But that's not the only issue: The bank also has higher withdrawal limits for unemployment recipients than other in-network ATMs, so if you need to access the money right after it's paid out for a big expense like rent, you essentially must use this ATM
At the end of the article, it was stated that there are other in-network ATMs available -- around 100 per borough -- but that fact wasn't made abundantly clear to recipients. Those ATMs do have lower transaction limits, but it's possible to use back-to-back transactions to withdraw the full amount.
I'm not sure why you're being downvoted this much, it's a very reasonable question. Heck, the #1 upvoted comment is this is exact same question phrased in a different way.
If it's anything like California unemployment last time I used it (for paid family leave, not traditional UI), you can't actually “elect for direct deposit” in the simple sense; you get an ATM card and after benefits are first loaded you can go through a process to transfer the balance to your bank, and only then set up future deposits to be transferred automatically to your bank. The bank transfer is not instant, either, it's a 2-3 business day process.
The quickest way to get benefits out if you need it the first time is to withdraw the limit from the card at an issuing-bank ATM.
And, of course, the people.that are least employment-secure overlap significantly with the unbanked. Can't elect direct deposit if you don't have a bank in the first place.
At the end of the article, it states that 80% of the New Yorkers that receive unemployment benefits chose to receive them via direct deposit, and the 20% that didn't received them in the form of a debit card.
Right, what I’m saying, using California UI as an example, is that it's possible that there are implementation-detail-based reasons that people do not choose direct deposit, especially the large surge of new filers in the present predicament who often also had delayed benefits and thus were more likely to have urgent immediate need.
The 30,000 foot view of a program often obscures important details; information on California UI I've seen also refers to how many choose direct deposit vs. choosing an ATM card, glossing over the details of the mechanics of how that works which is actually that everyone gets an ATM card, and some people, after getting it, redirect the funds to their bank, which only happens as direct deposit after the first time (and not really even then, IIRC, it still goes into the account tied to the card and then is immediately automatically transferred.)
In TX I think you got one or two weeks on the card before direct deposit when I was on it 2 years ago. The times before that, it was only on the card, which a PITA.
It was explained better in the (otherwise less informative) BoingBoing article that this originally linked to: Direct deposit is an option, but not everyone takes that option.
There are a lot more unbanked people than I think most folks who occupy the more stable corners of the economy realize. All those private businesses that prominently advertise check cashing services littered about major cities? Those signs aren't archaic leftovers from the 1970s; that's still a useful service that a lot of people use.
Why is that? I assume operating a bank account can't be that expensive for banks. If they don't let customers withdraw past zero, they don't really have risks, but they could still take a fee. Is there some regulation that makes it unprofitable? Are people okay not having a bank account and don't bother getting one because paying rent in cash is accepted?
> Are people okay not having a bank account and don't bother getting one because paying rent in cash is accepted?
It largely is expensive and annoying to not have a bank account. Typically what keeps people from having a bank account is being in poverty: bad credit, no permanent address, dodging debt collectors, and probably a lot more reasons than that.
Yeah, I don't think people understand how expensive it is to be in poverty (overdraft fees, etc.). For some, it makes more sense to use check cashing than struggle with low bank account fees.
I don't think it's less banks denying them from getting an account, and more banks making it it cost prohibitive to have an account. The ones that come to mind are minimum balance requirements and getting "fined" if you make a mistake (eg. NSF fees).
That's really weird. Her in Norway (and Scandinavia generally I believe) I never pay my bank any fees. There are no minimum balance requirements. I also have a bank account in the UK and that is pretty similar. It only costs me if I go into the red.
I have a family member who works at a bank and has been having to field some of these situations. This is all anecdotal, but at least should help fill out some of the possible situations.
+ A fair amount of people have savings accounts and nothing else. They don't have a debit card and don't use that account with any regularity.
+ There are also some folks who have checking accounts but don't have or don't want to use debit cards. I don't fully understand the why, it sounds like this mostly older folks who don't trust them.
