The branch banking model | Hacker News Reader

The branch banking model

bam.kalzumeus.com

107 pointssmitop128 comments

The author could not be more wrong.

Branches exist to handle and process A) cash demands, B) check and other non-specie instruments, and C) paper for commercial clients. If they’re a community or specialty bank, branches also exist to serve the particular, unusual needs of their community,—usually business needs. These special needs often include unusual skills such as assessing the quality of a crop or meeting with specialized experts.

That branches happen to also offer convenience to consumers is a happy accident, mostly, and it’s happier in that businesspeople are themselves consumers and often select their business bank based on where they personally bank. Branches are JUSTIFIED regulatorily by their public benefit which centers, in most cases, around consumer and SMB (which is to say, prosumer) access. But like many things, the regulatory rationale and the real purpose do not fully correspond. I’m sure you’re as shocked as I.

If branches were about sourcing consumer deposits, they would be uninsurable properties, because banks would burn their branches to the ground. Rest assured.

Source: I run banks.

The Author has a broad reputation around here for knowing what he is talking about, so I think 'I run banks' might need more context if you really want this to be an appeal to authority argument, especially as your HN bio doesn't support the claim that you run banks and 'running banks' isn't really a role

Well, to be fair, The Author has a broad reputation for authoritatively saying things about banking and is a HN celebrity, which does not necessarily mean he works at a bank or knows one from the inside.

I read the article, and the described model does not apply at all to countries with modern banking, e.g. for example Poland, which I know well. And this sentence: "The dominant engine for profitability of deposit accounts is net interest margin" is decidedly untrue here. Today, banks here do not want your money. What they seem to want (but I do not know this from the inside, just from observations) is a long-term relationship, so that they can sell "products" that involve fees (visible or hidden): cards, investment products from third parties, etc. Also, most modern banks have no tellers anymore here.

That is fair and an actual argument with your opinion and some evidence while to me the parent was more 'Author is wrong, opposite is true, and I have more authority'

Appeal to authority is usually annoying but I just meant that if you do it you should appeal to a higher authority which I didnt really recognise in this case.

Regardless of the author's reputation, the point does stand that branches often cater to specific needs of the locality.

For e.g. bank branches in rural areas in India often understand rural needs and work with local government administration to offer special loans that have no place in cities (like loans for water pumps, seasonal loans to fund the transport of produce to central market places, etc). In a small city that I worked in, bank branches were aware that they would get lots of account holders visiting during "lunch time" at factories. Various factories ended up collaborating with the bank branches to have different lunch times so as to reduce the load of visitors at the branch. In Industrial locations within that same city, branches unofficially specialize in small loans to help suppliers tide over payment cycles of the large customers.

In another distant suburb of Mumbai that I lived in for many years, the local bank and its branches within that suburb had higher credibility than even nationalised banks! The Bank officers would be invited to attend local industrial meetings, township planning discussions, merchant meetings, etc. They learn from the meetings, arrange for special loan and financial packages. There are business communities where reputation is everything. Such business persons sometimes do visit a branch and ensure that certain cheques by clients get honoured while they present cash or hand over their business documents for hypothecation. In many suburbs and rural areas, bank branches provide a "daily deposit" collection service where a branch officer visits various businesses in the evening to collect cash for deposit into the current account. These are not part of the banks' official services, but are arrangements and accomodations made at local levels.

As an erstwhile small business owner, I had learned at a very young age of the importance of having a great working relationship with the local branch officers (tellers, other officers, the branch manager). We would invite them to events at our business, and they would attend, too.

My examples are all from specific regions in India that I have stayed in, but I do think that other parts of India as well as in the world (including in the US) would have specialised needs that an "online" presence would not adequately cater to.

Originally they existed because nothing was computerised.

You went to your bank (and it was just that one physical bank) because that's where the definitive paper record of how much of the money in the bank was yours was kept. You also had a bank book, your copy of that record. Every time you went to a teller for a deposit or a withdrawal the teller would go to the bank's file storage, remove your record and update it, and your bank book to match the transaction, then return the record to the file storage.

If you moved town, or across town you applied to the bank to have your records moved.

Your checks (if you live in a country that still uses them) had your branch number on them, banks would reconcile checks using that info so they could update those all important file folders.

Keep in mind that in large parts of the US, branches used to be banned. Every bank was only allowed a single office in one single city.

If you moved town, you had to find a new bank. Not just a new branch.

Obviously, that was a recipe for fragile banks, and thus frequent banking crises.

How do the three things you listed make money for the bank? I thought withdrawing cash (maybe by (A) you mean originating loans?) and handling checks are offered at no charge by most banks as a loss-leader/because of regulations. I don’t really know what your (C) is.

Perhaps another thing is maybe the OP is mostly talking about massive banks in the United States with many branches and you’re talking about smaller credit unions or community banks which make money in different ways? That might explain why you might both talk about ‘banks’ while both being right and yet talking about totally different businesses.

> Source: I run banks.

