Coworker Finally Got Checking Account

[myrdale]

I've got a coworker who came in yesterday, happy as a lark, bragging to me about having just signed up for a bank account. I congratulated him and told him I thought it was a smart move.

This guy is in his 60's. We've worked together for over a decade. Over that time, on a couple of occasions I've heard him discuss cashing his check at different convenience stores or the like. I'd mention the amount this was costing him per month, he'd get defensive, so we would change topics.

I've never pressed for the details of why he didn't want to have a bank account previously. I understand that if you owe one bank money, you can be black listed. Guess I could understand being paranoid about the IRS, but I am not sure where not having a bank account gets you. If there was some judgement against you, I would have thought they would go to your employer directly.

I have a hard time understanding why people don't trust banks. A minimum balance is required and if you spend money you don't have, you have to pay fines.

Of course if you're involved in some illegal business, that money isn't going to the bank. But your normal paycheck? What am I missing?

[kork13]

I honestly can't imagine not having bank accounts.... Too much money going in & out of our household every month to handle otherwise! I mean, even when I was in college & only earning ~$500/mo, I wouldn't be comfortable keeping that much money in cash with me at all times, let alone my salary as an adult. Paying bills, making travel reservations, and just about everything else financial is immensely simpler with the availability of banking services.

But then, I've seen stats that say 8-10% of the country is "unbanked" with no bank accounts at all. I expect that much of it is due to ignorance or distrust of banks, or fear of state/federal/court authorities, or perhaps feeling 'burned'/other bad experiences with banks previously. I know there's also some perception that banks are not accessible to poor people, i.e., those living hand to mouth.

[disneysteve]

I have a hard time understanding why people don't trust banks.

Being unbanked is most common among the poor and non-Asian minorities. Reasons people give for being unbanked include not having enough money, not trusting banks, thinking fees are too high or unpredictable, or not having the government ID needed to open an account. Privacy concerns are also a big issue.

[disneysteve]

Too much money going in & out of our household every month to handle otherwise! I mean, even when I was in college & only earning ~$500/mo, I wouldn't be comfortable keeping that much money in cash with me at all times

Most of the unbanked are poor. And we know that 70% of people live paycheck to paycheck, so there isn't a lot of money to begin with and once they pay their monthly bills, there is little to nothing left anyway.

[~bs]

could be illegal alien
could be a foregner from 3rd world country who historically don't trust the banks because of corruption
could be any number of things. you should just ask him instead of just being niele (hawaiian slang/word)

[bjl584]

I had a friend who didn't have a bank account because he had a collections judgement against him.
He was worried that they were going to steal the money out of his accounts if he had any in a bank.
Not sure there was any truth to that fear, but that was his reasoning.

[disneysteve]

I had a friend who didn't have a bank account because he had a collections judgement against him.
He was worried that they were going to steal the money out of his accounts if he had any in a bank.
Not sure there was any truth to that fear, but that was his reasoning.

A lot of reasons people don't have accounts are due to poor financial literacy and fears of things that aren't actually true. I suspect that's a lot more common in minority and especially immigrant populations who come here from countries where the banks are much different than ours.

[Smallsteps]

I've got a coworker who came in yesterday, happy as a lark, bragging to me about having just signed up for a bank account. I congratulated him and told him I thought it was a smart move.

This guy is in his 60's. We've worked together for over a decade. Over that time, on a couple of occasions I've heard him discuss cashing his check at different convenience stores or the like. I'd mention the amount this was costing him per month, he'd get defensive, so we would change topics.

I've never pressed for the details of why he didn't want to have a bank account previously. I understand that if you owe one bank money, you can be black listed. Guess I could understand being paranoid about the IRS, but I am not sure where not having a bank account gets you. If there was some judgement against you, I would have thought they would go to your employer directly.

I have a hard time understanding why people don't trust banks. A minimum balance is required and if you spend money you don't have, you have to pay fines.

Of course if you're involved in some illegal business, that money isn't going to the bank. But your normal paycheck? What am I missing?

I never understood this either.
It probably plays a large part of the problem of those struggling.
I have seen those whom literally know the policy and fee of almost every store or place that will cash a check. Yet they don't research what would it take to open bank account.
Have known a guy that friends and family that wanted to run paychecks through them since he was the only person they knew that had an account. they often paid him for the service
Once you add up fees for being un-banked it is amazing.

I worked at a bank was never heard of Any blacklist. Maybe if people offered up information like "years ago i messed up bad with X bank" perhaps that would raise red flags but never heard of refusing an account.

The fear of money being taken for past taxes/ child support/ judgements will only be activated if those entities become aware of your account. Example: if ex spouse found out where you bank and tells state.
Unless they are looking for it specifically, no one to my knowledge is running a check sporadically to find new accounts or additional accounts to collect money. I did know a guy who changed jobs frequently to stay ahead of state attaching his paycheck for debt. that can happen regardless if you have a bank account or not.

The ID problem may be a bigger issue but that often makes me wonder as how many people are running around WITHOUT valid ID how do they do anything that requires ID.... but most are STILL driving lol.
The minimum balance could be an issue....... IF they were able to save all the check cash fees money order fees and often the direct deposit debit cards some places pay with if you do not have an account.......... have insane fees too. I had a friend said IF she checked balance on payroll debit card it was a 50 cent fee each time.

Saving all those costs of being without account could quickly add up to meet a balance or one fee might be smaller then being nickled and dimed with many fees.
I have also seen people ask a bank if they could have a grace period to build up the minimum balance some banks have that leeway....the one i worked at had a 6 month leeway for minimum balance requirement much longer if it was a child's account.
While I usually am happy for anyone making smart financial moves it is a bit sad it takes so long for some to realize.

[Petunia 100]

I worked at a bank was never heard of Any blacklist. Maybe if people offered up information like "years ago i messed up bad with X bank" perhaps that would raise red flags but never heard of refusing an account.

I assume they meant Chexsytems.

https://www.chexsystems.com/web/chexsystems/consumerdebit/page/home/!ut/p/z1/04_Sj9CPykssy0xPLMnMz0vMAfIjo8ziDRxdHA1Ngg183AP83QwcXX39LIJDfYwM3M30wwkpiAJJ4wCOBkD9URAlMBP8PUKMgCa4-rgbG3kbugeaoCtAs8LAHKYAtyUFuREGmZ6OigAWLRKn/dz/d5/L2dBISEvZ0FBIS9nQSEh/