There are no fees at America’s smallest bank | Hacker News Reader

There are no fees at America’s smallest bank

bloomberg.com

113 pointsLastNevadan92 comments

This may be America's smallest bank, but there are smaller credit unions! From what I can tell, Holy Trinity Baptist Federal Credit Union is the smallest, operating since 1966 with about $16k in deposits according to their EOY 2022 financial report: https://ncuso.org/credit-union/17269/financials/

Here’s an interesting article about church-based credit unions. It looks like they exist to offer better options to underbanked populations and are often limited to church members: https://religionnews.com/2018/10/30/church-run-credit-unions...

Credit unions, by law, must have restrictions on who can join. Often times they're gated by where you live, what city you worship in, where you work. I'm a member of a large California based credit union and while the low/no fees are nice, their general incompetence is awful.

> I'm a member of a large California based credit union and while the low/no fees are nice, their general incompetence is awful.

Some banks have general incompetence, as well.

I'm a member of a mid-sized California based credit union, and their customer service and competence are fabulous.

Some banks have general incompetence, as well.

Sure and that puts them more or less on equal footing with credit unions. I've been with Patelco for decades and they're hands down one of the most inept financial institutions I've ever dealt with. Bank of America's obnoxious because everything is very stick to the script (and I've not banked with them in decades), but Patelco is just make it up as you go along. I've looked at other credit unions (Golden1, Redwood) and been pretty underwhelmed with the offerings. Redwood especially had the feel of being run out of someone's basement.

The membership restrictions have been watered down a lot. Anyone can join PenFed. There are others that require a token donation to an associated foundation.

I have been in more than one credit union and found they were just as bad as banks when it came to ridiculous fees. I therefore prefer the huge commercial bank as it is much more convenient.

I'm at a credit union for a chunk of my banking. Their tech is bad, but you know what I love?

When I call the number on the back of the debit card a human answers the call after a few minutes and 9/10 times can fix whatever I need fixed themselves.

Oh, it's the humans that are the biggest problem. In theory I've got a "password" on my account, in practice I think maybe one or two people have asked for it in the past decade. I went in to buy a couple rolls of quarters the other day… and eventually gave up and got them at Wells Fargo (where I'm not a customer) instead. Let's not get into how monumentally stupid it was of them to ditch NCUA (temporarily).

Their tech… well at least they're not using case insensitive passwords anymore. I had a hell of a time trying to figure out which branches were open – their own site buries contact info and instead heavily pushes their 'virtual teller' which is rather useless for getting quarters. Apple Maps is a few (5?) years out of date in terms of branch locations. Yeah, Apple is a third party company but you'd think one of their six hundred odd employees would've submitted a bug report by now.

I like the idea of credit unions, but this one just sucks. I keep them around because their own incompetence has granted me a favorable fee schedule.

Hmm, with a reasonably good bank you shouldn’t have had ten problems with your debit card you had to call. With things like bank cards, the best customer service is don’t need customer service.

The problems probably aren't with the card itself, the phone number for the CU just happens to be printed on the card.

Including donating $5 to a charity, where the credit union pays the $5 on your behalf: https://www.alliantcreditunion.org/membership#faqs

One man's modest used automobile purchase is another man's bank run.

  Sammons, the fourth generation of his family to run the 100-plus-year-old S&L and its only full-time employee, confides that he’s a bit tech-averse. “Computers are great when they work,” says the 55-year-old, laughing. “I don’t have the patience for them.”

Most days I bet most of us would agree with that statement!

Yep. I was just trying to fill out a PDF form for my taxes. A complete nightmare. Tried three different PDF viewers that had different bugs or incompatibilities with the form. Finally had to start a Windows VM to run Acrobat, that was the only way to get it done, other than print the blank form and fill it out by hand which in retrospect would have saved me about 40 minutes.

I have been in software and IT for my whole career and I absolutely hate computers now. I want nothing to do with them when I retire, and I'm going to deliberately structure my life accordingly.

Same. Sometimes my wife asks why I don't play on the computer or social media, and I tell her it's because I hate computers. She expectedly says...but you're a programmer.

I think doing anything all day every day sucks the joy out of it.