Great job title, I guess. Could you tell us a bit more about your job / occupation?

Both, parent and author, are right ( in a qualified way ). The issue that I have with it is that the article attempts to generalize a little too much. There is definitely a business model built around selling ( opening accounts ) for retail customers and it is sufficiently common for a lot of locations in US, but it hardly the only one. Not to search very far, Chicago banking market is extra weird and congested so it requires some banks to specialize, which results in some boutique banks, which focus on markets other than pure retail.

Both you and the author, while correct about many details, are completely wrong about the business model and economics of retail branch banking.

To be precise you are off by 100x or two orders of magnitude on the profitability of depositors to the branch. What you both missed is the biggest open secret in banking - the fractional reserve model.

Fractional reserve references the fact that banks don’t merely loan out depositor funds at a 3-5% spread. Instead they are required to keep at most 3% of depositor funds on—hand while they loan out the other 97% at a very profitable spread between interest charged on loans and interest paid to depositors.

For this reason every $1000 taken in by a branch allows them to make on average $97,000 in new loans. They pay the depositor 1% in interest on the $1000 deposit while charging 4-7% interest on approximately $97,000 in loans for a rough profit of almost $3,000-$6,000 for every $1000 deposited. Where does the $97,000 come from? It comes in the form of bank credit - literally numbers added in the bank’s computer.

This is one of the mechanisms of money creation. The other being sourced by the Federal Reserve when they purchase securities on the open market with money they create out of thin air. This is also what causes inflation, despite what politicians wish you to believe.

Banks do not operate as non-profits. They wouldn’t operate retail branches unless the economics warrant it, which they very much do.

That’s not actually how real banks work though - “fractional reserve” is only an economic textbook model.

Most countries don’t, and have never had reserve requirements. The limits to lending are firstly capital (share capital, retained earnings etc.), which banking regulations allow banks to lever up to a certain level, and secondarily liquidity, which they need to be able to pay out withdrawals, transfers etc. Deposits don’t come into it apart from that they are a certain kind of cheap liquidity for inter-bank transfers.

Deposits themselves are a liability of the bank, and since lending creates new deposits on the balance sheet, “lending from deposits” would create more liabilities from existing liabilities, which doesn’t really work with the accounting.

I’ll admit my Google Foo is currently failing me but when last I checked fractional reserve requirements were a very real requirement up until the last couple of years.

Do you have a source to support your claim that they only apply in economic textbook theory and not in reality.

Could you perhaps help explain, ideally with a numerical example, how it currently works in practice?

A great resource is from the Bank of England (UK central bank) themselves: https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m... (click through to the main PDF).

Key quote:

> "Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits."

Here's a rundown of what it means by economist Steve Keen who specialises in this kind of stuff: https://www.quora.com/What-is-fractional-reserve-lending/ans...

As Keen explains from accounting first principles, fractional reserve could work if banks gave out loans in cash, but not how modern banks work today.

What I'm referring to about capital is formalised in the Basel III regulations - see https://en.wikipedia.org/wiki/Basel_III - since we've established that banks don't lend out of deposits, they actually have to cover any delinquent loans from their tier-1 capital (shareholder's equity) - that's what they're leveraging when they lend, not deposits. I can attest to this myself - I've never heard of any bank saying "oh sorry, we couldn't make any more loans because we needed to wait for some more people to make deposits", but as a bank shareholder I have more than once had a letter saying "we need to raise more capital through a new share offering tranche or else our lending projections show we may not be able to meet our capital adequacy ratios" (especially around the time when things were transitioning from Basel II to Basel III because the ratios increased).

> I’ll admit my Google Foo is currently failing me [...]

See https://en.wikipedia.org/wiki/Reserve_requirement#Countries_...

> [...] reserve requirements were a very real requirement up until the last couple of years.

Mostly only in the US.

The whole Wikipedia entry is worth a look.

If you want to read more than you ever wanted to know, check out the works of George Selgin.

Notably all other countries have a similar fractional reserve banking model even if the details may vary. Specifically, the money loaned out by the bank is created out of thin air in the form of bank credit and does not come out of any account. The banks in every country have no cost of goods for the money they lend out. They are authorized by government charter to create this money out of thin air. This is true whether they have reserve requirements or not.

I am afraid you are misunderstanding the situation.

First, government authorisation is irrelevant. Shadow banking has the same effects. See https://en.wikipedia.org/wiki/Shadow_banking_system And so do grey or black market operations. Or offshore banks (that don't fall under the local government's authorisation.)

Second, even in the absence of any minimum legal reserve requirements, why do banks need reserves at all? Among other uses, banks need reserves for two main reasons:

* Cash withdrawals

* Net settling of money transfers with other banks

Now you are right that a bank can in principle create a loan/deposit pair out of thin air: they just adjust their ledger that you have now have 100$ dollars in your current account, but also that you owe them a 100$. Voila: money from nothing.

