RE: [MLUG - DISCUSSION] banks fscking me

["Brent Deterding" <EMAIL:PROTECTED>]

Reference: A small branch pf a bank in Columbia made over $100,000 in fees
in ONE month

-----Original Message-----
From: EMAIL:PROTECTED
[mailto:EMAIL:PROTECTED]On Behalf Of Jonathan King
Sent: Thursday, May 09, 2002 9:29 AM
To: EMAIL:PROTECTED
Subject: RE: [MLUG - DISCUSSION] banks fscking me



On Thu, 9 May 2002, Mike Miller wrote:

> I don't know what a REG/CC hold is, but don't banks only put a hold on
> the funds until they have their money from the other bank?  That is, I
> deposit a check at Bank A, but that check is drawn on Bank B, so Bank
> A waits to get the money from Bank B before allowing me to access the
> money.

I think that's true in spirit, but it is a bit more complicated than
that.  In particular, a lot of checks get "cleared" before funds are truly
transfered, and I believe there *is*, come to think of it, a two-week
period where Bank B could "dishonor" the original check if, for example,
it is a legitimate check but perhaps being cashed fraudulently.  Now,
that's where your history with a bank probably plays a role.

> That makes perfect sense to me.  Why would that ever take two
> weeks?  That's a hell of a long time.  If they hold money after
> they've received it, I think they are taking advantage of their
> poorest customers -- hoping the customers will mess up so that they
> can screw them out of some more fees.

I'm pretty cynical, but I don't think the problem here is *that*
transparent.  I'm pretty sure that if you looked at the actual patterns of
check fraud in terms of who is doing it and how it is done, I suspect that
it is disproportionately a problem of people who, well, have no money.
Banks make money off of depositors in two ways: they capture the spread
between the interest (if any) that they pay and the interest they get on
loans, and they can assess various service fees.  Now, somebody like you
or me is a goldmine for them, since paychecks are auto-deposited (and good
as gold) and any interest we get is much smaller than their lending rates.
So they can make us feel good by waiving a bunch of fees, and frankly
don't expect to get much from us that way.  The average poor person isn't
going to get them anything much on the spread, since they have very little
money deposited, but they do get something more from fees (minimum balance
fees and ATM fees in particular).  So I don't think banks are out to
screw the poor, because they try to make money off of everybody. :-)

jking


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