In 2012, $34 billion was loaded onto 4.6 million active payroll cards
July 1, 2013 7:55 AM Subscribe

A growing number of American workers are confronting a frustrating predicament on payday: to get their wages, they must first pay a fee.
posted by boo_radley (134 comments total) 47 users marked this as a favorite

Companies and card issuers, which include Bank of America, Wells Fargo and Citigroup, say the cards are cheaper and more efficient than checks — a calculator on Visa’s Web site estimates that a company with 500 workers could save $21,000 a year by switching from checks to payroll cards.

The cards are cheaper than traditional check/direct deposit payroll because they pass the cost of doing business onto the employees. Gross.
posted by muddgirl at 7:59 AM on July 1, 2013 [89 favorites]

Can I just say, this looks like a good bit of thoughtful journalism to me?
posted by newdaddy at 8:01 AM on July 1, 2013 [7 favorites]

As usual, the ones that are harmed most by these fuckers are the ones that can't afford it.
posted by Old'n'Busted at 8:02 AM on July 1, 2013 [7 favorites]

This is such a terrible thing. My kids' friends, just starting out with their first jobs, are getting paid on debit cards. They don't have bank accounts, they've graduated high school with zero financial education, and they're handed hundreds of dollars at a time with no way to access it without either spending it or turning it into cash. Fees abound, no matter what, and they're stuck in an earn/spend cycle that gets them nowhere. Traditional banks don't want anything to do with them, credit unions can't reach them. It's shameful.
posted by headnsouth at 8:04 AM on July 1, 2013 [28 favorites]

Another option is always the company bank and the company store. That's always turned out well in the past...
posted by Nanukthedog at 8:06 AM on July 1, 2013 [5 favorites]

The concept of paying people through a debit card account is perfectly good. The problem is that the fees charged for the service are not effectively regulated. As we found in California, bank regulation is largely a national matter, so much so that we couldn't outlaw ATM fees. So it's left up to the federal government to regulate banks to provide a fair experience for consumers. HAHAHAHAHAHA.

I don't even begrudge the banks their fees and profits. The problem is that per-transaction fees are the worst kind of regressive tax on the poor.
posted by Nelson at 8:06 AM on July 1, 2013 [44 favorites]

Some employers and card issuers say that the payroll cards are useful for low-wage workers who do not have bank accounts. They also say that the fees on the cards are usually lower than those associated with check-cashing services, which are often the only other option for people who do not have bank accounts.

Translation: See how great we are? We screw people *slightly less*!
posted by rtha at 8:06 AM on July 1, 2013 [10 favorites]

“We built a product that an employer can fairly represent to their employees as having real benefits to them”

I am not a violent person, but I would take great pleasure in kicking this guy in the nads....... repeatedly.
posted by remo at 8:07 AM on July 1, 2013 [6 favorites]

I am not a violent person, but I would take great pleasure in kicking this guy in the nads....... repeatedly.

You can fairly represent that he is benefiting from you not wearing spiked boots.
posted by jaduncan at 8:09 AM on July 1, 2013 [63 favorites]

The problem is that per-transaction fees are the worst kind of regressive tax on the poor.

It's not a tax - that at least would be in theory going to the common good of paying for government programs.

This is an egregious additional windfall profit for a cynical financial corporation.
posted by aught at 8:12 AM on July 1, 2013 [27 favorites]

I like how the last paragraph gives the full name and city of a young woman who says she has a shoe box full of 10's and 20's in her closet. Thanks, Times. Smrt.
posted by dirtdirt at 8:13 AM on July 1, 2013 [29 favorites]

21k savings. For a company with 500 employees. That's peanuts.
posted by ericost at 8:13 AM on July 1, 2013 [4 favorites]

That's $21,000 more that can go to executive perks and bonuses, man.
posted by Ghostride The Whip at 8:14 AM on July 1, 2013 [13 favorites]

I would love it if christians recognized injustice like this and did something about it. I want the church to offer a no-fee alternative to usury. Swap your "payroll card" for the equivalent amt of cash, no fee. File your taxes and get an instant refund, no fee. Payday loans, no fee. I think if a church was able to do that it would not only help the people hurt by these predatory practices, it would make church members aware of the issues. It really is something that crosses political boundaries for christians - the bible is really clear about avoiding usury and not holding back the wages of the hired man overnight, etc.
posted by selfmedicating at 8:18 AM on July 1, 2013 [80 favorites]

It's next to impossible to sue your employer for discrimination and/or harrassment (thanks, Roberts Court!). De facto company stores and banks are legal again. Just organizing a union is borderline illegal. Serious contenders for President think we should get rid of child labor and worker safety laws. Government oversight of employer malfeasance is about to be gutted (thanks again, Roberts Court!). The list goes on and on.

It's only a matter of time until we're back to the Gilded Age at this point.
posted by zombieflanders at 8:19 AM on July 1, 2013 [17 favorites]

There is a sickness here that has been taken to its utter limit. Company scrip.
posted by infini at 8:20 AM on July 1, 2013 [6 favorites]

The franchise owners, Albert and Carol Mueller, said in a statement that they comply with all employment, pay and work laws

And here we have the main problem, which just goes to show how skewed laws are to the side of the employer. The law allows them to pay people in this way, they can save $21,000 so why the hell wouldn't they do it. They benefit, the company benefits, they hire more staff - this is job creation people! You're not expecting them to actually give a shit about the welfare of those staff are you?
posted by jontyjago at 8:21 AM on July 1, 2013 [7 favorites]

That's $21,000 more that can go to executive perks and bonuses, man

Why do I have the feeling their thinking is going to be something like, "Brilliant -- we just saved ourselves $21k per year. Let's award ourselves $100k for being so clever!"

In one of the Grand Theft Auto games, one of the randomly generated lines for NPCs when you pull off a carjacking is "Damn, man, you can't have shit around here!" The first time I heard it, I actually stopped the game for a second because it made me feel bad. It was eerily similar to things I heard from people growing up in the ghetto whose homes or cars had been vandalized one time too many.

And now that I'm all grown up, sometimes when I look at how Big Business operates, it looks like the upper echelons at a great many (though by no mean all) companies really don't want the rest of us to have shit around here. It's like they give things to us with clenched teeth and hands and then scheme on ways to reduce even that pittance at every single opportunity.
posted by lord_wolf at 8:22 AM on July 1, 2013 [69 favorites]

This isn't just private companies. When I was unemployed a few years ago, my state unemployment benefits were loaded onto a card, and my transactions were subject to fees. It was infuriating and unavoidable. You had to take the card until they could set-up your direct deposit, which could take weeks.
posted by gladly at 8:23 AM on July 1, 2013 [7 favorites]

my former employer changed to this just before i left. i was a manager and had to pass this down to my employees. a few of them didn't have checking accounts and it really fucked them over. i ended up loaning 500 dollars here and there to cover their rent while they waited to be able to access the money on the card. it was one of the things that helped solidify my decision to leave - i just couldn't keep passing the shit downhill.
posted by nadawi at 8:24 AM on July 1, 2013 [14 favorites]

Guys, I'm pretty sure this is just the invisible hand of the free market finding an optimal solution for everyone inv--PFFFFFTT sorry I couldn't keep a straight face.

A company needs to exist (at least in part) for the benefit of its employees. That's the concept that's missing here. The employees are seen merely as an expense to maximally exploit.
posted by daveliepmann at 8:24 AM on July 1, 2013 [10 favorites]

This isn't just private companies.

I am genuinely astonished. That smells very much of a gift to a donor.
posted by jaduncan at 8:25 AM on July 1, 2013

The employees are seen merely as an expense to maximally exploit.

There's a reason it's called Human Resources.
posted by Celsius1414 at 8:28 AM on July 1, 2013 [12 favorites]

Greed is a vice, right?
posted by The Whelk at 8:29 AM on July 1, 2013

Nanukthedog: "Another option is always the company bank and the company store. That's always turned out well in the past..."

infini: "There is a sickness here that has been taken to its utter limit. Company scrip."

This pops up again and again and again in discussions like these to the extent that it feels like I'm talking to my crazy old relatives. This is not script, it's bank script. This is not a company store, it is banking.

I recently left a company (for completely unrelated reasons) that was about to roll out these cards for their minimum-wage employees. In no way did the employees not take home money, and in no way did they have to only buy the company's products.

All that being said, the cost reduction to the company does indeed come from passing the cost of accounting etc to the employee, meaning those minimum wage workers were about to get a pay cut. Which, from a certain point of view, is like the company taking money from the workers.

But I am sick of hearing the glib, one-line "COMPANY STORE COMPANY SCRIPT COMPANY TOWN" argument thrown around because it's meaningless. Let's focus on the things that are actually happening - companies are paying employees less - instead of getting side-tracked by similar things that we've already faced.
posted by rebent at 8:30 AM on July 1, 2013 [2 favorites]

How do you pay rent with one of these?
posted by desjardins at 8:30 AM on July 1, 2013 [3 favorites]

I think you find an ATM and pay a fee to withdraw a bunch of cash, then you go to Western Union and pay a fee to get a money order. Whee!
posted by Elementary Penguin at 8:31 AM on July 1, 2013 [14 favorites]

I can't find the current status of the program, but if I recall correctly, the Treasury Dept. offers a prepaid debit card option for federal income tax refunds.