Now here's the problem: debtors are seldom content to let the loaned funds gather dust in their accounts. Typically, they spend them. Either by withdrawing cash or by transferring the money to some other person's account.

Chances are that the other person's account is with a different bank.

Both the withdrawal and the transfer diminish the reserves of our bank.

(On the flip side: both cash deposits and your customers receiving a money transfer into their account, increases your bank's reserves.)

In summary: yes, in the instant of creation, loans create money out of thin air. But as soon as the debtor spends the loaned funds, reserves (and thus deposits) are required.

And that's why even in the absence of legal reserve requirements, banks have to attract deposits.

Does this make sense?

How does your model explain that reserve requirements are now 0%? Why haven’t the banks created infinite money?

The loanable funds model that you describe is no longer accurate (though it is still taught by courses using outdated textbooks, e.g. the classic “Macroeconomics” by Mankiw. Newer textbooks, e.g. Core Econ do not teach the loanable funds model. It is incompatible with empirical data.

[1] https://www.federalreserve.gov/monetarypolicy/reservereq.htm

I simplified for the sake of the audience since it does, I’m sure you would agree, seem absurd that the current reserve requirements are near 0% which only makes my argument stronger. Technically, though the reserve requirements are still >0%. There are limits as exhibited by other required ratios that must still be preserved. But effectively with near 0% reserve, the benefits of holding deposits are only amplified.[0]

[0] https://en.wikipedia.org/wiki/Fractional-reserve_banking

I’m mainly arguing against the idea that banks take in money as deposits and lend out that same money as loans. In modern economies, this is not actually how it works (Though it used to be true! Just not anymore.)

“Money creation in practice differs from some popular misconceptions — banks do not act simply as intermediaries, lending out deposits that savers place with them, and nor do they ‘multiply up’ central bank money to create new loans and deposits”

I highly recommend reading the whole paper from The Bank of England, it shows that much of what is taught in outdated macro textbooks is wrong.

[0] https://www.bankofengland.co.uk/quarterly-bulletin/2014/q1/m...

This article has always bugged me because I get hung up here:

> When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage.

That's certainly not how it worked for me in the US. My bank account went down dramatically in the process of buying a house because I had to wire the down payment to an escrow company, and the bank gave either the escrow company or seller the rest of the funds (I assume, I had no visibility into the process. But at no point did me-as-borrower get an increase in my deposits!

Is that super meaningful? I wouldn't think so, except for that if the seller wants cash, or wants to deposit that money in a different bank (or puts it into the stock market, or whatever) then it requires my lending bank to have something other than just numbers in their own internal database - they have to convince that other institution that they're good for the money they just lent out. And that's the part where I'd assume consumer deposits would come back into play - unless the banks have another source of currency on hand.

Think of a car loan, then, in which case the bank can just increment the number in your deposit account (until you spend it on a car).

The bit of information your second paragraph alludes to is the fact that all banks have accounts at the Federal Reserve. The Fed has the single database that the banks use to clear with each other. And the Fed and other regularity agencies audit the banks to make sure their internal databases are consistent, their loans are backed by assets of sufficient quality, etc.

This video by an economics professor is accessible to all and explains this to a certain extent in general. https://m.youtube.com/watch?v=4xgHbW2A9KE

Something to note is that in the US (and most modern economies), the federal government creates a 1:1 exchange rate between private bank money (e.g. money created through loans) and central bank money (numbers in the Fed database and physical cash) via deposit insurance (e.g. FDIC in the US).

Sure, though it's rare that you'd borrow money without intending it to leave the bank (cases like paying off higher-interest stuff with lower-interest borrowing aside), but that aside, yeah, all the bits about how the banks have to have their accounts reconciled with the Fed and backing assets and all is really the core of my disagreement with the "banks can basically just print money infinitely" claims. Which I've sometimes seen people cite that BoE article as support of leaning on that "they just add a number in their computer when you take out a loan" bit. If it were that simple, I'd love to just make myself a bank and print myself some money, after all. ;)

My understanding is also that these discussions of "money" ignore things like investments or non-liquid assets, which I think is another big source of fuzziness. E.g. borrowing against other assets, including stock, that might have appreciated incredibly rapidly which gives you more purchasing power (the ability to "spend more money") without requiring anyone else to actually have given you money for anything specific.

See the part of my comment about the Fed and other entities regulating that the bank has claims on assets of sufficient quality. So the banks can’t just totally create loans willy nilly. They liabilities must be matched by assets of sufficient quality.

This does not preclude, however, asset bubbles as we saw in Japan in 1991 and globally in 2008. The banks create loans which drives up the price of assets. Those assets, now appearing to be worth more, enable the banks to create bigger loans, because hey, the asset is worth more! This is a positive feedback loop and a major failure mode of this system. Regulation tries to tamp it down but does not always succeed.

> My understanding is also that these discussions of "money" ignore things like investments or non-liquid assets, which I think is another big source of fuzziness.

It definitely is. When central banks think of the money supply, they take into account different aggregate which are sorted by liquidity.

