can shop around. there are plenty of options with minimal to no fees accounts.

> there are plenty of options with minimal to no fees accounts.

Do you have some options that have no strings (like minimum balance) attached?

Basic DDG search, and there are plenty of others: https://www.capitalone.com/bank/checking-accounts/online-che...

Other people are going to suggest online banks, which are excellent, but you can't deposit/withdraw cash easily to those, which is the main purpose poorer people have for a bank account.

Instead, try local credit unions. As an example where I'm at, Indiana Members Credit Union has a checking account with all the normal perks of a checking account and no fees. And credit unions work together with the major banks to give their members access at most ATMs.

I wasn't going to, I suggested below. Also it's capital one.

In any capital one branch you can make a deposit/withdrawal with your 360-checking account. If they give you freedom of online-banking it doesn't mean their branches magically become unaccessible to you.

I didn't intend to put down your suggestion, like I said, online banks are great, but there isn't a capitol one, ally, or discover bank in my state. So for people who use cash, a credit union is an excellent choice.

Ironically, people who are being “discriminated” against with progressive, cashless initiatives, live in states where capital one branches and ATMs are on every corner.

7 percent of Americans are 'unbanked'.

There are technically free bank accounts, but they often require a minimum balance, or have other gotchas. They all require identity information that may not be accessible to certain immigrants. Children also have trouble getting bank accounts.

For someone deeply in debt, a bank account is also unworkable because various legal entities can seize money from the account for the debts.

Yeah, that last point is a constant fear for me. I don't have a lot of money, but it would be highly damaging if they decided to make good on their court ruling that says they can take my money.

Worse still is that when I went to the bank to ask if they would limit it to the amount of money that I have rather than letting them overdraft my account, they didn't give me a clear answer, so for all I know, the debt collectors can essentially transfer the debt to the bank where I would be unable to close the account and would start accruing overdraft fees, which would then eventually get put back into collections.

Again, this hasn't happened, but the bank won't tell me whether or not this is possible, saying merely "it depends on the court order".

Going to the bank costs something, if not the opportunity cost lost. When you are poor, every opportunity or cost matters much more. Most banks require some form of ID or address verification, which again could require travel somewhere. Finally, even if you assume the most seamless, easy to sign up online-only bank, you are assuming a stable, reliable way to access the internet, which again, can be issue if you are poor.

Paying by cash has an opportunity cost too, over the course of doing it many times.

I think the bigger problem is that if your bank balance is (consistently) below a certain threshold, most banks will charge you a monthly fee.

Before cashless stores, what was the opportunity cost of paying by cash?

You have to spend time getting cash out of your wallet and counting your change. The time adds up.

You also have to spend time putting in our card, then your pin, then signing something, all the while waiting on their slow connection on each step. IMO, it's faster to use cash in most cases.

Going to the bank takes time, fuel, etc., which someone working two jobs to feed their family may not be able to afford and many banks do charge fees for having a balance below a certain amount or not having so many direct deposits.

A lot of prepaid debit and gift cards charge a fee so that’s also not an option. Newer phones with NFC payment technology also tend to cost more.

Outside of bank accounts, credit cards can also be disastrous for people who have never been taught to manage money effectively.

And all of this says nothing about how data collection via cashless payment systems can harm and discriminate against disadvantaged people.

It's also about the principle of not living in a world where having a relationship with a privately run (for profit!) financial institution is necessary to participate in society, when the government prints and issues perfectly good currency.

You could simply choose to do your banking at a not-for-profit credit union and avoid the relationship with the for-profit financial institution.

Americans are not guaranteed basic backing services.

If you have a low income and go to a bank to open an account, they may simply say "no" because you're not going to be a valuable customer.

citation? Not my experience. Heck, even kids can open a bank account.

Anecdotally, a bank once refused to open accounts for my kids, so I later researched the situation and found that there was absolutely nothing I could do about it.

If you are refused a new account at every bank, you have no recourse via the law. You're just unbanked, and then business models exist to extract money from you to provide extremely limited access to the banking system, using extortionate fees.

My grandmother wanted to deposit $200K in accounts at different banks and they wouldn't allow her to open a basic checking account because she had no credit history. She and my grandfather had never gotten a loan in their lives.

No, but pre-requisites to bank accounts do, like permanent addresses.

Maybe it's my view as a non-Chicagoan but when I was there recently and had to buy a Ventra card (for using the El trains etc), I was pleasantly suprised to find out it was also a pre-paid Mastercard. To me, means that those who are otherwise unable to access banking services, for example those without a fixed address, can still use online payment services. I was impressed but not sure if that was the city's intent?

Sometimes. “Maintenance” fees. “Inactivity” fees.

The logic behind these are apparently that they’re polishing your coins, and I guess that since you weren’t using your money, the bank decided you abandoned it, and so it’s theirs now.

If your bank is charging you those kinds of fees it’s time to get a new bank. My credit union doesn’t charge any fees and to keep it open you need $5 in savings. Most of the time they pay me some small amount for my savings.

Not to mention they have programs and loans specifically for lower income households.

Doing business with someone, especially in a heavily regulated industry like banking, can involve lots time spent on customer service. It makes sense to me that some people's funds aren't worth it due to the lack of interest they generate versus the cost of providing customer service and additional liability.

If there is profit to be made, then there should be other banks (since there are still many competing banks) willing to provide the services for free.

What's the problem with a company "discriminating" poor people? The case could be made that any company providing services for money is discriminating against the poor.

> What's the problem with a company "discriminating" poor people?

From the point of view of a company, probably nothing in their eyes.

From a societal point of view poor people already have an uneven playing field when it comes to a fair shot in life so making that worse seems like a bad idea.

Unless for some reason you like a permanent underclass of people stuck where they are for some reason I guess.

I personally don't, social mobility is generally a good thing (not least for the economy as a whole).

Is Tesla evil for discriminating against the poor?

The proper way to discriminate is to require membership with varying and/or vague requirements to maintain plausible deniability. This is a bit more difficult to implement for regular retail type establishments, but requiring membership to the electronic banking system made it easy.

A single cashless store? Not a problem. Every store and service in a town/city being cashless? That's a problem because even though they are individually private institutions, together they effectively lock someone out of participating in society.

They don't. Well, technically some require min balance to avoid fees but generally there are a lot of free options (as long as you don't go into overdraft).

My guess is that it generally "discriminates" illegal aliens as banks require valid IDs (which may also NOT be true since you should be able to open an account using your valid foreign passport)

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