Starting with the 2013 tax year, Minnesotans will only be able to received their income tax refund via direct deposit or prepaid debit card.
posted by SemiSophos at 8:33 AM on July 1, 2013 [2 favorites]

If 21K is the number, it only makes me more angry - screwing employees to save on pennies? C'mon.

I once worked for a company whose owner started every meeting with "what have you done to save me money this week?"

This sounds just like the answer an executive would love to give him.

How do you pay rent with one of these?

You spend a buck and buy a money order.
posted by ndfine at 8:33 AM on July 1, 2013

desjardins asks, How do you pay rent with one of these?

You buy a Postal Money Order at the Post Office -- like the one up the street from where I work, where I see an even 50/50 balance between postal transactions and P.M.O. sales to nearby Section 8 folks, every damn time I am there.

And which is scheduled to close this year because of No reason I Have Yet Heard. *facepalm*
posted by wenestvedt at 8:35 AM on July 1, 2013

instead of getting side-tracked by similar things that we've already faced.

You're right. Its a different century and that old shit has been polished and reshaped into hopefully unrecognizable new structures. What's the demographic breakdown of those who are facing this challenge the most?
posted by infini at 8:36 AM on July 1, 2013 [3 favorites]

desjardins - at my company they were allowed a single withdrawal from an atm from a specific national bank within 72 hours of the money being loaded at no cost - but any subsequent withdrawals incurred a fee. and then yeah, off to the grocery store to get a money order or two.
posted by nadawi at 8:36 AM on July 1, 2013 [2 favorites]

Sounds like its time for MPesa.
posted by infini at 8:37 AM on July 1, 2013 [1 favorite]

This pops up again and again and again in discussions like these to the extent that it feels like I'm talking to my crazy old relatives. This is not script, it's bank script. This is not a company store, it is banking.

I recently left a company (for completely unrelated reasons) that was about to roll out these cards for their minimum-wage employees. In no way did the employees not take home money, and in no way did they have to only buy the company's products.

It's only "not" company scrip because the bank does not own the company outright. What with loans, payment agreements, and fees between the employee and unaffiliated companies, the distinction is getting fuzzier with every passing day.

All that being said, the cost reduction to the company does indeed come from passing the cost of accounting etc to the employee, meaning those minimum wage workers were about to get a pay cut. Which, from a certain point of view, is like the company taking money from the workers.

So, it's only taking money from employees "indirectly." Well that's OK then!

But I am sick of hearing the glib, one-line "COMPANY STORE COMPANY SCRIPT COMPANY TOWN" argument thrown around because it's meaningless. Let's focus on the things that are actually happening - companies are paying employees less - instead of getting side-tracked by similar things that we've already faced.

This is part and parcel with returning the US to a period of little to no worker rights, and is a disturbing trend. You can't just dismiss it as paranoid ramblings when you put it in context.
posted by zombieflanders at 8:40 AM on July 1, 2013 [23 favorites]

This obviously needs to be regulated and fixed. But anything that kills of the horrible evil that is check cashing services is a good thing, definitely.
posted by Joakim Ziegler at 8:42 AM on July 1, 2013 [2 favorites]

Shifting all the money upwards continues apace.

This will continue to seem like good business until half the country is flat broke and comes DEMANDING redress. Seriously, at some point there will be nothing left to lose.

And yet, all those market libertarians who support this shit will still wonder what they did wrong, and will complain if they're the ones up against the wall.
posted by zombieflanders at 8:46 AM on July 1, 2013 [1 favorite]

All that being said, the cost reduction to the company does indeed come from passing the cost of accounting etc to the employee, meaning those minimum wage workers were about to get a pay cut. Which, from a certain point of view, is like the company taking money from the workers.

The worker's pay is not increased in any amount that accounts for the company's savings. It is decreased by the amount it costs to pay him. The company saves money at the expense of the worker.

So, yeah, it's not company scrip. It's the boss's nephew sitting at a table on payday, raking a bit off the top of each person's paycheck when he hands out the wages. Sure, he incurs expenses by doing this, but the employees pay him. His uncle, meanwhile, gets to fire a couple of the guys who handled the money before his sister got married.

Is that about it?

The company store was pretty much opportunism at its finest. This is a bunch of wild dogs eating their prey alive.
posted by mule98J at 8:52 AM on July 1, 2013 [15 favorites]

This is largely a problem because the economy is moving towards cashlessness but in a very uneven, basically unregulated, lurching way.

If you're in the middle class or upwards, it's entirely possible to go through your entire day-to-day life without ever touching cash (except maybe to buy drugs, I suppose; though I've heard of dealers who take PayPal now). You can have your paycheck direct deposited and then use a check card to pull from that, in the most minimal way, or you can have a credit card and then pay it electronically or with a check if you're more traditional and want some separation. Either way, no cash.

But that of course assumes that you have a checking account. While in the past I think you could argue that it was the savings account (at a traditional S&L) that was the cornerstone of personal banking, today I think it's the checking account. Without one, you're just going to get screwed: either by check cashing companies or by shady declining-value card operators.

A paper-based cash/check economy has transaction costs, but they are mainly borne by the central bank who issues and replaces the currency, and by individual merchants who take in cash and handle it before depositing it into their bank. It is a system that is remarkably free of fees to individuals, except for the occasional checking account fee (or lost interest in lieu of an obvious account fee). This makes sense, the maintenance of the currency being one of the key responsibilities of a modern government.

But the government has largely abdicated this responsibility in the new, largely cashless and electronic economy, and has instead left it up to the banks. The result is a patchwork mess that just barely maintains lower transaction costs than paper, with the rest of the inherent efficiency of electronic banking (which is substantial) accruing as profits to the network operators. This is an entirely predictable outcome given the profit-seeking nature of the entities involved; nobody should be in the least surprised.

Fixing that problem is probably beyond a dream at this point, since it would cut too deeply into the profits of the major banks and thus into the flow of campaign contributions that grease the gears of government. But as a short-term solution, we could and should at least force companies to keep one foot in the traditional, paper-based economy, which has the benefit of several centuries of regulation and isn't as stacked against the individual as the electronic, cashless one in terms of fees.

The simple solution is to require that companies give the option of payment of all non-exempt wages either in cash at the location that work is performed, or via a check which can be turned in for cash with no fees at a nearby location (say, 5 miles, or something reasonable given the distribution of banks in the US). The latter would allow traditional paper paychecks drawn on either local or major national banks which have a retail location near the workplace, since checks can be cashed on the issuing bank. So the net effect on most companies — ones that haven't gone the shady debit-card route — would be minor, and it probably wouldn't even upset the banks to the point of rendering it a political impossibility.

It wouldn't put the shady check-cashing places out of business overnight, as there are still people who might decide it's easier to pay the fee than go to the issuing bank, and it might not stop people from voluntarily choosing the debit card rather than the traditional paycheck. There are, I suspect, a fair number of people who have the ability of getting a checking account but don't, because they are rightly concerned with the fees that they'll be hit with if they overdraw it: a debit card, laden with fees, at least doesn't have the possibility of running up several hundred dollars in overdraft fees. That's a separate problem and one largely of financial literacy, but there's no reason why we can't at least slow down the profit-driven rush towards electronic banking for the benefit of everyone except the consumer in the meantime.
posted by Kadin2048 at 8:56 AM on July 1, 2013 [23 favorites]

I agree with what everyone is saying. My only point is that there's something about the repeated comment "Company script!!" that pops up in every single discussion about this stuff that rubs me the wrong way.

I know we shouldn't forget the past, I just feel like using the company script jargon somehow lessens the danger we currently face. Like, that maybe things won't change until companies actually do use company script (i could see wal-mart doing that), and therefore because this is not actually company script, it won't reach the threshold of action required. or something like that.
posted by rebent at 8:57 AM on July 1, 2013

You all are getting distracted by the framing. If you don't have a bank account, how are you cashing paychecks? At your local check cashing parlor or Walmart.

So, Wall Street is muscling in on the check cashing/payday loan "business." I bet the fees on the debit cards are fairly competitive with traditional check cashing charges. But it does illustrate that the big banks are in the same business as the little guys skimming paychecks at the strip mall. Every time money changes hands, a bank wants to be standing, in between, taking a dollar off the top. Yet, somehow this is supposed to make the economy work so much better.

Be angry at the politicians out there telling us all that financial engineering is a path to prosperity for everyone.
posted by ennui.bz at 8:58 AM on July 1, 2013 [6 favorites]

"The largest issuer of payroll cards is NetSpend, based in Austin, TX"

Hmmmmm. I'd like to think Austin misses itself at times.
posted by buzzman at 9:00 AM on July 1, 2013 [2 favorites]

1 and 2 are some solutions that would instantly meet all the criteria/conditions that Kadin2048 has laid out so well.
posted by infini at 9:13 AM on July 1, 2013 [1 favorite]

Having a bank account doesn't do you a lot of good if your employer refuses to pay into it.