There’s no reason (other than cost and your current wealth and bank risk management) why you couldn’t get a personal loan for the full purchase price of the house, and pay the seller the cash price. You’d then see your bank account balance go up by the house’s cost, withdraw the cash and then pay the seller.

I’m not sure what bank would give a normal person that kind of money unsecured but you could secure it with e.g. another house you own. Most people don’t have a spare house, so the banks optimise the process for the everyday scenario where the buyer doesn’t need to see their bank balance go up. But money is still being created in there somewhere

> I’m mainly arguing against the idea that banks take in money as deposits and lend out that same money as loans.

We are in full agreement on this point. Banks never lend out even a fraction of depositor funds. Instead, they have been given a monopoly right by the government to create bank credit as a money equivalent out of thin air.

If you or I did this it would be considered fraud but when banks do it, it is legal.

> How does your model explain that reserve requirements are now 0%?

> Why haven’t the banks created infinite money?

Reserve requirements are not the only constraint limiting bank’s ability to lend. The banks are also limited by the number of qualified borrowers who are seeking a loan. Qualified borrowers must have sufficient collatoral and/or income coverage to service the loan as well as a need to borrow funds. Banks can’t sell more loans than qualified borrowers are buying.

You’re claiming banks make 5k in profit for every 1k in deposits. Chase has 2.3 trillion in deposits. Why don’t they have 10+ trillion in annual profits?

Chase is limited in that they can only lend to well-qualified borrowers who wish to borrow from Chase on terms Chase deems sufficiently profitable.

In other words they are limited by the demand for loans by well-qualified borrowers. Well qualified is defined as borrowers with sufficient collatoral, income/debt, and credit history.

I think you're making a different point than the original article. Yes, retail banks operate in an economically profitable way. But that's not to say that branches are required. There are retail banks without any branches. They can still do all the lending you mention. The author is attempting to answer the question of why those haven't put the ones that spend money on branches out of business. He also alludes at a followup around "semi-public infrastructure deployed as commercial real estate projects which are funded by private capital."

However: "Instead they are required to keep at most 3% of depositor funds on—hand while they loan out the other 97% at a very profitable spread between interest charged on loans and interest paid to depositors."

So if you bring in $1000 a 3% requirement means $30, and you can lend $970. Where do you get $97,000? Say the bank wants to loan money to home purchasers. "Numbers added in a bank computer" aren't gonna pay the bills for the people on the other side of those home purchases who are going to want cash or money in their own bank, not just yours.

Are you assuming a recursive process? Lend $970, have it redeposited by the person the borrower pays, lend out another $940, etc? But that only works if the money keeps getting redeposited at which point it's not entirely fair to characterize that as the "original" deposit only, and my understanding is that that's the (somewhat hypothetical) "money multiplier" which I've always seen as 1/r which would be 33x for 3% not 97x anyway. And in practice, that doesn't get reached.

No one goes to a physical bank anymore, right?

Wrong. If you happen to get to a branch at 8:55 am to use the ATM (assuming they open at 9:00), you'll see a line of people waiting to get in. Are they all just old people who don't know any better? A quick inspection will show that they're not.

One reason I've gone to one was to get a bunch of $100 bills to pay for my puppy at a breeder. For some reason, breeders tend to insist on cash. I suppose there are less legal reasons to want $100's, but I wouldn't know about those :)

Continuing with "choice of denomination": if you operated a retail business, or you were having a garage sale and you wanted a whole lot of variously sized bills to make change, you might go to the bank.

Turning in coins? Lots of stores have coin machines, but they take a commission out if you want cash and not store credit.

Perfectly valid arguments for installing a modern, 4-cassete Diebold atm with a cash recycler and, optionally, a coin hopper. Such a device costs about $40K and is much cheaper to operate than a branch.

Branches exist because all other channels suck. Why would you go stand in a queue if you could request $100 banknotes from an ATM? Who would need to discuss mortgage in person if there was a sane, simple, transparent web page for it? Who would need to go to a branch to complain and get a problem resolved if they could do so from their phone?

Every visit to a branch is a negative KPI in modern banks in modern countries since early 00'es.

When I used Wells Fargo, they wanted me to go into the bank building to get quarters for laundry so they could run that fake account opening scam on me. Similarly when I tried depositing coins; they had a teller hand count them to take longer so the manager could try and sell me things.

I think this might support the article's point.

> Who would need to go to a branch to complain and get a problem resolved if they could do so from their phone?

Sometimes the problem happens at the level of phone and it is much easier to have it sorted in person instead of being stuck on helpline. I had some issues with my local bank's app and they knew what to do at the branch.

If not using the app and physically going somewhere is easier than using the app then the app clearly has some room for improvement.

In this case, the problem was with installation of the app itself - once sorted, it worked well.

I consider me needing to go into a physical branch if I want to transfer tens of thousands or more a feature, not an issue.

May be an indication that web and mobile channels of your bank are not very good. You perceive it is safer (or easier) to go to a branch and get a funds transfer performed by a random semi-literate clerk, than using an app.

