Here is what bothers me about this. How can you not get a regular bank account? Doesn't Bank of America just require an address, plus a deposit? What else is needed? I think it's more fair to say that they don't trust banks, rather than can't get regular bank accounts.
You can be denied an account. There's a company called ChexSystems that maintains a "bad customer" database and basically tells banks not to give you an account if you've ever bounced a check or had some other mishap.
Doesn't Bank of America just require an address, plus a deposit?
You can get a bad checking account with high monthly fees, check writing fees, ATM fees, etc. I'm pretty sure you have to submit to a credit check or have additional deposits to get a free account.
While these bad checking accounts are probably less expensive overall, it's more difficult to judge the costs, especially for financially unsophisticated customers. One big fat fee from the payday lenders probably seems smaller than N smaller fees where N is unpredictable.
While you and I may be financially educated and well versed, many people are not. The only reason credit card companies make money is because there are people who don't understand how credit card companies work and make only minimum payments.
Not to mention there are cultural and demographical biases against banks and credit cards. When I was in China I knew many people who did not trust banks. They either did not want how much banks/government to really know how much money they had or weren't sure their interests would be looked after if something were to happen.
really? Your sure about that? You try it. Put yourself in a life where you have no bank account, no or bad credit, and try to take the check you just received from "low income job x" and try to find a retail branch of the bank it was written against. If you're real lucky, there is a retail branch near you. When you go in, you will be presented with process barriers the bank uses to keep you from cashing the check. Are these barriers legal? Doesn't matter. You still will be sent out the door without your money...and then you go back to the loan sharks.
"Are these barriers legal? Doesn't matter. You still will be sent out the door without your money...and then you go back to the loan sharks."
Wait, you're now arguing that the "loan sharks" are useful and helpful, after denigrating them elsethread?
In any case, I agree that you can cash a check at the bank it is drawn on, and that it can be difficult. Because my newly opened account had an eight day clearing time, I needed to cash my checks and trot over to my bank to deposit cash quite a bit last year (small employer had no direct deposit). It was comical what lengths they went to to try to avoid giving me cash.
"Are you a customer with us? [No.] Oh, I'm sorry." (But I didn't go away).
"Oh, you'll need two IDs." (Okay, here you go).
"Oh, we don't have that much money on hand." (It wasn't very much, especially for a bank).
"Oh, I'll have to get my manager." (in a vaguely threatening-maybe-you-should-just-leave manner).
"If you open an account with us, we can cash this." (But of course they could even if I didn't).
"We can't give out that much cash. Can you come back tomorrow?" (No).
"I guess we could do a cashier's check for half of that [said doubtfully]. Would you like to open an account with the remainder?"
Etc. The first few times, I was polite and firm, and eventually they recognized me when I came in and I didn't get any hassle. But lots of people wouldn't know that "We can't" doesn't mean they can't.
"Wait, you're now arguing that the "loan sharks" are useful and helpful, after denigrating them elsethread?"
They are only useful and helpful in the absence of forcing banks to act like decent members of society. Fix that problem (which is very easy if you focus on corruption between corporations and elected officials) and you remove the need for the loan sharks.
It is sad a state of affairs that someone can receive a check and cannot cash it at no cost (not just put it into another account). There is no basis for requiring credit to receive money from an account that clearly has the funds. Between the banks and now payday companies, this state will persist until we get state politicians that aren't corrupt.
Note: this goes for most states, not just the lovely one Chicago is in.