I have also heard of places that would, yes, offer direct deposit instead of the prepaid card, but the catch was they would only do the direct deposit once a month instead of every other Friday on the prepaid card. For a labor pool that largely lives paycheck to paycheck, the disruption is not even possible.
posted by ndfine at 9:14 AM on July 1, 2013 [2 favorites]

Unbridled growth = endless profit at any human cost = class warfare

What will it take for the masses to revolt? I have a feeling I'm going to find out, in my lifetime.
posted by dbiedny at 9:43 AM on July 1, 2013 [2 favorites]

That's one of those things that makes those of us in Europe think of the US as a third world country

Believe me, it's not just those of you in Europe.
posted by Steely-eyed Missile Man at 9:51 AM on July 1, 2013 [11 favorites]

"If you're in the middle class or upwards, it's entirely possible to go through your entire day-to-day life without ever touching cash"

I know someone who was mugged recently. It was in a public place, at noon. He's a middle class, never really touches cash kind of person, as you describe. The mugger was fairly pissed off at that fact. Had pegged him as a rich looking guy, but of course, rich people don't have cash. He got away with $15. Change from the farmers market.

Conversely, the next person to come into the stairwell where my friend was mugged had $400 in his pocket, on his way to pay his utility bills after his shift. I couldn't believe someone actually walks around with that much cash. And somehow uses cash to pay bills? It was like a glimpse into an alternate reality.
posted by fontophilic at 9:57 AM on July 1, 2013 [3 favorites]

I can't find the current status of the program, but if I recall correctly, the Treasury Dept. offers a prepaid debit card option for federal income tax refunds.

That program was discontinued because so few people used it.
posted by ultraviolet catastrophe at 9:58 AM on July 1, 2013

I can barely read about this without becoming apoplectic. It's my way of life these days, it seems. This shit needs to be shut the fuck down NOW. I'm curious what Elizabeth Warren thinks of all this.
posted by KevinSkomsvold at 10:03 AM on July 1, 2013 [1 favorite]

That's one of those things that makes those of us in Europe think of the US as a third world country, that you can have a huge group of workers who don't have, cannot afford something as basic as a proper bank account, but rather are forced to deal with such inefficient, rent capturing devices like checks or these payroll cards.

Apparently some of the unbanked are illegal immigrants who either don't have valid ID to open an account, or are migrant, or who don't want to use ID to establish an official record of their presence.

And a lot of unbanked are unbanked by choice. Wikipedia suggests people worried about losing their money in a bank crash because that happened back home. Or just people who grew up in an unbanked household, in the midst of lots of other unbanked households, and think of that way of living as normal even though they could open an account.

Most large American banks have low-service accounts with no minimum balance and no unavoidable fees if you get at least one direct deposit every month (and then fees for what you might think of normal services like using a teller instead of an ATM). Obviously that doesn't help people whose employers insist on not offering checks or direct deposit.
posted by ROU_Xenophobe at 10:13 AM on July 1, 2013 [3 favorites]

What will it take for the masses to revolt? I have a feeling I'm going to find out, in my lifetime.

I doubt it. You forget that Americans are exceptionally well-trained to accept this kind of shit as if they deserved to be crapped-on 24-7. If you're being taken advantage of by your employer, it's obviously entirely your fault.
posted by Thorzdad at 10:21 AM on July 1, 2013 [5 favorites]

Americans are exceptionally well-trained to accept this kind of shit as if they deserved to be crapped-on 24-7. If you're being taken advantage of by your employer, it's obviously entirely your fault.
A nation of enablers.
posted by oneswellfoop at 10:24 AM on July 1, 2013 [1 favorite]

I have begun self censoring, sorry oneswellfoop, else I'd have offered you a response to your comment about pyramids and mummies
posted by infini at 10:27 AM on July 1, 2013

Guys, I'm pretty sure this is just the invisible hand of the free market

More like the invisible middle finger.

This is the goddamn financialization of your paycheck. This is the big banks who have now found a way to steal from you directly; it's a new revenue stream for them, extracting fees so you can access the money you've already earned.

Look up "evil genius" in the dictionary, this is it.
posted by kgasmart at 10:40 AM on July 1, 2013 [4 favorites]

fyi, article is now "Http/1.1 Service Unavailable"
posted by scruss at 10:56 AM on July 1, 2013

Fuck this. If I were to throw up a quick website* to inform people of their rights, what should be on there? I'm assuming your rights vary by state, but there must be (please, please) some baseline Federal rules here. A page of rights, a page of tips, maybe let people respond via Disqus. What else would be good? Because right now the first page of Google results is each provider talking about how great their option is. I know a site on the 'net isn't going to fix things for all poor people, but it will at least give some a fighting chance.

* Ideally keeping my costs as low as possible: registering a domain and then just using a free host at Heroku unless you have a better idea.
posted by yerfatma at 10:56 AM on July 1, 2013 [5 favorites]

Is there such a thing as a basic bank account in the US?

In the US there are savings accounts and checking accounts, basically. You can get either type of account from either a bank or a credit union (CUs call their accounts by slightly different names but they are functionally equivalent). In the past you had to go to a different type of bank for a checking account versus a savings account, but that's all fallen by the wayside today.

Generally, a checking account will give you very low or zero interest but allow you to have a checkbook and give you an ATM/debit card (one that has both PIN-based withdrawal and also a Visa or MasterCard logo for signature-based withdrawals). A savings account may pay somewhat more interest but in some cases might charge fees for checks or debits once you get beyond a certain number per month (although not all do; the functional distinction between 'savings' and 'checking' accounts are getting murky, to be honest). You can generally receive direct deposit transfers into either type of account.

At most banks, they'll have various tiers of service based either on a monthly/annual fee or the minimum balance you need to keep in the account. Some banks have a direct-deposit minimum rather than a minimum average balance to make them more palatable to customers who are basically paycheck-to-paycheck in terms of their expenses (cynically, I think it is because they know such customers are likely to overdraw).

E.g., Bank of America's "MyAccess Personal Checking", which is their entry level checking account, requires either $250 a month in direct deposits (35 hrs at minimum wage) or a $1500 average minimum balance to avoid a $12/mo fee. (Which is still admittedly cheaper than having two payroll checks per month cashed.) That gets you the account itself, the ability to go to a teller at any branch, an ATM/debit card, and online bill pay. I wouldn't personally recommend it, because I think BoA are a bunch of shysters, but it's better than nothing. If you go through a credit union, there are generally fewer fees (my local CU has a zero-minimum, zero-fee checking account without the direct deposit requirement) though sometimes there's a smaller fee-free ATM network, although I think that's a smaller issue today since more and more merchants take cards, lessening the need for ATMs.

That's probably representative of a "basic bank account" in the US.

But as others have noted, you have to actually want a bank account for starters, and then you have to be able to actually open one. Those are more of a problem than the lack of banking products.
posted by Kadin2048 at 11:32 AM on July 1, 2013 [2 favorites]

> You all are getting distracted by the framing. If you don't have a bank account, how are you cashing paychecks? At your local check cashing parlor or Walmart.

Is it no longer the case that banks have to cash checks drawn on them?

When I was paid with a paper check in the 90's & my employer used a big, ugly corporate bank, I would cash the check at the local branch of that bank and walk a block to deposit some of it in my checking account. I had to show one government issued ID. [this was in Washington, D.C.]

I was able to have a checking account, unlike some of the victims in this article, but I couldn't deal with the 2 to 3 day float from deposit to funds available.

As big and ugly as my employer's bank was, it did have local branches. Maybe that's part of the problem and the reason people pay the check cashing place fees?
posted by morganw at 11:33 AM on July 1, 2013

How do you pay rent with one of these?
You buy a Postal Money Order at the Post Office -- like the one up the street from where I work,.... which is scheduled to close this year...
That's right, so instead of paying $1 at the Post Office, you pay (at least) $5 at the check-cashing place. Every month for rent, every month for electric, every month for phone, every month for water. That's (at least) $20 right there.
posted by headnsouth at 11:36 AM on July 1, 2013 [3 favorites]

Guys, you wouldn't believe the stuff going on with money & banking in Canada these days.

The penny is gone, debit and credit cards have been chipped for years, and when I sublet a place in Toronto last summer, the woman said I could just email transfer the rent to her. She wasn't even a business, just an ordinary grad student person. Canadians can just EMAIL MONEY to each other now! Instantly! On their smartphone! It's like watching a money transfer to an offshore bank account in a James Bond movie.

They're still working on the "deposit a photo of your cheque" feature, but that's coming too! You do have to have an account at a registered financial institution for any of this to work, though.
posted by ceribus peribus at 11:48 AM on July 1, 2013 [2 favorites]

It drives me nuts that employers pay their employees this way, but it also drives me nuts that so many people don't go to a credit union to open up a checking account so their paychecks can be directly deposited.

I agree. However...CU's aren't ubiquitous. They are typically very limited in how many branches they have in any given town. My CU, for instance, has only two branches, neither of which are exactly convenient to home. They also require a $25 minimum balance be kept in a base savings account (which a checking account can be added to, but the $25 must remain in savings). Of course, their ATMs are only at the two out-of-the-way branches.
posted by Thorzdad at 11:50 AM on July 1, 2013

Canadians can just EMAIL MONEY to each other now! Instantly! On their smartphone!