Banking apps are often confusing, dumb (can't predict/detect/anticipate) and struggle to authenticate a user securely, have low transaction limits, so clients resort to going into a branch, getting authenticated via a piece of colourful plastic by a random clerk and requiring a manual labor to perform pretty simple operations such as funds transfer.

Well, now that you mentioned the subject, I think my bank has the only sane multi-factor authentication implementation I have seen on the wild. Including all the usual giant informatics specialized multinationals. And they have been doing it since something around 2005.

The threat surface of a physical office is just absurdly smaller than an internet service. And the recovery options completely outmatch anything virtual.

What bank do you use? I use capital one and have had good experiences so far

Banco do Brasil.

I'm not from the US.

Obviously the people who run banks don't see it your way. You notice that in those TV commercials about "banking reimagined" the guy is still standing in a building of some sort.

Who run banks in the US maybe. The rest of the world has largely moved on.

Another reason I suspect is that it's a lot easier to prove identity in-person.

Bank suspects you of fraud? Forgot your password and don't know how to reset it? Need to do or confirm a large transaction? Any half-decent banking app will require a lot of verification, because who knows if it's you or some hacker in a foreign country.

But if you show up to your bank's physical location and your face matches your ID, they'll let you do much more much easier. It's a lot harder for a fraudster to reasonably disguise as you or create a fake ID with your information, especially if they're from a foreign country and don't have a US passport.

Maybe not everywhere, but I can at least confirm with my local bank. Occasionally I get locked out of my account and I find they're smart and don't encode any information (Account ID, username, etc.) in any of the emails they've sent to me, so that in case someone steals my email they can't get access to my account. I also know it's harder to do large online transactions, like transfer money between bank accounts. But if I go to the physical branch, I can reset my password, deposit or withdraw cash, etc. and they are very kind and don't ask for much info.

Banks are also recording your interaction on camera and doing plenty with that data to verify your identity and in cases of fraud, prosecute the imposter. Look for the cameras behind the tellers some time.

There is also plenty you can do at a bank you either can't do on the phone (say, get a cashier's account), more likely to succeed that automatic (open a credit card with less than stellar credit), or is more complex than a robot or human following a script can follow.

I've had to go to a branch for two reasons and only two reasons in the last decade:

(1) To buy a house in cash, I need "proof of funds" so the seller of the house I'm making an offer on can be assured I can follow through with that offer. The "proof of funds" every realtor has told me to get is a letter from a bank branch, on bank letterhead, showing my current balance at that bank. Not just a printed out online statement.

(2) A big nasty red banner appeared on my online banking telling me that I needed to complete a "KYC Refresh" or my account might be closed! And that I had to do it in person, so call and make an appointment. Apparently it had been so long since I'd been in a branch or used my debit card, that they wanted to verify my identity and business registration in person. Unfortunately, this happened in 2020 when we had no idea how COVID spread nor any N95 masks to wear, so it was either risk my health or risk my business bank accounts. I went in.

That's strange. It's been a while so my memory may be faulty, but I don't recall having to go into a physical branch to do the proof of funds.

The one I know of that has to be done in person was a “medallion” thingy - basically the branch put their millions on the line to confirm I was who is said I was to Vanguard.

That's a medallion signature guarantee; it's like a notary public but done by a banker. You also have to get them for things like IRA transfers.

It doesn't actually have to be your own bank or anything; I've gotten one from a Chase branch because I had one of their credit cards. All that matters is it comes from a banker.

And my local bank couldn't actually do a medallion thing locally (no special signature person any longer)--and their central location couldn't either for some reason in spite of being verified locally. Ended up going to a not super-convenient brokerage office and the whole thing took 5 minutes.

Heh the one I got was at Chase for the same reason. My actual banks had no offices in the same timezone, let alone state.

Notarization, medallion stamps, safe deposit boxen, reliably getting larger amounts of cash in larger denominations, and getting cashier's checks promptly. I'm not saying these things make the bank money, but they're definitely reasons I maintain an account at a local brick and mortar bank. Also the old manager loved to drop into shop talk, like say about the economics of truck rolls to reload ATMs, which was fantastic. Alas, she retired and the new one seems to be a bog standard robot.

Last time I was there, there was an older woman next to me asking about a CD coming due. The teller was giving her a list of pathetic rates, and a slightly less bad special term of like 0.2%, while online rates are somewhere 2-3%. It was cringeworthy to listen to, but people that don't know any better are unfortunately their best customers.

Are breeders illegal around cupertino? I thought everyone was adopting rescue dogs and putting breeders out of business, adopt don't shop and all.

i know LOTS of pet families and the impression is based on them...but a few do have breeder bred dogs.

They're not illegal anywhere, AFAIK, and you can just go to a dog park, see all the pedigreed dogs, and talk to the owners to know that breeders are doing just fine.

There might be licensing rules, and a lot of the owners you'll talk to got their dogs from somewhere in the sticks, maybe for that reason.

