Enforced Bank Accounts
Sacramento's mayor wants to pass an initiative to help poor people get bank accounts. It's apparently part of a state-wide push.
By opening checking or savings accounts, the mayor said, residents can save hundreds of dollars they might be spending by cashing checks at payday loan centers.
"At the end of the day, people will be able to keep more of their paycheck at a time when money and resources are scarce," the mayor said.
Campaign promotes bank accounts for city residents - Sacramento City News - sacbee.com
Now, I am pretty leftist in my approach to politics. Even though I don't consider myself a Democrat, I certainly don't support the Republicans and think Libertarians are somewhat harmful. But I think this is a dumb idea.
Not so much for monetary reasons, but because it seems like a maneuver to prop up banking. If these people thought about why some people don't have bank accounts, or heaven forbid actually asked them why, they'd realize that there are good reasons why they don't bank. Some are just hiding their income from someone: maybe the government, maybe an ex-spouse. But most of them have very marginal incomes. To maintain a bank account, you need to keep a minimum balance; furthermore, most banks charge monthly fees, and many of those that don't will at least charge a fee if you drop below your minimum balance. Poor people usually don't have money to spare, so spending an immediate fee at a check cashing company may be onerous, but not as onerous as the fees and the effectively frozen assets represented by that minimum balance.
Besides, a lot of those poor people may have bank accounts, but they're in negative balance. Depositing your paycheck just eats up part of your money. And furthermore, those accounts keep getting more negative as a result of penalties. You can't even close the account until you pay the current negative balance.
When will politicians learn (or admit) that banks rip poor people off?
P.S.: No, this isn't a Rabbit-Hole Day post. Yet another year I have no offering for Lewis Carroll's birthday.
By opening checking or savings accounts, the mayor said, residents can save hundreds of dollars they might be spending by cashing checks at payday loan centers.
"At the end of the day, people will be able to keep more of their paycheck at a time when money and resources are scarce," the mayor said.
Campaign promotes bank accounts for city residents - Sacramento City News - sacbee.com
Now, I am pretty leftist in my approach to politics. Even though I don't consider myself a Democrat, I certainly don't support the Republicans and think Libertarians are somewhat harmful. But I think this is a dumb idea.
Not so much for monetary reasons, but because it seems like a maneuver to prop up banking. If these people thought about why some people don't have bank accounts, or heaven forbid actually asked them why, they'd realize that there are good reasons why they don't bank. Some are just hiding their income from someone: maybe the government, maybe an ex-spouse. But most of them have very marginal incomes. To maintain a bank account, you need to keep a minimum balance; furthermore, most banks charge monthly fees, and many of those that don't will at least charge a fee if you drop below your minimum balance. Poor people usually don't have money to spare, so spending an immediate fee at a check cashing company may be onerous, but not as onerous as the fees and the effectively frozen assets represented by that minimum balance.
Besides, a lot of those poor people may have bank accounts, but they're in negative balance. Depositing your paycheck just eats up part of your money. And furthermore, those accounts keep getting more negative as a result of penalties. You can't even close the account until you pay the current negative balance.
When will politicians learn (or admit) that banks rip poor people off?
P.S.: No, this isn't a Rabbit-Hole Day post. Yet another year I have no offering for Lewis Carroll's birthday.