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Comment by bethling | Hacker News Reader

You also run into the situation where banks check your credit/banking history and may deny you an account based on that. My partner couldn't open a bank account for years because they forgot to stop an auto payment after they closed the account and moved.

Those payments bounced, leading to fees, which kept compounding and even after taking care of that, it took a long time to figure out how to clear the mark on the report (I don't know if we did, or it just eventually fell off due to time)

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The EU solution for this was legislation that mandates that banks can not refuse a basic payment account. Being able to participate in electronic settlement is necessary to participate in modern society, so even a bankrupt person convicted of felony fraud should have a right to a bank account somewhere, and it's the duty of the society/government to ensure that they can obtain one.

The US is attempting to pass similar legislation on America politics time.

https://www.congress.gov/bill/116th-congress/senate-bill/357... (S.3571 Banking for All Act)

It also expands the USPS Postal Banking capabilities and mandate.

Edit: The Federal Reserve's FedNow instant payment system going live in 2023 should also eliminate the need for check cashing in its entirety: https://news.ycombinator.com/item?id=28393576

> banks check your credit/banking history

Those are not the same thing. Banks will deny you an account based on your history with bank accounts, sure. But not “credit history”, which is entirely separate.

If it's a regular checking account, with no overdraft, the bank loses nothing from having a person like that as a customer. The only money they can use is their own that they deposited there.

In US banking, many customers are relatively costly, with low balances, requiring branches with expensive people to service them. Overdraft happens often with them, and is a cost to the bank. They cannot be given credit, and are not otherwise candidates for other services by which banks make money. So fees- overdraft, deposit, withdrawal, desk usage, account- it is.

Banks don't have to allow overdraft. That's an optional lending service.

But if they don't allow overdrafts, they can't charge overdraft fees.

And you hit the nail on the head. It all comes back to the dollar in the end. Making the most money per customer.

It is an optional service, one that is highly profitable ($billions per year for each of the large banks), and one also that arguably best serves the customer's interest, as not making a payment in most cases is far worse for many reasons for the user than making the payment and getting charged a service fee.

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