Your username creeped me out because it’s my city and zip, haha. Had to do a double take

If you look on any of the pet websites for breeders, I don't know how many you find actually IN Cupertino. Mine was in Valley Springs (look it up).

Yeah not very many. We’re looking at getting either a Samoyed or a Bernese Mountain Dog, and finding good breeders is hard.

I love the gigantic dogs. Mine is "only" 85 pounds.

You probably know this, but there are "breed clubs" for most breeds.

There’s nothing wrong with “healthy” and responsible breeding; adopting is important for sure, but show dogs are still a thing, as are purebred dogs for first time dog owners, or those who are dedicated to a particular breed. It’s important to find a reputable breeder, though, rather than a puppy mill.

isn't genetic diversity a problem?

There are strategies for this: https://www.thekennelclub.org.uk/health-and-dog-care/health/...

Breeders are more prevalent than ever. Since Craigslist tightened the rules they're just harder to see.

In Vietnam, the largest bill is 500,000 dong or about $22 usd. It is always entertaining to be in a bank there when someone is buying a house. I've seen whole tables and suitcases filled with stacks of cash and multiple people with counting machines trying to make sense of it all.

Everyone uses US$ for large transactions, or they did when I was last there. Contacts specify payment on in dollars too.

It is illegal to use USD for transactions in VN.

https://www.loc.gov/item/global-legal-monitor/2015-11-03/vie...

http://www.apac-legal.com/c/the-use-of-foreign-currencies-in...

That said, it is Vietnam, so it does happen anyway... like at the gold dealers...

https://vietnamnet.vn/en/despite-a-ban-us-dollar-transaction...

Some contracts (especially foreigner housing rental and things like buying motorbikes) specify payment in USD but accept payment in VND, so that they can nail you on the conversion rate.

Side note, the link in your bio goes to some chinese spam site...

Modern US $100 notes have more anti-counterfeiting features than the other ones.

Wanting cash can be to lower costs and risks and admin headaches, especially if it's just a small side business. Cash can also be for tax avoidance.

People wanting a "global currency" -- you can stand down. We already have one. It's the US $100 bill [1].

[1] https://www.federalreserve.gov/paymentsystems/files/coin_109...

Annoys me to no end that in the USA we can't get money in denominations of $1,000, $10,000, or $100,000 as one could in the 1930s. Sure, it's to stop drug dealers. I'm not a fucking drug dealer.

What possible practical use would those bills have?

Even $100,000 in 100 dollar bills doesn't take up that much space.

https://qph.cf2.quoracdn.net/main-qimg-27735dcda82818fef15d7...

I like cash.

He wants to shift more costs onto the rest of society

Uh how?

Sounds easy to lose compared to the same amount in $100s.

I assume you stay safe and transact only in 1s?

I like to have a few $100s for traveling internationally--although in general it's hard to predict if they'll be accepted in the US. At some point, the US got incredibly conservative about changing currency denominations. It's also been my experience that the average bank branch doesn't keep a bunch of hundreds laying around--though I imagine a downtown branch is probably better.

>I like to have a few $100s for traveling internationally--although in general it's hard to predict if they'll be accepted in the US.

22 years ago upon coming to US with in particular several thousands in cash of new smelling $100s i was trying to pay $2 bus fare by pulling one of those fresh $100s from a small stack and trying to give it to the bus driver - the bus driver was actively refusing it - "no change", etc. - and i was perplexed to say the least and thought that the driver uses the "no change" excuse for some unclear to me reason "I don't understand, I mean this is US, the dollars are used here not something else, this is a good genuine bill, fresh from the bank, look it has sequential numbers with the others in the stack, how is it "no change" when even back in Russia i usually had no issues with change even from a $100 bill" :)

A lot of city buses won't give change period. It doesn't have much to do with it being a $100 bill other than that making it an especially terrible deal for you.

22 years later, even a lot of places that do give change won't accept a >$20 bill in the US.

Huh, I recently read a comic with almost exactly this scenario. It took place in Britain, though.

Actually in Europe back then i didn't have such issues, though that may be because i visited places frequented by tourists including Russians (and in 1990s in Russia dollar was de-facto currency for almost everything other than the grocery store)

Though even there I remember another interface mismatch situation - a group of Russians in our hotel wanted to rent some very expensive car, and the rent agency required a credit card where is the guys naturally had no cards, only cash in the amount almost sufficient to buy the car :)

In general through the 1990s the behavior of the post-USSR people, Russians in particular, coming to civilized West out of the woodwork of the post-Iron-Curtain chaos was in many situations comic-worthy.

One of the credit unions I use has predominately cashless branches. They've got ATMs, but the people can't do any work with cash. Kind of ugh, but they were open during 2020 when I needed a cashier's check, so there you go. I've only asked for a large number of bills twice, I had to do a currency order to get 100x $2s, but for 100x $5s, a non-cashless credit union near by had that in the vault, no advance notice required.