> I think doing anything all day every day sucks the joy out of it.

totally relatable. same might hold true with driving, cooking, gardening, etc also. :)

I've had decent luck with Xournal's "Annotate PDF" feature.

It's not really interacting with the PDF form at all, so if the form is at all complicated it'd be a waste of your time. But, if you just need to "sign" something by dropping a transparent PNG on a line at the bottom and typing in a date, it's perfect.

I have been going through the Canadian immigration process recently and I’ve had so many struggles with editing PDFs.

A former employer sent me a copy of my work reference encrypted with a password that I had to remove.

I had to install third party PDF software to fill out a Canadian government form. The native Mac Preview app couldn’t edit it.

A form for a police certificate seemed to be entirely uneditable with any third party software on my Mac.

I have no idea how ‘normal’ (for want of a better word) people are able to get anything done with PDF documents.

Master PDF Editor is the only proprietary software I use on my machine, and it's well worth the license fee.

https://code-industry.net/free-pdf-editor/ (free trial)

Same! This is a hell of a piece of software. It's fast and very easy to use, and it single-handedly makes you think PDFs are obvious and super simple. Which, knowing the truth, just blows my mind.

Using Master PDF editor is like watching a 60 second youtube physics video that's so good, you just understand quantum physics perfectly by the end of it.

You're the victim of Adobe's poison pill to make PDF only usable by their tooling with the inclusion of JS and ensuring that the traditional PDF form authoring isn't readily generated by Acrobat anymore.

Form creation is a front and center feature in Acrobat DC.

Like there's a form detector and a form editor and all that. You have to manually add javascript to those elements if you want it (well, there's an API, but you have to explicitly add the javascript).

> I have been in software and IT for my whole career and I absolutely hate computers now. I want nothing to do with them when I retire, and I'm going to deliberately structure my life accordingly.

Same here, whole career, tho retired now. I found that there was a "natural level" of computer time. In periods of my life when I was not tied to a computer at the office, I enjoyed computer time at home for games and projects.

But when I was working at a computer all day, I avoided computer games and hobbyist hacking like the plague.

I have about 50% luck with the js based pdf viewers just letting me edit pdfs now... I think it comes down to did the pdf creator actually put type areas in the form or did they expect you to have acrobat and just create new text boxes in the form areas. Oddly the IRS forms were really good with that this year.

I agree the dark patterns around PDFs and everyone putting a shareware version of a ope source program out is the worst.

Also a large % of the time open office works but hey that takes like 20 minutes to install.

The only thing I use acrobat for is it actually is quite solid for printing and doesn't seem to charge you for that.

Chrome handles forms relatively well.

(no idea if it would have handled your form or not)

Sounds like you are purposely making your life worse by using something like Linux. Don't blame the machine when it is running poorly tested software that likely did not consider UX.

Have you tried using a Mac full time? It lacks the ad-bloatware of Windows 11 while still retaining some POSIX compatibility.

I've used Mac, Windows 10, and Linux (KDE and Cinnamon). Linux has been an infinitely more pleasant experience.

I’ve used em all. I hate Windows. MacOS is “fine”, and Linux can be great. The issues with Linux are on edge cases, just like macOS. They’re just in different places, imho.

I did try my wife’s MacBook, it failed.

Half the time when my computer doesn’t “work” it is because I am using it to deal with outdated banks and credit cards. Today, I was trying to pay 2 parking tickets. First one went through just fine. Second one failed with invalid zip code, even though I was using the same one. Turns out that since I have different mailing and billing addresses, it was randomly picking the one to use.

Change that to "Computers/Printers" and you'll probably have universal appeal

Printers are directly descended from Satan himself.

Edit: and printing is the one part of the tech world that really is worse than it used to be. Most of the time, it’s just rose colored glasses that make us think things are worse. Computers used to be awful. Constant crashing and rebooting, and stuff randomly failing to work. Slow, bad UX, etc. printers, however, worked fairly reliably. Then… inkjet, laser jet and fuck this jet. Printers haven’t worked since inkjet became a thing. Dye sublimation printers, thermal printers, and impact printers seem to work forever without issue. The common inkjet printer is just a pile of plastic and bullshit.

What's hilarious is how much better my 3d printer is for usability than a paper printer..