For $1.50!

Or I could just write a check for $0.
posted by one more dead town's last parade at 11:50 AM on July 1, 2013 [2 favorites]

> Is it no longer the case that banks have to cash checks drawn on them?
answering my own question...

Looks like drawer's banks are charging fees to cash checks when the payee doesn't have an account and though it's in dispute, it'll probably take federal action to stop the practice. Still seems worth comparing bank's cashing fee with a check cashing place.

"the drawer's contract with the bank did not authorize a non-customer check-cashing fee". A check is an order to a bank to pay someone. Charging a fee isn't really following that order.
posted by morganw at 11:51 AM on July 1, 2013 [2 favorites]

The lede is buried here. A growing number of Americans don't use banks, and rely on payday loans companies to cash paycheques, at really high rates. Debit cards are cheaper.

To reduce her fees, one employee withdraws her pay in a lump sum, which seems the most reasonable thing to do (I kind of wonder why the paperwork to opt out of the service is deemed 'too complicated', though. Are we supposed to blithely assume all McDonald's employees are unable to fill them out?)

This sort of predatory behaviour on the part of the banks is disgusting, though. All these smarts, working for anti-social purposes.
posted by KokuRyu at 11:52 AM on July 1, 2013 [1 favorite]

Is it no longer the case that banks have to cash checks drawn on them?

It has been my experience that most major banks will cash "on-us" checks (i.e. checks drawn on an account at the bank), even for non-customers, but they don't really like doing so and sometimes you have to be a pain in the ass to get them to do it. Generally if I'm going to do it, I'll just ask for the manager immediately.

However, there are ways for banks to avoid cashing on-us checks, at least at the Federal regulatory level. Again, this is just another sad example of regulatory capture and abuse. The regs were clearly drawn up originally to require banks to cash properly presented checks drawn on them, but they've found ways to slither out of even this very basic responsibility.

More discussion here and here. At least in some states it seems like more rigorous rules requiring on-us check cashing are still in force, but they may or may not be binding on national banks. (Which is just one more reason to avoid national banks in favor of state-chartered ones or CUs, IMO. You are not guaranteed to avoid doing business with a bunch of shitheels, but at least the worst of them are cut out of the running.)

The bottom line is that most banks will cash "on us" checks for non-customers, although some will either charge a percentage fee (1-5% seems popular) or a flat amount (e.g. $10). Some banks have ID requirements to discourage fraud as well. These fees are typically lower than those taken by check cashing parlors though, so it's almost certainly better to go to the issuing bank than one of them.

So as a matter of education, i.e. for yerfatma's website idea, I think it's probably not a bad rule of thumb to suggest the following order for dealing with checks:

1. By depositing it into a checking account that you own (i.e. just endorse and deposit it; this will almost never have fees and is always the preferred route)
2. By taking it to the counter and having it cashed at a bank where you have an account (i.e. cash it by using your account as collateral; might be fees depending on your account, also might imperil your account if the check bounces)
3. By taking it to the issuing bank and having it cashed (may have fees depending on the bank, no good way to tell ahead of time, not much you can do about it)
4. By taking it to WalMart ($3 flat fee under $1k, $6 fee over $1k, max $5k)
999. By taking it to a check-cashing parlor.
posted by Kadin2048 at 11:59 AM on July 1, 2013 [8 favorites]

It's also worth noting that, apparently sensing consumer demand, WalMart will also "cash" payroll cards, not just paper checks. They charge an extra $3 for this service on top of any fees levied by the card itself.
posted by Kadin2048 at 12:02 PM on July 1, 2013 [1 favorite]

I had some personal experience with this nonsense a few years back. When I started college, I got a part-time job at a nearby convenience store chain. They paid us through payroll cards, although we could switch to direct deposit at any time. The payroll cards were terrible--you had to take out money an specific ATM's, and they charged you extra fees in addition to the ATM fees. To make it worse, you can only take out so much from an ATM at once. The store ATM only let you take out $200 at once, so for a $500 paycheck, I had to make three withdrawals: two for $200, and one $100. With each withdrawal I'd be charged $1.50 from the ATM, plus an unknown amount from the payroll card company.

I signed up for an account with a local bank and tried to set up direct deposit, but it took a few weeks to go through, and every time I did it there ended up being some kind of problem. It took me well over six months before I actually got direct deposit set up. (Admittedly, part of that is because of my own procrastination.)

Then, a year later, I got a letter about a class-action lawsuit suing the payroll card company for their excessive fees, which I joined. We won, and after a few months I got a check from lawsuit. It gave me a full refund, plus interest, for all the fees they charged me. I was expecting to get a relatively small amount--$50, or maybe $100--but I was dumbfounded when I got over $650. THEY HAD RIPPED ME OFF OVER $650(!) in the course of a few months, in addition to all the ATM fees. It was an amount that approached 1/10th of the money I had made working there over that time. I looked at the itemized list that came with the check: it turned they were charging something like $2.00 for every withdrawal, and that wasn't the worse part. Balance inquiries, which were usually free on the ATM, cost just as much. And if you tried to make a withdrawal, but the ATM didn't let you--if you tried to take an amount that wasn't allowed, for instance--it would charge you anyway. So they worked

Now looking back, some of this was my fault. I was stupid. One of my co-workers hammered in to me that I needed to get direct deposit ASAP, and yet between the stress of work and school I kept forgetting about it. I had no experience at the time setting up a bank account, or setting up direct deposit, and so these things that in retrospect weren't a big deal felt like insurmountable obstacles. And all the stress I was surrounded--a new job, working nights, a new school, a new apartment, new bills to pay, new classes, being broke, etc.-- made it that much easier to keep putting it off. Had I been more established, and less overworked, none of this would have been an issue. But because I was weak, precisely because I was weak and stupid and stressed, they preyed on me.
posted by Green Winnebago at 12:03 PM on July 1, 2013 [172 favorites]

Using those cards probably also means that you can't get at the last few dollars of each pay, because you can only withdraw 20s from the ATM. So the remaining balance (after fees) has to stay on the card until it can be combined with your next pay. Nice little interest-free float there.
posted by ceribus peribus at 12:11 PM on July 1, 2013 [11 favorites]

Also, while I think the debit card method of payment is irritating and I'm not in favor it, I know in many cases employers would prefer to pay their employees via direct deposit. At least in the cases I'm familiar with, the debit cards are an alternative for employees who for whatever reason do not have a bank account into which money can be directly deposited.

An obvious solution is to help more people get bank accounts. I don't think these employers generall want to screw their employers. They just want to save money.

What if, when you're first going through your job paperwork, there's an application form in your packet to join the neighborhood credit union, prepopulated with all of your info? This would be trivial for the credit union to set up with the employer. The employer would do it to save money on cutting checks alone, putting aside the intangible benefits of all of your employees having bank accounts.
posted by roll truck roll at 12:11 PM on July 1, 2013 [1 favorite]

ATM fees are probably really profitable. What's the actual cost of storing 20s in a machine, and using electronic banking to dispense them? I go out of my way to avoid paying to get cash because it seems unreasonable. When employers were local, and used local banks, you could always cash your check locally. A lot of employers in Maine paid weekly cash for a long time. Forcing a tax like this on employees is a rotten deal. I'll vote for the legislator who addresses it fairly.
posted by theora55 at 12:11 PM on July 1, 2013

Feel better, for the better-off, banks are using all their services and features to screw them too.
posted by yerfatma at 12:19 PM on July 1, 2013

ATM fees are probably really profitable.

Actually, most banks are attempting to get out of running ATMs themselves because it turns out that it's even more profitable to charge non-bank ATM fees than to maintain their own fleet. The only banks still in the ATM game are the ones who are trying to corner the "the nearest ATM is always one of ours" market; the rest just have them at select branches and are trying to figure out ways to undercut the servicing costs.
posted by ceribus peribus at 12:19 PM on July 1, 2013

And here we have the main problem, which just goes to show how skewed laws are to the side of the employer. The law allows them to pay people in this way, they can save $21,000 so why the hell wouldn't they do it.

Does it? I doubt there's any law that specifically allows this to occur. It's an "innovation", but I think an employee might be able to sue and get the rest of their money in a more useable form - because it's not legal for employers to withhold salary, which is what these cards effectively do.

The problem is, for each individual employee they might be losing like, $5 - $20 a month, depending on how often they use their card. And who is going to risk suing their employer?

All that being said, the cost reduction to the company does indeed come from passing the cost of accounting etc to the employee, meaning those minimum wage workers were about to get a pay cut. Which, from a certain point of view, is like the company taking money from the workers.

They aren't just taking money from employees and keeping it for themselves, the total cost is far higher for the employees. They aren't cutting their employees wages, they are selling a portion of their employees wages to the banks for pennies on the dollar.

It's just straight up theft really. They are taking far more value then they are creating. They create a small value for employers (reduced costs) and then steal a large amount of value from employees (use fees far in excess of the business costs)

Oh, and of course they also collect swipe fees from the stores you use the card at. I think about 2.5%

____

This is largely a problem because the economy is moving towards cashlessness but in a very uneven, basically unregulated, lurching way.

