Author Topic: The Unbanking of America: How the New Middle Class Survives  (Read 1296 times)

frugalparagon

  • Magnum Stache
  • ******
  • Posts: 2550
    • The Frugal Paragon
The Unbanking of America: How the New Middle Class Survives
« on: February 03, 2017, 04:13:25 PM »
Anyone else read this one? I thought this was super interesting. It's about the use of check cashers and payday lenders by people who are loosely "middle class."

It's easy to think that they should be using banks, but their increasing use of fees makes that more complicated. People use alternative services because they find them to be a better value and get the services they need (like your money today, not in five days when the check hold clears).

She goes on to describe attempts to give people what they need at lower cost--innovative companies working on things like alternate credit scores and faster check cashing--things that big banks aren't really interested in.

I thought it was thought-provoking. Sure, people should plan ahead, but to some extent, being able to do so comes from privilege.

What do you guys think?
I blog about Mustachianism during the child-raising years at frugalparagon.com.


marty998

  • Magnum Stache
  • ******
  • Posts: 4438
  • Location: Sydney, Oz
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #2 on: February 03, 2017, 05:57:17 PM »
This is why it is so important to take liquidity when you don't need it (e.g. apply for a higher credit limit on a credit card when you have the means).

Because when the world turns as it so often does, the exact moment you need credit you won't be able to go to a bank to get it.

Is there link that I can't see?

This is the book club forum. I don't think she can send the pages through a screen :)

BNgarden

  • 5 O'Clock Shadow
  • *
  • Posts: 83
  • Location: Alberta
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #3 on: February 03, 2017, 06:56:09 PM »
There is apparently often a mismatch between when the income is available and when the expenses hit.  For many this would favour instant services.  Researchers in this area are looking into what services are useful under these conditions (per what you said).

See this fabulous series of research:
https://ssir.org/the_hidden_lives_of_americas_poor_and_middle_class

The last link is the piece I saw first, in a webinar:
https://ssir.org/the_hidden_lives_of_americas_poor_and_middle_class/entry/the_hidden_lives_of_americas_poor_and_middle_class

DailyGrindFree

  • Stubble
  • **
  • Posts: 176
    • Daily Grind Free
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #4 on: February 04, 2017, 10:05:56 AM »

Is there link that I can't see?

This is the book club forum. I don't think she can send the pages through a screen :)

Da! :-) My bad. It was a rough day at work. :-)

MStangRacer

  • 5 O'Clock Shadow
  • *
  • Posts: 9
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #5 on: March 25, 2017, 11:25:21 AM »
Sure, people should plan ahead, but to some extent, being able to do so comes from privilege.

I don't agree, being able to plan ahead takes forethought and sacrifice, not privilege (though privilege would mitigate the sacrifice).

TheBuddha

  • Stubble
  • **
  • Posts: 232
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #6 on: March 25, 2017, 11:40:02 AM »
I felt a little "unbanked" recently when I was denied an account at Ally bank. I jumped through all the hoops: lifted my credit freeze so they could check it (for a savings account? really?), emailed them my driver's license. But the address on my DL is my P.O. box. Well they wanted a physical address, wanted me to send a photo of a utility bill. Which I can't do, because I don't have a physical address, I'm technically homeless*. It was frustrating. I didn't know homeless people were prohibited from having bank accounts.


*I'm a truck driver, I work all the time and live on the road in my truck. I save a lot of money this way. I do have bank/investment accounts that I opened back when I had a physical address. 
Debt-free as of 9/11/15. Paid off $50k in 3.5 years.




jooniFLORisploo

  • Handlebar Stache
  • *****
  • Posts: 2244
  • Location: somewhere over the rainbow
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #7 on: March 25, 2017, 05:51:11 PM »
TheBuddha, I hear ya! My bank did a google street view of my contact address and declared it insufficient for investing with. Aggravating process. What do all the homeless people do? Yep, get credit while you can and a fake, stable, residential address while you can. Hang on to them; they're critical in the current system.

Trudie

  • Handlebar Stache
  • *****
  • Posts: 1316
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #8 on: April 05, 2017, 02:44:33 PM »
I just watched an interview with the author on Book TV (C-Span).  It looks like an interesting read.  Many politicians have demonized pay day lenders, but she touches on the ways in which banks really fee people to death.  (She isn't arguing for pay day lenders to be UN-regulated, either...)

marty998

  • Magnum Stache
  • ******
  • Posts: 4438
  • Location: Sydney, Oz
Re: The Unbanking of America: How the New Middle Class Survives
« Reply #9 on: April 05, 2017, 03:21:22 PM »
I felt a little "unbanked" recently when I was denied an account at Ally bank. I jumped through all the hoops: lifted my credit freeze so they could check it (for a savings account? really?), emailed them my driver's license. But the address on my DL is my P.O. box. Well they wanted a physical address, wanted me to send a photo of a utility bill. Which I can't do, because I don't have a physical address, I'm technically homeless*. It was frustrating. I didn't know homeless people were prohibited from having bank accounts.


*I'm a truck driver, I work all the time and live on the road in my truck. I save a lot of money this way. I do have bank/investment accounts that I opened back when I had a physical address.

Believe there's a checklist a bank has to go through for anti-money laundering compliance. Once of those is checking the address of the individual (or registered office of the Company).