That said get a B&W laser from brother or other and shit generally jsut works

That being said, the advent of USB made "Life with Printers" a lot more survivable. Parallel and (especially!) serial ports were straight from hell.

I think the regulatory pressure to consolidate is well known by the Fed leadership, and they've at least announced a desire to protect small institutions and do more to encourage de novo institutions[0].

But I disagree with the idea that Dodd-Frank in particular has much to do with encouraging smaller banks to consolidate, considering its provisions kick in at defined levels of capitalization. The practice of "charter stripping", which is when fintech/crypto startups purchase a small community bank for their Federal banking charter and discard the rest, probably has a bit more impact, and that's exactly what relaxing the rules against de novo charters would alleviate.

[0]: https://www.bankingdive.com/news/federal-reserve-governor-Mi...

> According to Roger Lowenstein, a financial journalist and author of America’s Bank: The Epic Struggle to Create the Federal Reserve, bank regulations used to protect small lenders in particular—in the 1930s you couldn’t have more than one branch or operate across state lines.

I say we bring this back. Split up the "too big to fail" ultrabanks.

There's a good reason we got rid of that regulation. With limited geographical dispersion, local bank runs could be really damaging.

But yes, too big to fail is an issue, but small and easy to fail is another.

> Split up the "too big to fail" ultrabanks.

why?

https://archive.is/jfRGB

How viable is a bank, which offers exactly:

* No physical bank branch. Only online banking

* a current account with a monthly fee

* a debit card that can be used at other banks' ATM - monthly fee.

* Debit card can't be directly used online. But you can generate merchant specific card numbers on the website.

Say, your monthly fee is $20. Then 4000 customers brings in a million dollars an year. How much is spent on fraud by a bank every year?

Could a single person with a few part-time contractors run a bank of this nature?

Good luck developing all the software and infrastructure needed for online banking, card processing, all the compliance paperwork, etc. with just a million per year.

Remember that any time something with your online banking goes wrong it turns into a customer support call, which isn't just frustrating for the customer but also expensive for you.

Also, why would I bank with a bank with hacky online banking that charges me $240/year when I can have the same for free at one of the many fintechs?

> Could a single person with a few part-time contractors run a bank of this nature?

You have 4000 customers. If each of them has one customer support contact per year (your website better work well!) that's 11 calls per day or ~20 per working day.

Why would anyone use such a bank when pretty much every other bank and credit union in existence is cheaper and more convenient?

I don't think a single person with a few part-time contractors is getting a banking licence in many jurisdictions

The UK has a few "challenger bank" startups which are basically just an app, but they're not lifestyle businesses, they're "raise £10m before you launch" businesses.

Back in ye olde days of 1998 - https://en.wikipedia.org/wiki/Egg_Banking

Monzo started probably the closest to OP description - https://www.alexanderjarvis.com/monzo-pitch-deck-raise-serie...

This is kind of how I'm set up. I use Ally for their checking and savings and privacy for their merchant specific card numbers. It works reasonably well for me.

It would be cool to have a real FDIC insured, licensed bank with this built in some how. I'd be willing to pay $25/mo for something that is first-party.

Citi has had "virtual account numbers" since at least 2005. (Back then, you needed the Flash player to use them, or was it Java...)

Relay (Thread Bank) offers generating virtual cards.

It feels like you are describing something like N26 and other German microbanks, except they offer real debit cards and the only fee is for sending you the physical card.

These sound like direct banks. In Germany, there are a few of those, ING being the largest, and represent about 50% of the private market. Pretty viable therefore.

ING [1] is offering a variety of financial services, including financing and savings accounts. Such banks necessarily have to operate at scale, in order to offset fraud/investment loss. I am specifically asking for the viability of a small "dumb" bank, which engages in only the lowest risk activity.

Surely, technology has reached the point where a small team can create a bank of the sort I am suggesting. But do financial regulations and economic realities allow for it?

[1] https://www-ing-de.translate.goog/?_x_tr_sl=en&_x_tr_tl=ur&_...

I don't think the economies allow for it. The German Sparkasse started as a savings bank and at its core was/is a 'dumb bank' in your words. But at some point customers demand financing etc. and would like to get all their basic needs from one bank instead of having multiple. So these banks adapted.