Here's the thing: What exactly is the value in living in a cashless society? For the regular user there is none. The only reason people push it is because it means more money for the banks and transaction processing companies.

But the government has largely abdicated this responsibility in the new, largely cashless and electronic economy, and has instead left it up to the banks. ... Fixing that problem is probably beyond a dream at this point,

Bitcoin are an interesting response. Theoretically there are fees, but those fees are extremely low compared to the banking system (like tenths of a cent, and in fact at this point in time you can transact for no cost at all if you want). The problem of course is that you still need a lot of technical knowledge to set it up and use, and because transactions can't be reversed it makes it risky - and in fact you can lose all your money by making simple technical mistakes. (and the price instability, etc)

But one thing bitcoin clearly shows is that the actual costs of running a transaction network are far lower then what the banks are charging to let people access theirs.
posted by delmoi at 12:35 PM on July 1, 2013 [1 favorite]

Is there such a thing as a basic bank account in the US? Over here, there are standard current accounts (which I think are equivalent to checking accounts there) and there is a 'basic' account which banks are required to offer - no overdraft, no debit card (only a cashpoint card) but you have somewhere you can pay your wages into and your bills out of, and it's available to those with poor credit as long as they have the relevant ID to open one

Nope, nothing like this. The closest we have is variations of "student" checking accounts that are basically just normal bank accounts - some fees, and maybe with a couple extra rules. which leads me to...

It drives me nuts that employers pay their employees this way, but it also drives me nuts that so many people don't go to a credit union to open up a checking account so their paychecks can be directly deposited.

That's cute. It would be nice if they would even allow me to open one.

I had a criminal landlord who sent me to collections(without telling me!) for the cost of replacing the walls and some other stuff in an old apartment that was damaged by tons of water from the unit above flooding into my walls. It doesn't show up on any credit report i pull, but it does show up on ChexSystems. How the fuck it's on there, i have no idea. But apparently anything related to collections goes on there now even though it's supposedly only for bank-account and bank debt related stuff.

Another fun effect of this is that other than my current(shitty) BofA account which i'm thankful to already have, no bank would open an account for me as far as i know.

Do you really think your average poor, or even somewhat poor/student-ish or just out of college person who isn't supported by their parents isn't extremely likely to have some kind of being a n00b at life or just direct effect of being poor kind of collections charge on their record? Most of the people i know in their 20s have something like that on there. Whether it's unpaid medical debt, an account closed because it had a negative balance after they lost their job(oh they'll REALLY ban you for that one), etc.

A lot of the people who don't have bank accounts aren't "dumb", it's just that no bank will take them. We need some kind of obamacare type law relating to banking and finance, and one of the tenets needs to be some kind of "no banning of pre existing conditions" clause.

A lot of the posts in these threads strike me as clueless to the reality of how one-strike-you're-out a lot of these trappings of middle class life can be. Between an oustanding medical bill(which i'm slowly paying down) and that landlord bullshit that's still buried on some super sekrit record somewhere but not my actual credit report... it was really hard to rent an apartment and i was fucked out of opening a credit union or non-shitty bank account.

And don't even get me started on the ridiculous rules(some even city or state mandated!) about your income to rent ratio, or ridiculously high minimum income requirements like my cheap apartment wanting you to make 36k a year minimum to live there.
posted by emptythought at 12:39 PM on July 1, 2013 [39 favorites]

For those of you that have dealt with this - What about pay stubs? Did you get any proof of payment or tax information? How could keep track of income for taxes or prove that you were employed (for rent application or something)?
posted by Big_B at 12:44 PM on July 1, 2013

We need some kind of obamacare type law relating to banking and finance, and one of the tenets needs to be some kind of "no banning of pre existing conditions" clause.

And after it happens, and the banks have Elizabeth Warren assassinated for it, what then?

Because seriously, I feel like she's the only person who not only cares about all these kinds of things but is actually on top of them, and I'm just cynical enough to think that's way too big a threat to their profit margins for them to let her keep on keeping on. Sad but true.
posted by bitter-girl.com at 12:50 PM on July 1, 2013 [3 favorites]

Honestly, they'll come up with some answer to it(after lobbying and fighting it and filing it's teeth down) that's just like the overdraft laws being discussed in that current Ask thread.

They'll stop doing Shitty Thing, but only in this one perfect set of circumstances. You'll be able to get a bank account but not a debit card or a savings account, and the account will have annoying fees for lots of things. And they'll argue hey, a lot of checking accounts have fees it's normal! and point to their "gold accounts" neglecting to mention a lot of those fee-heavy accounts have crazy minimum balance requirements like 20k in savings or over 1000 in checking all the time or something.

Maybe i'm even more cynical, but i could see this passing like that. The bill and concept will ride triumphantly onto the battlefield full speed on a warhorse and leave on a stumbling 3 legged donkey bleeding out full of arrows.

Maybe they'll even ban fees for depositing from these cards or something, but only if you have the "Freedom account" from the bank that's handling your card, or the one that has a deal with whoever is issuing the cards for your employer.

This could happen, this could be solved, but the circlejerk has to be set up first so that all the right people can get the reacharounds. And they have to find a way to continue to get you coming and going while looking like they're being "better" to some really bemused, slightly more suicidal by the day people like Warren who try really hard to force these manipulative bullies to do something, anything right without being all forked-tongue about it.

Seriously though, these companies remind me of that one kid in school(k-12, honestly, but worse later on) who would openly do shitty things that were against the rules in spirit or even in letter, but who was an absolute master at talking their way out of it and walking away getting to do basically what they wanted with only the absolutely most minimal restrictions or punishments. It's really hard to win against a fast talker who will do anything to get their way or be right.
posted by emptythought at 1:16 PM on July 1, 2013 [1 favorite]

Now looking back, some of this was my fault. I was stupid. One of my co-workers hammered in to me that I needed to get direct deposit ASAP, and yet between the stress of work and school I kept forgetting about it. I had no experience at the time setting up a bank account, or setting up direct deposit, and so these things that in retrospect weren't a big deal felt like insurmountable obstacles. And all the stress I was surrounded--a new job, working nights, a new school, a new apartment, new bills to pay, new classes, being broke, etc.-- made it that much easier to keep putting it off.

It's not so much you being stupid, as they being evil and preying on those who are tired, stressed, ignorant etc.

(One of the priviledges of being middleclass and working a job with a good salary is not just that these things happen less to you, but also that you don't need to worry about being as financially efficent as possible all the time.)
posted by MartinWisse at 1:30 PM on July 1, 2013 [11 favorites]

The concept of paying people through a debit card account is perfectly good. The problem is that the fees charged for the service are not effectively regulated.

It's actually not even a good concept. Because the concept of the debit card is not a good concept. It's a way for banks to make more money, always has been. Plain and simple.
posted by IvoShandor at 1:33 PM on July 1, 2013 [1 favorite]

Kadin2048: "the functional distinction between 'savings' and 'checking' accounts are getting murky, to be honest"

IIRC, the functional difference is a legal distinction which has not changed anytime recently, that a savings account is limited to six transactions a month. You can't write checks against a savings account either.

For a period of several years I was completely shut out from banking. I had a checking account that had gone negative in the late 1990s and just let it go- which, by the way, NEVER, ever do. Even if you don't have the money to pay, contact the bank. Because then I got my name on ChexSystems, which meant I couldn't open up a checking or even a savings account in nearly any bank. This was in 2000, and I was making $52K a year working for a dotcom in the SF Bay Area, going to the issuing bank and getting cash on each payday (also had no car or dirvers license for the first couple years). I paid rent in cash. I was the only person on payroll who took a live check rather than had direct deposit. Finally I opened a checking/savings account at ETrade, which not only allowed that but also let me open a brokerage account.
posted by krinklyfig at 1:34 PM on July 1, 2013 [4 favorites]

The concept of paying people through a debit card account is perfectly good.

So long as your intention is to promote consumption and discourage savings, sure.

For all the hand-wringing the financial industry does about how Americans don't save enough, they sure seem to promote products (like payday debit cards) that have the effect of inhibiting savings. At least a direct-deposit goes into your bank account. Payday cards have the psychological effect of being cash-in-hand, to be spent. You actually have to jump through hoops (and probably pay a fee, since it's a card) to get any of that money in your savings.
posted by Thorzdad at 1:41 PM on July 1, 2013 [1 favorite]

I was expecting to come here and find a summary of the slooooow rollout and rule making practices (not to mention lobbying effects) and present state of the consumer financial protection legislation
http://www.consumerfinance.gov
posted by peacay at 1:42 PM on July 1, 2013

I want the church to offer a no-fee alternative to usury. Swap your "payroll card" for the equivalent amt of cash, no fee. File your taxes and get an instant refund, no fee. Payday loans, no fee.

How hard is it, legally, to set up an organization to do money orders and check cashing and such? I mean, I'm guessing it's not as simple as putting out a shingle, but the proliferation of such services also point to it not being extremely difficult. Basically, could someone like the folks at Strike Debt set up some sort of donation-run People's Bank that could issue no-cost money orders, absorb the cost of ATM fees, etc?
posted by kagredon at 1:47 PM on July 1, 2013 [2 favorites]

Here if you don't have an account at whatever bank you are at, they charge you a fee for cashing a check. Five bucks, or eight bucks, something in that neighborhood.