+ There are some access issues with banks. Most banks still want you to be in person for opening an account, and you need to be in person if you want to get cash. For some folks who aren't very mobile, most local banks don't have enough branches.
+ There are some people who really struggle with the paperwork. It's not a difficult form especially for the bank in particular I'm using a reference and the bank tellers will help you fill the form out (it's a page with your name and address, and your social security number basically) but that's enough of a hurdle it precludes some people. Some of the information that's collected here is required by the feds to limit moneylaundering, it's not just the bank.
I suspect it happens but have not heard of any cases of fees being directly the cause. I know I've had a few conversations where someone was surprised to find out you can do banking without fees, didn't understand it was possible to ask for a rate schedule, didn't understand ATM networks, etc. I suspect there's a financial literacy gap that's a cause here (and many subpar banks being fee happy).
People are unbanked for various reasons. Banks are not well optimized for those of lower socioeconomic conditions (and in fact don’t really want them as customers). Here are a few examples where banks fail them:
1. Speedy access to money
When you deposit a check into a bank account, you have to wait a few days before the cash is accessible. Many people live paycheck to paycheck and they cannot wait. Hence check-cashing services.
2. Overdraft fees
These are incredibly regressive - punishing those who have low funds. Some banks were caught with predatory behavior - rearranging transactions in a day so the largest hit first and they could trigger multiple overdraft fees (since it is per-transaction) until laws were passed to prevent this behavior.
3. Other hidden fees (low-balance, etc) that aren’t very transparent and really painful when every dollar counts.
Not to mention cultural issues etc. Long-story short, there is a reason people use check-cashing services even though at face value they seem a worse deal than traditional banks.
Those and other reasons make absolute sense, but I would imagine somebody to offer basic banking to the unbanked with a reasonable fee structure etc and just take the market. Germany's banking system is terribly customer hostile, but we've got that covered. The US is the motherland of disrupting old industries, why is it that it's not sorted out yet?
I get why some old self-important bank does not want to deal with the poor and makes faces if you suggest it, but somebody has to yell pecunia non olet and jump int.
There was a great article (link on HN?) about check cashing and payday loan companies in NY. Many people who for whatever reason don't have a bank accounts so they use check cashing places as a bank to cash a check.
> customers baked in 79-degree temperatures as they waited
Bit dramatic? With summer temperatures of 96+ in Texas, 79 sounds delightful. Is this a common discomfort up North, like the heat wave episode of Seinfeld? I’m fascinated with how we acclimate to different climates.
Yes this is hot. In direct sunlight I would find it uncomfortably hot, and would hopefully have some water if I was to wait around for half an hour or more.
Conversely I think nothing of going out in shorts and a t-shirt in 45-degrees.
I grew up in Miami, live in NYC now, 79 feels insanely hot to me now. I'm sure there's some science to this, but it's probably either acclimation to the "average" temperature, or maybe differences in humidity?
Also every place in Miami has killer A/C, that probably factors in quite a bit.
Maybe also differences in wind? I'm guessing Miami gets a nice sea breeze much of the year. Things are likely very different in the urban geography of NYC, with wind tunnel effects in some places and stale air in others.
“There are more than 1,000 ATMs in New York City that KeyBank debit cardholders can use for free, including over 100 in each borough, and it is entirely unacceptable that the bank failed to communicate those options to unemployed New Yorkers,” said state Department of Labor spokeswoman Deanna Cohen.
I'm kind of amazed that the bank didn't at least put a sign up in the window listing the nearest fee-free alternatives for the sanity of its own employees and the continued operation of the ATM at that location. How many transactions can one machine manage before it runs out of cash or requires maintenance?
43 comments
[ 4.2 ms ] story [ 100.0 ms ] threadBut that's not the only issue: The bank also has higher withdrawal limits for unemployment recipients than other in-network ATMs, so if you need to access the money right after it's paid out for a big expense like rent, you essentially must use this ATM
So, change to "folks suspicious of direct deposit have to wait in line".
the branch could have also just posted a notice on the board that other ATMs may be used
would be a less clickbaity title
[0] https://en.m.wikipedia.org/wiki/Unbanked
The quickest way to get benefits out if you need it the first time is to withdraw the limit from the card at an issuing-bank ATM.