ING, when they had US retail banking operations, wasn't huge but they also did things differently. For instance they did not offer fixed rate mortgages – it's a lot easier to keep an adjustable loan on the books. They also did tech better than most banks (until the dumpster fire that is Capital One bought them out).

Sounds like you're basically describing CashApp's debit card. Also gives cashback rewards

I have bank accounts in 3 different countries and none of them have any fees either.

What they have thought is redundant documentation of my funds that guarantee I won't be SoL when the building burns down with the paper ledger in it like this bank here.

I really don't understand this fascination or even admiration for outdated ways.

I'm sure Mr. Sammon's typist keeps the pink copy of the carbon with your account data on it offsite.

Many of this bank's customers would be baffled at the necessity of having bank accounts in three different countries. They haven't left Newton County, Indiana since high school.

The old-school way to document savings accounts is with a passbook:

https://en.wikipedia.org/wiki/Passbook

If this bank offers that, then you have the redundant documentation yourself.

That doesn't seem like the kind of redundancy that the bank would trust. It's nice for you to see what is in your account but you cannot reconstruct a trusted bank ledger from those.

(but I may be wrong, the wikipedia page is short in details)

> I have bank accounts in 3 different countries

How is this even possible? Do you have citizenship in all three countries?

I have lived and worked in 3 countries and have kept the bank accounts I opened there since. They usually won't allow you to open a new bank account without being a resident, but you can notify them of your new tax residency once you move out and keep your account, credit cards, etc.

I could have more if I had kept the account I had when studying abroad but it had fees to keep it while empty.

Actually with Revolut I have also an account domiciled in Lithuania.

It's the opposite. You just really, really need to not be a US citizen.

If you reside in the European Union, you can easily have bank accounts in any other EU country. Apart from that, plenty of banks in many countries allow you to open an account even without residency or citizenship.

Getting an account as a US citizen in the EU used to be easier, but the US put in place onerous reporting requirements that made US citizens mostly unwelcome unless you have a lot of money. Very frustrating to have a bank close your accounts because dealing with the US reporting is too much of a hassle.

temporary residence or work permit is enough. and you can have that in multiple countries at once.

With an aversion to technology, i really wonder how this bank supports electronic transfers like ATM, ACH, wires etc. Is there a core banking system running?

> Is there a core banking system running?

The Minimum Viable Bank System is a paper ledger, paper Know Your Customer records, and cash in a locked container. You don't have to support electronic transfers or even paper checks. Just let people withdraw and deposit in-person at the only physical office.

The article states they do none of that. Just savings that you can drop off or pick up at the branch.

So fees don't matter if you offer no services.

The service is your money being safer than under the mattress. They also make home loans.

Well you are trusting someone else with it, that doesn't sound much safer.

It's FDIC insured and regulated.

So hold on, if these credit unions are so small and still get insured, why not just make one for yourself? Put your money into it, gamble to your heart's content, either you win big or the FDIC takes over and gives you your money back since you're technically a depositor lol. Literally cannot go tits up.

I'm sure if it was that easy people would be doing it.

Hmm from what I can find there's two things, FDIC doesn't handle credit unions but NCUA, and a credit union may need a minimum number of depositors for protection to apply. Maybe one can convince enough people to deposit $1 with a contract that they get a share of the gambling winnings in case there are any.

And vice versa, for some.

As far as ACH goes, the same way they did it 30+ years ago. You don't need to be technology inclined to perform ACH transactions. NACHA was around in 1974. The ACH network has existed for most of its history without any notion of the modern internet or our current digital world, and most of it still works "offline"

NACHA requires you to upload a formatted file and it's a character offset format that you can't do by hand. There's a computer in the mix. There is also ACH pulls that you need have error handling around for invalid account numbers and insufficient funds. I guess you could just do it by hand.

Theres 100s of services that will do it all for you (you meaning bank). In fact if you join NACHA itself, I am sure they offer some or at least have affiliates.

It seems not to support ATMs, as mentioned in the large sub-heading (the "deck" as it's known in news parlance).

> There’s no ATM, no website and constant worries about being “too small to survive.”

There are multiple ways to read that: as a bank, you can have no ATMs, but still allow your customers to withdraw money via other banks' ATMs, though there is almost always a fee for this. (But I can even see one still claiming "no fees at this bank", as the fee could be assessed by the ATM-owning bank.)