What my little locally owned business does is pass our checks out, let us sign them, gathers them back, and then the owner or the manager or someone they trust (it has been me before) runs to the bank and they cash each and every one of them, putting the cash into little envelopes with our names on them.

I may not have the perfect workplace, but after reading this thread, all I gotta say is they deserve a cookie.
posted by St. Alia of the Bunnies at 2:15 PM on July 1, 2013 [9 favorites]

one of my employees who got the card was unable to get a checking account, didn't have a car, and had some paranoia issues about his spending being tracked. i don't remember the particulars of how he cashed his checks before, but the card did end up costing him more in fees.
posted by nadawi at 2:34 PM on July 1, 2013

They'll stop doing Shitty Thing, but only in this one perfect set of circumstances.

That's why I think (one of) the answer is better educated customers. Think of it from a herd immunity perspective: if we educate enough people about keeping on top of their bank, cell phone provider, etc it might drive the worst of the worst out. Probably not, but worth a shot.
posted by yerfatma at 2:44 PM on July 1, 2013

Organizations like ACORN (used to) give out the sort of advice on navigating the financial sector that yerfatma was mentioning. More such informational services wouldn't hurt.

Similarly, there are community banks/credit unions various places, but an additional MeFi national credit union wouldn't hurt. I've never used MeProjects, but maybe this could be one? As I see it, setting up such an organization would require the following steps:

1. Information gathering. Probably best done in teams of 3-5, breaking the task down into manageable chunks. Information needed would include:
(a) US federal regulations governing banks and credit unions
(b) State regulations governing banks and credit unions
(c) The distinction between a bank and a credit union, and which type of structure would best serve the needs of folks without current access to banking services
(d) Demographic information on the "unbanked" (I'm not the happiest with that term, but it's short and convenient for now):
(i) how many,
(ii) where they are,
(iii) reasons for not having bank accounts (barriers to access, barriers to obtaining information, etc.),
(iv) how not having a bank account affects their day-to-day lives (maybe it doesn't for some people, but will have negative consequences for most; but the exact issues need to be identified and quantified so that we know what services are most needed),
(v) sources of income,
(vi) debts,
(vii) forseeable demographic shifts

2. More information gathering, coupled with analysis:
(a) What financial services institutions would best meet the needs of the unbanked and soon-to-be unbanked
(b) Current alternative financial services (i) available to and (ii) used by the unbanked, including (iii) pros and cons of these current services and (iv) successes and challenges encountered by other national or local organizations working to actually help (rather than exploit) this demographic
(c) Any information about strategies that have been tried (successfully or un-) for addressing the negative consequences of lack of access to financial services
(d) Local organizations in areas with high concentrations of the unbanked who MeCreditUnion could work with as partners, either already having some relevant financial expertise, or having necessary community connections to facilitate spreading knowledge of MeCreditUnion where it would be needed - this sort of an endeavour can be successful if it is a partnership, but is unlikely to be of much use if it operates on a charity model
(e) How other organizations have successfully promoted (i.e. gotten information out to the targeted communities) similar initiatives; or failures that we should avoid replicating

3. Make some decisions on how to go forward: if there's already something reasonable being organized that MeCreditUnion could join onto, why duplicate effort?; otherwise, make some decisions about organizational structure and dole out organizational tasks to get MeCreditUnion off the ground and accessible to those who actually need it. This will likely require forming a legal entity, which would mean a team of people to take care of the requisite paperwork. There would need to be a board of directors, and some staff (exactly how much staff would depend both on initial funding for the venture, and on how many community partner resources it could rely on, without putting undue strain or pressure on those resources). The biggest chunk of work will be in communications and access - figuring out how to make sure that the people who need the service know about it and have access to it (lack of reliable - or any - internet access is probably a good bet, so how will we provide in-person, physical services?). Probably choosing a couple target communities and starting small will be best. We'll also need funding. But if this thing can also function as a credit union for, say, metafilter members, then if we had enough people here join up, metafilter economic demographics are broad enough that this could provide a sound financial basis for the start-up. So making the services available via the web as well as in-person in the initially targeted areas would likely be useful.

To pull some potential timelines out of the aether: if someone who knows how to coordinate projects on metafilter wants in, we could get that set up by the end of July. Information gathering part 1 will take a little time, but is mostly library/internet research, though also consulting with legal/financial experts - end of September? Information gathering part 2 will be more difficult - I would give that six months, until end of March. As a group effort, the next planning stage will take some time, and it will be important to do it right, not just to do it fast - say another six months (deliberations and discussions via the internet, revising documents and organizational structure, etc.) - that would bring us to the end of September, 2014. Getting people for the board, filling out paperwork, etc. - ?? This timeline assumes a critical mass of interested and committed mefites working on the project for manageable amounts of time per week/month, but regularly and without slacking - a core of 10 committed folks with some relevant expertise already, or 15-20 committed folks who have to learn everything from scratch.; plus 10-50 mefites making smaller and more sporadic contributions. More hands would help, of course - especially if we want to effect some legislative change to go along with this.

Hands up if you're interested?
posted by eviemath at 3:07 PM on July 1, 2013 [7 favorites]

Are we talking Metafilter banking cards? Because that sounds pretty boss.
posted by mikurski at 3:26 PM on July 1, 2013 [1 favorite]

21K per 500 employees is tiny. That's a rounding error for most companies that size. I wonder if they got the number wrong?

If 21K is the number, it only makes me more angry - screwing employees to save on pennies? C'mon.

Welcome to corporate America, where we waste millions on computer systems that aren't even used but we will watch the cost of TP in the restrooms like a hawk. Oh, and bring your own pen. Getting a pen out of the supply closet is like stealing from the company.
posted by UseyurBrain at 4:38 PM on July 1, 2013 [1 favorite]

Kadin2048: "It's also worth noting that, apparently sensing consumer demand, WalMart will also "cash" payroll cards, not just paper checks. They charge an extra $3 for this service on top of any fees levied by the card itself."

Unless you have a WalMart pay card, in which case all transactions are free. I even used my card (still active, although I no longer work at WalMart) for direct deposit of my tax returns.

So there's one way, I suppose, the Waltons are not complete assholes.
posted by Samizdata at 4:47 PM on July 1, 2013

ceribus peribus: "Using those cards probably also means that you can't get at the last few dollars of each pay, because you can only withdraw 20s from the ATM. So the remaining balance (after fees) has to stay on the card until it can be combined with your next pay. Nice little interest-free float there."

Oh, and with a WalMart paycard, you could go to the MoneyCenter and get whatever exact amount was on the card. (I confess I had a small, but not inconsiderable, amount left on it from only using whole dollar transactions.
posted by Samizdata at 4:51 PM on July 1, 2013

I didn't see this mentioned upthread, but a worker at a McDonald's in Shavertown, PA, has filed a class-action lawsuit contending that the practice is not legal.
posted by fragmede at 5:04 PM on July 1, 2013 [2 favorites]

Big_B: "For those of you that have dealt with this - What about pay stubs? Did you get any proof of payment or tax information? How could keep track of income for taxes or prove that you were employed (for rent application or something)?"

In my case, I could get the information online.

Also, the thing I think a lot of people are missing with the "Just open a CU account and all your troubles go away!" argument is the problem of fluidity. Let's say, hypothetically here, I get paid my $325 paycheck and open a CU account. I have my $325 rent payment coming up soon, but the CU requires a minimum balance. Now what does hypothetical me do?
posted by Samizdata at 5:04 PM on July 1, 2013 [1 favorite]

Also, the thing I think a lot of people are missing with the "Just open a CU account and all your troubles go away!" argument is the problem of fluidity. Let's say, hypothetically here, I get paid my $325 paycheck and open a CU account. I have my $325 rent payment coming up soon, but the CU requires a minimum balance. Now what does hypothetical me do?

I only have experience with my own CU, but the minimum savings account amount is $5 and there is no minimum checking amount. (Also, I <3 my CU.)
posted by fiercecupcake at 6:12 PM on July 1, 2013 [2 favorites]

Do you really think your average poor, or even somewhat poor/student-ish or just out of college person who isn't supported by their parents isn't extremely likely to have some kind of being a n00b at life or just direct effect of being poor kind of collections charge on their record?

Yeah, that was me at about 25. I had a checking account at a local small bank, but when I moved to Chicago I tried to get an account at Chase and they would not allow me because of some a couple things on my credit check.

The person who tried to open my account and had to tell me they couldn't took me aside and told me to try at Wamu (Washington Mutual). I did, and they took me no problem. Hooray!

And then Washington Mutual folded a couple years later.

And all the existing accounts went to Chase, including mine. Heh.
posted by Windigo at 6:35 PM on July 1, 2013 [1 favorite]

Hands up if you're interested?

