Sunday, January 28, 2018

How banks support payday lenders and check cashing services by dissing their low income customers

Here's a story from the WSJ that I found disturbing (and which helps explain why many people choose to be "unbanked" and to patronize high-priced non-bank financial services):

Bank of America: No More Free Checking for Customers With Low Balances
eBanking customers switched into accounts that typically require direct deposit or a minimum balance to avoid $12 monthly fee

"Bank of America Corp. has eliminated a free checking account popular with some lower-income customers, requiring them to keep more money at the bank to avoid a monthly fee.

"This month, all remaining eBanking customers with the Charlotte, N.C., lender were switched into accounts that charge a $12 monthly fee unless the customer has a direct deposit of $250 or more or a minimum daily balance of $1,500. Some eBanking customers were switched over as early as 2015.

"Banks have long grappled with how to charge customers for basic checking services. The accounts are costly for banks to maintain, though they do bring in revenue through overdraft and other fees."

Some previous posts about the other part of this market:

Friday, November 3, 2017

Thursday, January 22, 2015

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