And, of course, the people.that are least employment-secure overlap significantly with the unbanked. Can't elect direct deposit if you don't have a bank in the first place.
The 30,000 foot view of a program often obscures important details; information on California UI I've seen also refers to how many choose direct deposit vs. choosing an ATM card, glossing over the details of the mechanics of how that works which is actually that everyone gets an ATM card, and some people, after getting it, redirect the funds to their bank, which only happens as direct deposit after the first time (and not really even then, IIRC, it still goes into the account tied to the card and then is immediately automatically transferred.)
There are a lot more unbanked people than I think most folks who occupy the more stable corners of the economy realize. All those private businesses that prominently advertise check cashing services littered about major cities? Those signs aren't archaic leftovers from the 1970s; that's still a useful service that a lot of people use.
It largely is expensive and annoying to not have a bank account. Typically what keeps people from having a bank account is being in poverty: bad credit, no permanent address, dodging debt collectors, and probably a lot more reasons than that.
+ A fair amount of people have savings accounts and nothing else. They don't have a debit card and don't use that account with any regularity.
+ There are also some folks who have checking accounts but don't have or don't want to use debit cards. I don't fully understand the why, it sounds like this mostly older folks who don't trust them.
+ There are some access issues with banks. Most banks still want you to be in person for opening an account, and you need to be in person if you want to get cash. For some folks who aren't very mobile, most local banks don't have enough branches.
+ There are some people who really struggle with the paperwork. It's not a difficult form especially for the bank in particular I'm using a reference and the bank tellers will help you fill the form out (it's a page with your name and address, and your social security number basically) but that's enough of a hurdle it precludes some people. Some of the information that's collected here is required by the feds to limit moneylaundering, it's not just the bank.
I suspect it happens but have not heard of any cases of fees being directly the cause. I know I've had a few conversations where someone was surprised to find out you can do banking without fees, didn't understand it was possible to ask for a rate schedule, didn't understand ATM networks, etc. I suspect there's a financial literacy gap that's a cause here (and many subpar banks being fee happy).
1. Speedy access to money When you deposit a check into a bank account, you have to wait a few days before the cash is accessible. Many people live paycheck to paycheck and they cannot wait. Hence check-cashing services.
2. Overdraft fees These are incredibly regressive - punishing those who have low funds. Some banks were caught with predatory behavior - rearranging transactions in a day so the largest hit first and they could trigger multiple overdraft fees (since it is per-transaction) until laws were passed to prevent this behavior.
3. Other hidden fees (low-balance, etc) that aren’t very transparent and really painful when every dollar counts.
Not to mention cultural issues etc. Long-story short, there is a reason people use check-cashing services even though at face value they seem a worse deal than traditional banks.
(Source: was VP of ENG at Credit Karma)
I get why some old self-important bank does not want to deal with the poor and makes faces if you suggest it, but somebody has to yell pecunia non olet and jump int.
Why do cheques still exist? We haven't had them here in Norway for twenty years.
Bit dramatic? With summer temperatures of 96+ in Texas, 79 sounds delightful. Is this a common discomfort up North, like the heat wave episode of Seinfeld? I’m fascinated with how we acclimate to different climates.
Conversely I think nothing of going out in shorts and a t-shirt in 45-degrees.
Also every place in Miami has killer A/C, that probably factors in quite a bit.
What? Why not a sign with a map of all those 1000+ ATMs they can use for free? This seems like the wrong takeaway.
I'm kind of amazed that the bank didn't at least put a sign up in the window listing the nearest fee-free alternatives for the sanity of its own employees and the continued operation of the ATM at that location. How many transactions can one machine manage before it runs out of cash or requires maintenance?