You're serious? MetaFilter couldn't even project-manage an It Gets Better video to completion, and you think we should try to start a financial institution? Your heart's in the right place but I think you are underestimating the required expertise, capital, and hours of labor involved by a factor of about 100.
posted by strangely stunted trees at 7:10 PM on July 1, 2013 [7 favorites]

I teach once a year at a University of Washington certificate program, and do occasional guest speaking at other classes related to the program. I found out that the UW is going to this fucking card route because each year, now that I'm only teaching once a year, the UW severs me from payroll and expunges my information (I found this out the hard way when my class came up and I had no way to get info on it). So each year, for one effing paycheck, I'm going to have to go through their ridiculous setup for direct deposit, or take these shitty cards instead of a paycheck or the speaking fees. I'm not hopeful that the cards aren't going to come from someone evil. And I won't get the money I'm due -- the certificate programs earn serious coin, but because it's a state institution, we're all still on pay freezes and aren't getting paid for the kind of work we do and the enrollment we generate. All of this is progress, of course, and the U's spin on it is how great it will be as a cost saving measure for all employees.

I swear to god, every day I get more and more depressed about life and how we are being ground down and down and down in this country. And those of us who want to change it are just...helpless to do so.
posted by emcat8 at 8:08 PM on July 1, 2013 [5 favorites]

I'm amazed by how ready people, in Georgia at least, are to empathize with a business, far over and above their fellow man. If a business benefits from and stupid policy, so long as they cloak it in some veneer of reasonableness, people will just go with it. All because they're willing to defend the business from being taken by some shyster. I can't help but think they're so ready to leap to their defense because they're reacting to their own id, and what they would do themselves were it unchecked.

And those of us who want to change it are just...helpless to do so.

You are not. Despite what people will tell you, despite all the people who were down on Occupy will demand, despite what all the people who think it's not worth voting, despite often-clueless comments by people who should know better, despite the hordes of those people duped by Fox News, despite all these things, you are not.

Remember to vote. If you don't like either candidate, then write in or pick a third party -- despite what people say, these votes do matter even if the person you vote has no real chance of winning, because they'll contribute to the "other" category on election results, signalling to the major parties that dissatisfaction runs high. If that's high enough, they'll have to chase those voters, or else cease to be major parties anymore. It's not much, but it is SOMETHING, and it is something in line with the amount of effort it takes to vote, that is, not much.

If you want to expend more effort than that, then get politically active. Remember you are one person though, and don't succumb to the fallacy of the savior -- that's a word I wish were stricken from the language. YOU probably aren't going to save the world by yourself, but your influence, pooled with that of other people, matters, and what's more because the effort involved is not insignificant compared to that of the legions who sit at home and watch TV, there is a kind of influence multiplier. The Tea Party is not huge, but they had an outside influence, yes because of Fox News, but also because they did get out and DO SOMETHING. The same went for Occupy -- there's a reason that, for a few months, some people were scared to death of them, and it had nothing to do with terrorism.
posted by JHarris at 10:11 PM on July 1, 2013 [3 favorites]

Thanks, JHarris. I do vote and am involved in a number of groups...as much as I can afford both time-wise and financially. But I just feel like these days it's nothing but this kind of petty bullshit, over and over -- these things like cards instead of paychecks seem small, but they are one more brick in the wall. The Ohio abortion thing, what Wendy Davis filibustered against...I don't know, it just makes me feel such despair. I talked to three separate people after the election who didn't vote because they felt it wasn't important, and I think, well, that's why these old white men keep getting elected, who are in the pockets of the bankers and the NRA and and and...

It seems so small, but when I got the notice that the UW would start paying me with a card, I was apoplectic with rage. I'm just so sick of it all. But I will bookmark your response and try to remind myself that maybe it isn't hopeless.
posted by emcat8 at 11:20 PM on July 1, 2013 [1 favorite]

You're serious?

Yes, and I have applicable project management skills, as you call it. The task would require a core group of 10-20 people who are absolutely committed (no flaking out halfway through) and can put in regular time pretty much every week, though.
posted by eviemath at 3:40 AM on July 2, 2013

If you don't like either candidate, then write in or pick a third party -- despite what people say, these votes do matter even if the person you vote has no real chance of winning, because they'll contribute to the "other" category on election results, signalling to the major parties that dissatisfaction runs high. If that's high enough, they'll have to chase those voters, or else cease to be major parties anymore.

Absent a change to the voting system, primary challenges to Democratic incumbents from the left are more effective than voting for a third party will ever be.
posted by one more dead town's last parade at 5:09 AM on July 2, 2013 [3 favorites]

fiercecupcake: "Also, the thing I think a lot of people are missing with the "Just open a CU account and all your troubles go away!" argument is the problem of fluidity. Let's say, hypothetically here, I get paid my $325 paycheck and open a CU account. I have my $325 rent payment coming up soon, but the CU requires a minimum balance. Now what does hypothetical me do?

I only have experience with my own CU, but the minimum savings account amount is $5 and there is no minimum checking amount. (Also, I <3 my CU.)"

Pretty awesome CU.
posted by Samizdata at 5:40 AM on July 2, 2013

Absent a change to the voting system, primary challenges to Democratic incumbents from the left are more effective than voting for a third party will ever be.

Yes, especially in increasingly gerrymandered constituencies. It sucks, but does at least mean that you can elect very liberal people where the vote is concentrated.
posted by jaduncan at 6:00 AM on July 2, 2013

Please don't start a metafilter credit union. The problem is not that there aren't options out there. The problem is that there's no connection between non-predatory financials and the people who need them. Education is what's missing. Every town has a credit union. Every computer has online banking options. Every urban area has some kind of nonprofit financial education seminar going on pretty much every week. But they're not reaching people.

This debit card payment problem compounds that disconnect, by taking advantage of people who have few options and even less financial savvy (who is going to understand their payment options and make a stink about it the day they're filling out paperwork for the only job they can get?).

I work in marketing for a local credit union. We're a good-sized institution and we do a bang-up job as a Community Development Financial Institution (you don't have to be primarily a financial to get that designation) but even with our budget there's absolutely no competing with the predatory lenders. There's a payday lender here that advertises all the time with "testimonials" from people who actually say "I tried to get a loan from my credit union but they wouldnt' even talk to me" which would absolutely never be the case with a CDFI but it has been the case with the big banks and even financially savvy people don't understand the difference - hell, my tax accountant asked me to explain it to him!

We don't need a vanity credit union. We need to educate people about their options and connect them with organizations that don't want to bleed them dry. And we need a new Supreme Court that doesn't continue to give corporations new tools for squeezing out more blood. But that's another rant.
posted by headnsouth at 6:07 AM on July 2, 2013 [30 favorites]

Thank you, headnsouth, your CU work is fighting the good fight.
posted by jaduncan at 6:14 AM on July 2, 2013

I agree that it's best to support alternatives that are already in place, like the many credit unions already out there. But there are access issues beyond just the people who need banking services not knowing about credit unions, as a number of folks have described in this thread. Not having a credit union branch or bank branch in one's neighborhood being one of the biggies (same issues there as with food deserts), complicating issues preventing people from being eligible to open an account, banks or credit unions not providing the specific services or collections of services needed by very low income people, etc. Some of these are structural/ideological issues, give that many of the credit unions that I know of are based around membership groups in a way that I think ends up excluding a significant proportion of the unbanked. But! I am talking out of my ass and you are the expert here, headnsouth. How widespread is the availability of the sort of financial services that very low income people need? How many credit unions have branches in neighborhoods with a high proportion of unbanked? What sort of work and funding would be needed to better connect up the unbanked with currently available services? Given your experience, how would the outrage our fellow mefites have been expressing in this thread most usefully be directed?
posted by eviemath at 6:32 AM on July 2, 2013

I can't speak for other people, but whenever I've looked into credit unions (local ones, not internet ones which, frankly, don't seem all that different from regular banks) they've always had requirements (place of residence, place of work) that I don't meet. Maybe if they were more inclusive, more people would belong to one.
posted by Steely-eyed Missile Man at 6:53 AM on July 2, 2013

Maybe the MeFi CU Wiki then?
posted by Samizdata at 7:00 AM on July 2, 2013 [3 favorites]

What sort of work and funding would be needed to better connect up the unbanked with currently available services?

You would need a bottomless well of money, unfortunately. Trends are toward fewer brick-and-mortar branches rather than more. They're insanely expensive to run compared with online banking, mobile banking, and even the limited text-based banking available for non-smartphones. The education necessary there is daunting, as is the cost (you're assuming people have reliable, affordable internet access at home or on their phones).

My CU is developing a branch in such a "financial desert" and it wouldn't have been possible without complete, enthusiastic buy-in from every single person involved - the city (CDBG funds), the nonprofit that owns the property, the community/neighborhood groups, other businesses that are doing pro bono work on it, the feds, and our CEO who has committed more in personnel hours than could ever possibly be recouped. Our CU has three people in marketing, and eight people in community development. There's just no easy/cheap way to make it happen. It's a huge, long-term investment.

And that's just to put the building there, that doesn't get people in the door. So the new branch will also have a community meeting space, we're also building a pavilion on the property so the weekly farmer's market at the nonprofit has a permanent home, one of the offices will be set aside for a community policing rep to do paperwork and meet with people, etc. There's a small grocery store across the street that closed last year when the elderly owner died and his children didn't want to keep it running. The only real grocery store in the area, so we're trying to find buyers/get funding/etc. to get that open too. And on and on it goes.

Given your experience, how would the outrage our fellow mefites have been expressing in this thread most usefully be directed?