> One of the credit unions I use has predominately cashless branches.

That sounds a lot like Boeing Employees Credit Union and is one of the dozen or so reasons I can't understand why they are so popular around where I live.

I use Seattle Credit Union (formerly Seattle Metropolitan) and not only do they handle cash in branches, they were open the whole pandemic though some branches needed an appointment to make sure someone would be there.

It just amazes me that a credit union can get so popular while effectively outsourcing (for example, when someone like you would go to "a non-cashless credit union") a basic function of banking. I know of a couple of credit unions in the Puget Sound region who have dropped out of the co-op credit union network in response to BECU only doing shared member activities via their ATM. BECU's customers would turn around and come to those other credit unions, increasing their load.

Yeah, BECU. I mostly use StarOne, formerly Lockheed Martin Credit Union, but they're in the Bay Area and now I live in Kitsap. BECU seems well liked, and seemed to be more open than the other credit unions over here.

You just reminded me that I was in London, I think, and for some reason I was really glad I had an emergency $100 in my wallet. Debit card didn't work, or something. It's been a while now.

> the average bank branch doesn't keep a bunch of hundreds laying around

Is that what you've found? I think asking for 10 or 20 would usually work. If you wanted $200,000 worth, you might get asked a few questions :)

$20s are OK. That's the usual thing that ATMs spit out. But I've had various problems over the years where I've wanted a few hundred dollars because of some issue. I have more card redundancy these days--because you have to given anti-fraud systems. In the past I've have carried traveler's checks but that doesn't really make sense any longer. I do like having a good $500 of cash with me for foreign travel and probably more for more remote locations. $100 bills aren't essential but a few can be useful as an emergency reserve.

Anecdotally, in Poland it seems that branches really are for "old people". There is an entire generation which will want to do most things with a human in a branch. Then there is a generation that psychologically needs a branch nearby just to feel better (secure), and there is a subsequent generation which simply doesn't care about branches at all.

On a practical level, once you open an account, you typically never visit a branch again, unless for a really major paper event (like signing a mortgage). There is simply no point.

The ATM I use lets you set the mix of denominations it returns. Which is good since it recently started giving out all $100s by default.

Many ATMs in Canada now allow you to choose which notes you'd like for cash withdrawals. Anything from $100s to $5s are available, including specific quantities of each

um, breeders are morally questionable... https://www.google.com/search?q=dog+breeders+bad

> You can still use a branch manager to achieve an escalation of a routine issue into a bank’s call tree, because they likely have a special number for that,

Yeah, not for B of A, at least in the Seattle area. I've had plenty of times when they were holding $1 million of my cash (yes, I'm not the best investor) and getting simple tasks done meant they had to call the exact same numbers I did, getting hung up in the same menu trees. Infuriating.

B of A = Bank of America, for the ones that didn't live in the US long enough to know the meaning of it.

They are talking about the branch manager for the branch you're in, not for phone support.

Bank of America DOES has a Preferred Rewards program for people with a bit of money with them or Merrell Lynch - https://www.bankofamerica.com/preferred-rewards/

You have to enroll in it yourself though.

I'm the highest tier member ($100,000) and I have "priority member services" under "Preferred Rewards" the bottom of the app when I login. It says I can "speak to a specialist" or "schedule an appointment."

I’m enrolled. I still end up being dropped out of phone menu tree.

Yeah I value a few branches around. I'd hate to rely my finances on some startup with an app that could stop working any time. A branch gives some idea of permanence. Maybe its an illusion but I just dont trust virtual only banks.

I did make that mistake and started my adult life banking with the former simple.com. Their actual banking partners were just small local banks in random midwestern places. My grandma got me into Navy Federal and there’s plenty of branches around where I live and I really prefer having a location to stop by with a question

I totally understand not wanting to use a "fintech", which is usually not a chartered bank.

But Chase, BoA, etc. etc. all have very good mobile apps. I still don't see why you would hardly ever have to go to a branch if you used one of these apps.

The right answer, as pointed out clearly in the article, is generational. Older generations normally have much more wealth than younger generations, and that's on top of the fact that millennials have a lot less wealth at this stage of their life than baby boomers did.

So the vast majority of wealth held by retail banks is for people who got most of their wealth, and certainly most of their banking experience, before online banking existed. I have a strong sense that once that generation passes that bank branches will go the way of the dodo, or else completely transform into something else (e.g. like what some banks are trying to do with "coffee shop" branches).

Definitely an illusion, banks are about making a buck, or lots of bucks, full-stop.

Bankers are the greediest of the greedy of humanity. Don't trust them to look out for your best interests any further than you can throw 'em.

Some individual ones might be nice enough people, but the system at large encourages and rewards certain very self-interested behaviors.

After reading TFA, I'm sorry I wrote this. Please accept my apologies for the useless shitty comment.

lol, I've worked in a bunch of financials and honestly the most greed I've seen is on blind.

