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I once ran out of cash when driving across the country with my family, because the bank froze my account 2 days after supposedly clearing a check and telling me I had access to my funds. My bank told me it might take up to two weeks to get access to my funds. I would have been much better going to a check cashing place, because of their clarity and transparency. I almost ended up having to sleep with my kids in the car, or in a park somewhere, but we managed to find a pawn shop that was open 24 hours. We paid around $60 to borrow $1000 for two weeks, which is a high rate compared to a regular bank loan if you can get one. But it was the difference between my kids sleeping in a hotel and being homeless. People who want to shut down these kind of services have good intentions, but the effect of their paternalism would be to reduce choice for poor people, and make their lives worse.

Credit cards seem tailor-made for this case, because they give you four weeks or so interest free and then start with the usurious rates.

The evidence shows that situations like yours are not how payday check cashing businesses are usually used. Often people get into a revolving door of debt. Sure, there are situations where they can be used for good. Generally however, they are not. Rather than accepting, and let's call them what they generally are, predatory check cashing loans, for the VERY limited good that they do, why not work on improving the clearing house system so that your check can get through a real bank in a reasonable amount of time?

How does removing options for people make them better off?

Hard drugs, drunk driving, driving without seat belts are not legal options that make people better off. Buying food below certain levels of quality for cheap is not an option.

By removing bad options. Like cars without seatbelts, or toys with lead in them.

The trouble with removing "bad" options is when you leave no other options.

That makes no sense. We're not talking about lesser options that are slightly off the norm. These are bad options that are clearly outliers.

What do you suggest are other options than check-cashing stores?

An actual bank?

> revolving door of debt

A lot of this debt is replacement for missing income. Given the increasing gap[1] between income and productivity as debt substitutes for income, is a "revolving door of debt" or "debt instead of savings is the new normal"?

Yes, predatory loan sharks should be harshly regulated and obviously improvements should be made to checking and other financial systems. I'm only suggesting that we also need to address the larger causes, or we're leaving half the problem unfixed. As long as income continues to drop relative to productivity, there will always be opportunists trying to "help" with predatory terms.

[1] https://upload.wikimedia.org/wikipedia/commons/e/ef/Producti...

The increase in economic inequality (and effects in that same realm) a very huge issue, I agree. I just thought it was a little out of the scope for this thread.

~400% interest rates on payday loans

If you count fees as "interest", banks charge 400%+ interest rates on overdrafts, too.

So why do people continue to use bad actors like Chase Bank. How many examples do we need of the way they bleed fees and penalties from people who can least afford it.

There are local banks and credit unions that have much better deals.

Switching banks is a PITA. I maintain typical accounts at >5 banks, most of them are well-known national brand name banks though a couple are smaller regional/local banks.

I've long intended to close down several of them -- especially one of the oldest ones, which hasn't had a branch in my resident state for roughly 10 years now -- but I then realize it's a low value proposition. I've got some small ACH or card-based auto-pay stuff on it that I'd have to track down and move, and all that. Not to mention the 'fear' I have that I'll be traveling and get locked out, so may as well have other options.

I realize it's probably not as bad as I think, but frankly I'd almost just rather just keep my "doors open" so to speak, even if it is a small money drain.

BTW -- I very recently paid $10 for a Cashier's check at a national brand bank, wasn't thrilled about it, but paid it. That said, their online presence/capabilities make up for it (especially vs many regional/small banks).

I just wish SVB did personal accounts. They rock.

In the UK, we have a service called the Account Switching Service - which redirects all your incoming and outgoing payments for you, with a guarantee that it's done properly. Shame the US goes for lock-in.

> In the UK, we have a service called the Account Switching Service

Please tell me that people unhappy with this call it a pain in the ASS.

A few years ago, Britain made rules that forced the banks to make it easy to switch accounts. This was to improve competition between banks, and hence improve service and prices for customers.

I used it. It required closing the old account, but everything was done automatically: bill payments transferred over to the new account, the remaining balance, pending cheques, and any incoming electronic transfers for the next 13 months. They also sent some kind of electronic message to my employer, updating my bank account details on their system.

https://www.gov.uk/government/news/2-million-switches-in-2-y...

> There are local banks and credit unions that have much better deals.

So much this. I have had an account at a local bank for most of my life, and it has always had no minimum balance and no fees. Better still, when I call customer service, I talk to a real person from the same community as my bank, not a machine or an underpaid Indian in a call center. Sure, $LOCAL_BANK doesn't have ATMs on every corner, and ATM fees are obscene, but you can always get cash with no fees at a big grocery store.

I can't think of a good reason to have a personal account at a giant bank.

> I can't think of a good reason to have a personal account at a giant bank.

Better online banking and mobile apps, and two-factor auth, are advantages of big banks with large IT budgets.

> or example at Chase Bank, if a poor person lets the balance drop below $500, they will be charged $30.

How on earth is that legal? I understand that there are overdraft fees or that the banks want interest on the debt if your account goes negative, and that's fine when those fees are not predatory.

But fining people for having too low positive cash balance?! That's theft.

>But fining people for having too low positive cash balance?! That's theft.

I just used casual shorthand when I wrote "charged $30".

The way the bank's Terms of Agreement spells it out is that every account has a monthly service fee -- e.g. $30. However, if you maintain a minimum balance above $500, they will waive that fee. (Many in the HN demographic would have a higher tier account such as "Premiere/Preferred/Platinum" and those also have minimum balances of $20000 required to waive the monthly service fees. It's still the same idea, but a bigger number.)

The banks word it in positive terms ("above/waive"). I just wrote it the opposite way ("below/charge") to match how people psychologically perceive it. For many people seeing the minus-$30 deducted from their account, it certainly feels like a penalty/fine instead of a +$30 bonus for all the other months that they were above $500.

Whoa, that's still theft, even if you explain it this way. My bank (Sparkasse), for example, charges 8€ a month and that's already perceived as "near to extortion" - and the increase to 8€ actually led to massive public outrage. Many "direct banks" (i.e. banks without physical offices, services via ATMs and Internet only) are entirely free here.