They can start by moving their money from Ally and other online banks to whatever local institution does the most good in their community. Online accounts mean better rates (I have an IRA CD that's about to mature and I really, really, really want to move it to Ally!) but that's at the cost of local jobs and local investment. They can lobby against pro-corporate, anti-human legislation in their states. They can lobby congress to not add additional taxes to credit unions!

(If anyone wants a link to a good overview of our efforts they can memail me, don't want to put it up here. As proud as I am of the work they do, I don't represent my employer on MeFi.)
posted by headnsouth at 7:00 AM on July 2, 2013 [5 favorites]

Steely-eyed Missile Man, MeMail me your address and I will find you a credit union!
posted by headnsouth at 7:02 AM on July 2, 2013 [1 favorite]

Perhaps a MeFi credit union broker would be less work to set up than a MeFi credit union.
posted by flabdablet at 8:31 AM on July 2, 2013

They can start by moving their money from Ally and other online banks to whatever local institution does the most good in their community. Online accounts mean better rates (I have an IRA CD that's about to mature and I really, really, really want to move it to Ally!) but that's at the cost of local jobs and local investment. They can lobby against pro-corporate, anti-human legislation in their states. They can lobby congress to not add additional taxes to credit unions!

You're absolutely right, headnsouth. As must as I talk big, I still keep my money with BofA ("it's so convenient! And I get great deals on my credit card!") and Ally Bank ("What great interest rates!"). My company has a great credit union that is servicing a car loan for me, and I really appreciate the amazing service, but in the end I'm being as selfish and me-first as corporations who only look at their bottom line, not the effect on the community.
posted by muddgirl at 8:39 AM on July 2, 2013 [1 favorite]

The Internet Archive has started an online credit union.
posted by yerfatma at 9:01 AM on July 2, 2013 [4 favorites]

For being the home of so much 'innovative banking', American consumer money management is like something out of the 1950s. Bizarre.
posted by Happy Dave at 9:50 AM on July 2, 2013 [2 favorites]

The Internet Archive has started an online credit union.

I got pretty excited reading that, but it's still a community charter limited to its service area in New Jersey.
posted by headnsouth at 9:55 AM on July 2, 2013 [1 favorite]

Ah, thanks. I just saw the link and thought of this thread.
posted by yerfatma at 10:59 AM on July 2, 2013

For being the home of so much 'innovative banking', American consumer money management is like something out of the 1950s. Bizarre.

Not really. It's "innovative" in the myriad ways they can siphon-off consumers' money.
posted by Thorzdad at 4:09 PM on July 2, 2013 [1 favorite]

morganw: "Looks like drawer's banks are charging fees to cash checks when the payee doesn't have an account and though it's in dispute, it'll probably take federal action to stop the practice. Still seems worth comparing bank's cashing fee with a check cashing place."

Yes, I about had a case of apoplexy the first time I ran into this, at Bank of America. What can I say, I was used to paying for things in cash, so that's what I did. First they started fingerprinting, then charging fees. You'd think banks would have to honor their customer's payment orders and not decide one day to discount them as if we were back in olden times before the Federal Reserve System. We got away from that shit for a reason.

More directly on topic, it's become clear to me that these pay cards are actually a really good idea coopted by jackasses who need some serious regulation because they have a complete lack of self control. It is absolutely a great thing that the unbanked can have access to a no-monthly-fee debit card that they can use to buy things, pay (many) bills, or whatever else that most all of us use credit or debit cards linked to a bank account for.

The problem is the abusive practices being perpetrated on a vulnerable population, these being but one tool in that war. Note the high fees levied on many of the poorest accountholders at the largest banks. These days, having a bank account doesn't even save you from abuse because the regulation is so lax even after Dodd-Frank.

So yes, there absolutely needs to be a better system for people to get cash money off these cards without paying fees, but they are not in and of themselves a bad idea. It beats the hell out of forcing people into the hands of the typical check cashing outfits. Right now that's only true for those who can successfully navigate the pages of fine print and avoid fees. If we had any semblance of reasonable regulation on the subject, fees would be difficult to incur on these cards.
posted by wierdo at 10:02 PM on July 2, 2013 [7 favorites]

There's a payday lender here that advertises all the time with "testimonials" from people who actually say "I tried to get a loan from my credit union but they wouldnt' even talk to me" which would absolutely never be the case with a CDFI but it has been the case with the big banks

Wait, so your credit union was required to give loans to people with bad credit?
posted by corb at 12:41 AM on July 3, 2013

No, corb, but they will at least talk to someone who comes in the door looking for a loan before refusing them.
posted by Elementary Penguin at 2:47 AM on July 3, 2013

Wait, so your credit union was required to give loans to people with bad credit?

My credit union offers free credit counseling, credit builder products/programs, micro loans with part of the loan held in reserve while a payment history is established, an auto loan program that includes financial education and vehicle maintenance training. That product goes to people with an average credit score below 600 and it has a lower default rate than our conventional auto loans. People who are a higher credit risk are going to pay more in interest, but it doesn't have to be usury. The right way to work with vulnerable populations is to make them less vulnerable. That benefits them of course but it's also good business. If you're taking the long view, that is. A quick buck off the backs of the poor is easy, but at a credit union, lenders live in the same place where they lend.
posted by headnsouth at 4:11 AM on July 3, 2013 [15 favorites]

In this troubled economy, it's only a matter of time before we are asked to do our duty and agree to the fee!
posted by a snickering nuthatch at 5:43 AM on July 3, 2013

I had no experience at the time setting up a bank account, or setting up direct deposit, and so these things that in retrospect weren't a big deal felt like insurmountable obstacles.

This is 99% of how people get ripped off in a modern society; those that know (through opportunity or effort) take advantage of those who don't (through lack of opportunity or lack of effort.) This is much more insidious than it appears because "effort" in this case requires someone to know/discover that there is an effort to make, and that the effort is within their means to produce results.

If you're born into a family that fixes cars, for instance, you'll live your life understanding how to fix cars, or at least know that if you wanted to put the effort in, you'd be rewarded with the benefits your family has already enjoyed. If not...well, you'll either make the discovery on your own (relatively rare) or you'll see a car as a mysterious device that is far too complicated for anyone like you to understand, and you'll probably be taken advantage of. Clothes are another easily relatable example, inasmuch as people who sew think we're all crazy for buying ready-made, ill-fitting clothes off the rack for too much money, but everyone else thinks there's no way they'd ever be able to sew well enough to make their own clothes (but of course with enough effort they probably would, at least from patterns.)

This extends into every aspect of all our lives. Everything you take for granted, someone else goes their whole life without figuring out, and everything you think is too complicated for a person to understand, someone else understood it well before they turned 18. It is why the privileged tend to stay privileged, and why so many people are thought of as lazy when what they really are is unfamiliar with the opportunities they could be taking advantage of.
posted by davejay at 9:58 AM on July 3, 2013 [10 favorites]

For being the home of so much 'innovative banking', American consumer money management is like something out of the 1950s. Bizarre.

Not enough education. We don't teach it in schools any more, and lots of families don't know how to manage their own money (or worse, hide money management from their kids for cultural reasons.)
posted by davejay at 10:06 AM on July 3, 2013

Late to the thread, but has anyone looked how students are receiving their financial aid and student worker money through vendors like Higher One? Students also seem to be limited in their withdrawals and some of the traits seem similar to the article's description.
posted by jadepearl at 7:19 AM on July 5, 2013

And after it happens, and the banks have Elizabeth Warren assassinated for it, what then?

Elizabeth Warren Hits Big Banks Where It Hurts, New Bill Would Restore Glass-Steagall

Uh-oh.
posted by homunculus at 1:24 PM on July 12, 2013 [2 favorites]

Yea, i give it a few months before a freak lug nut failure causes her car to flip and explode on the highway or something. "we never knew that model had issues with exploding in that situation until this happened, the issue never presented itself in testing said foobar car company representatives"

Alternatively, this bill get get ping ponged around until it's so gutted that it doesn't do all that much of its stated goal like obamacare.
posted by emptythought at 3:19 PM on July 12, 2013

NBC Censors Video of Elizabeth Warren Taking CNBC to the Woodshed
posted by homunculus at 2:16 PM on July 19, 2013

The troll inside me wants to believe that someone at NBC who wanted this video to blow up suggested to some higher-up going "god dammit, what can we do about this!" "oh, we could file a DMCA claim and they'll take it down!" knowing full well that would cause a huge internet explosion while making it appear that they did their job.

Maybe it's not true, but it's a more interesting story line in my head.

Also, god damn. That burn is like watching someone land one of those 75 hit combos in a fighting game. The follow up comment is like the final move where it pauses and then the other guy gets thrown into space or the engine of a nearby jet or something.
posted by emptythought at 3:57 PM on July 19, 2013 [1 favorite]

...

I never knew how badly we needed a fighting game with Elizabeth Warren as overpowered secret character until now.
posted by JHarris at 2:00 AM on July 20, 2013 [1 favorite]

Looks like some Occupy Wall Street-affiliated folks already had my idea, or something similar: The Occupy Money Cooperative
posted by eviemath at 7:07 AM on July 22, 2013

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