I can't comprehend how this bank would be able to afford any variety of digital core banking system.

Compliance & management over the IT stack alone would probably be cost prohibitive. You can outsource just about everything, but at some point you still need a physical person to come in and manage the computer your part-time teller uses.

How many mortgages can they service with 3M in assets? Seems like they'd be very limited in that regard.

In the US, originator mortgages get sold to other banks, who then can wait 30 years for repayment. For example, Fannie Mae.

https://www.fanniemae.com/about-us

From the article:

There are currently only 40 or so mortgages outstanding, and as customers pass away, the stock is not being replenished with loans to younger generations, who have no particular affinity for in-person banking.

The realest form of attrition...

There's a nice documentary from 2002 about Germany's smallest bank, which also doesn't use computers: https://de.wikipedia.org/wiki/Schotter_wie_Heu

I like my credit union, no fees, good support (in person though...), easy to setup accounts. It's a little dated it feels like but the app is reasonable, with so many type of banking options I'm surprised people would use a bank with fees. I've been using Chime for years with no issues, online banks work for me just fine. I can understand a little more though when it comes to international travel because there tends to be more restrictions, I have a small chase account for international travel as the card just seems to work better but I rarely use that account and would probably close it if I found a better international debt card.

Or just use Fidelity, which has 0 fee as well. Free wire transfers, free ATM reimbursements etc. On another side, it actually has branches scattered throughout too.

Schwab is a little bit better for this:

1) Like Fidelity, it requires you to open a brokerage account, but the minimum deposit is $0, unlike Fidelity which last I checked was $2,500

2) $1k/day ATM max instead of $500

3) ATM fee reimbursement is worldwide and no forex fees, can't remember anymore if Fidelity had both of these

I think the value is actually towards the Fidelity CMA right now and I'm saying this as a long-time Schwab enthusiast.

To your points:

1. No minimum opening or ongoing balance required on the CMA. Note. You don't have to open a separate brokerage account. The CMA is a brokerage account.

2. If push comes to shove you can always do a manual cash disbursement (aka "cash advance", but there's no line of credit involved here) from any bank displaying the Visa logo. The range ($500, $1000] is a little too specific to be useful, and you'd probably have to hit up multiple ATMs anyway. It is also much easier to have multiple Fidelity CMA accounts than multiple Schwab Bank accounts if for some reason you really need specifically ATM network transactions.

3. This is partially correct but not as big as the deficit you're stating. Fidelity charges 1% if the card is used for a foreign Visa debit purchase. ATM fees are reimbursed globally (supposedly a little less reliable than Schwab) and forex is zero on ATM. The only time I've seen a need for this is back when Chip-and-PIN was first being introduced and my credit cards weren't working with offline PIN in Europe. Since then, I don't think I've ever needed to use the Visa debit network.

In comparison:

A. Schwab free wires are limited to three per quarter and only if you have $100k of assets. Fidelity wires are always free. The web interface is worse on Fidelity though: you have to call them if over $100k, if you have a memo, or if you have further credit instructions, so take this with a slight grain of salt. If you have consistent memo/further credit instructions you can send a form in to be able to do these online. The "not having to worry about quota" is super nice.

B. The ability to auto-liquidate money market funds, as the Fidelity CMA is actually just a brokerage account, for incoming ACH/ATM/Visa/check debits at any time of day or week makes the Fidelity product far more useful than Schwab's ridiculous 0.2x% interest product. It means I no longer have to worry about my account balance, which can safely be at $0 (as long as there are sufficient appropriate money market fund investments).

1. Fidelity has $0 minimum deposit.

2. Sure, Fidelity has $500 ATM withdrawal limit.

3. Fidelity reimburses ATM worldwide. As for transactions, If you're using your DEBIT CARD in a foreign country (or even within USA) for transactions and not a credit card, you're doing something wrong. Enjoy having to deal with a bank investigation in case of a scam when you're out of your own money than the bank's money. IIRC some accounts have a 1% transaction fee in foreign nations but not for ATM.

999. No wire transfer fee. This will always trump anything else for me as a major primary account.

You're wrong about the first point - the cash management account IS the brokerage account, and there's no minimum.

No no forex fees either.

Hi I’m Fred! I have a bank!

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