The most surprising thing for me was... well... this tweet discussed.

https://twitter.com/patio11/status/1181062074316681216

There's more bank tellers today than ever before, despite the proliferation of ATMs. Strange.

It surprised me too but I guess the summary is something like ‘banks used to have 500 tellers per atm and now they have about 1.5 tellers per atm. I think that number is a bit surprising still but presumably it isn’t counting ATMs at places that aren’t banks.

> Bank branches exist to sell new accounts. They are sited to maximize new accounts and the value of those accounts.

Funny, just recently I was trying to help someone switch banks and we went to 3 different branch locations in an attempt to open a new account.

The first didn’t have any reps working that could help open a new account and the other two didn’t have any availability to help with opening a new account and requested we schedule an appointment and come back.

We went online to schedule an appointment but the first available slot was at least 2 weeks out.

I'm curious if this also applies to credit unions. I understand they are structured and regulated slightly differently but it seems like they're subject to a lot of the same pressures.

I use credit unions pretty much exclusively and have never done much business with a bank, but it seems like they are mostly the same from an end-user perspective. Is the anecdote about "being ambushed [by a salesperson] upon walking in" a common occurrence? This has luckily never happened for me at any credit union.

Credit onions have another pressure - they’ve limited things that they can legally “do” with profits and one of the easiest is to reinvest in the branches, etc.

I'm curious about this too, as I've only used credit unions and branchless banks. Credit union branches are plastered with loan and mortgage advertising, and the people who handle the loans are salespeople, but I've never been "ambushed" upon walking in.

The only time anything close has happened to me was years ago when I deposited a $40k check into savings. The teller went and got a manger who asked if I wanted to hear about investment options. I declined and that was it. Not an unreasonable question to ask somebody delisting a large sum of money.

Back in the day, Google used to give every employee 10 $100 bills at Christmas. You can probably imagine at least ten good reasons why they stopped, so I won't list them here.

Anyhow, I found almost all retail stores would take them. It doesn't surprise me that a bus driver wouldn't -- they don't carry huge amounts of cash.

This article is full of things I didn't know.

Assuming that all of this is true, I'd like to see a solid explanation of why credit unions, which are not subject to the same incentives as banks, appear to more or less replicate the same idea?

“‘the mass affluent’; they’re retirees, dual teacher families, software engineers, small business owners, and doctors”

Um I think one of these things is not like the other from a cash holdings standpoint.

Dual teacher families?

In the Chicago area a dual teacher family has income approximating a Google engineer. I'm related to several examples.

I know folks think the profession took a vow of poverty, and while they're not compensated in this fashion everywhere, they have excellent PR on that front.

Teachers can max out at a good salary, Chicago looks pretty close to where I live where 25-30 years in you can get up towards 90-100k. An L3 Google engineer looks like they start at 190k. That’s an extreme example but I’m just saying, dual-teacher families are probably not exceeding the median dual-professional household salary, so I don’t understand the callout.

Similarly in California, especially for the wealthier districts. Maybe even more than in Chicago.

Based on “millionaire next door” I’m not surprised to see that on the list. Teachers in general seem to live a “less flashy” life than a stereotypical lawyer, and two of them now on pension may have lots of cash laying around - and selling them product could be quite lucrative. Someone’s buying the CDs and overpriced mutual funds.

A lot of people do need a physical bank branch now and then for various reasons. As the article lightly touches on towards the end however, it's never been totally clear to me why banks need such often large branches in some of the most expensive real estate. I expect at least one explanation in that bank banks think it's important to look very respectable and trustworthy.

> I will note that the United States Postal Service has an employed senior official whose only job is making sure the largest banks in the U.S. don’t go paperless-by-default.

This sounds interesting and plausable, but can anyone find a source for it?

Ctrl-F for Paul Vogel.

https://www.nbcnews.com/id/wbna43259512

Are we talking about : (a) local credit unions, or (b) those with direct access to the Fed's easy money counter?

If not for the purpose of getting the salary, no need to open a bank account for me.

A lot of people who own houses, pay service people of various kinds, etc. still write checks pretty regularly. There's more acceptance of credit cards and things like Venmo--which I believe have a premium to put on a credit card--but I still write checks for a lot of things in the US.

A lot of the common services in the U.S. that take credit cards charge steep "convenience" fees. I've seen them for property managers (rent), utilities, and even government agencies like property tax collection. I once rented an apartment whose payment processor added an extra flat $35 to credit card charges. No thanks, I'm mailing a check!

I think my town is like that for various taxes. They farm it out to a third-party, presumably for "free," and the third-party gets their profit by charging a fee of some sort. So I either physically send a check or, for regular payments, I set up check payments through my bank.

What service people don't take credit cards these days?

Tons of them. My housekeeper. My lawn service. I think my furnace service just started taking them. But by no means universal. And, of course, a fair number of people want cash.

And those that do take card often offer a discount for check or cash.

Especially individual servicers. Big companies will take card all day long, but joe the plumber would rather have cash.

Hairdressers prefer cash or Venmo in my experience.

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