That'd make US law contradictory.

The reason the number of unbanked keeps going up is that post-9/11 the USA kept tightening anti-money laundering requirements. These require banks to refuse to bank with clients who they suspect might be criminals, on pain of the banker becoming a criminal themselves. That means once people fall out of the banking system for whatever reason and have to live in the cash economy for a while, they cannot prove where their income came from and are thus presumed guilty by default.

To fix that you'd need to make US AML laws much less punitive. No political appetite exists to do that.

US AML laws are already contradictory in and of themselves. The problem is that they serve two contradictory goals. From a sanctions and geopolitical perspective, Washington wants to shut bad actors out of the US banking system, which means they punish banks that retain "bad" customers. But from a law enforcement perspective, typically investigators much prefer accounts be kept open, as that is effectively a running financial wiretap on a target. When you close the account, you give up on new information and potentially alert the target (a good example was that without even closing the account, Paul Manafort walked away from his Bank of Cyprus accounts after merely being questioned by a bank officer). So the contradiction exists not just between AML and other US bank laws but within AML regulations themselves.

Frankly as someone who used to work in the field I found this insanely frustrating and would constantly hate that I was forced to get rid of customers who I wasn't positive had done anything wrong to protect the bank, and if they HAD done something wrong I was basically destroying law enforcement's lead and possibly alerting the target. But that's the current effect of the laws. They definitely need to be fixed not just for broader goals like banking inclusion but to effectively do what they're supposed to do in the first place.

It's not only that, the entire concept of anti-money laundering as an anti-terrorism tool is basically a farce.

The anti-money laundering laws came out of domestic organized crime. After the feds got Al Capone on tax evasion the mobsters started paying their taxes but the feds still wanted to go after them that way, so the concept of "money laundering" was created from whole cloth.

The problem is it never really worked once the crime bosses had an accountant on payroll. And organized crime itself was primarily an artifact of Prohibition and the Depression and has been on the decline ever since. The WoD is probably the only reason it still exists at all, but unlike Prohibition, that is international. Which means the criminals can export the money from the US as cash or precious commodities and don't have to deal with the US banking system at all.

With terrorism it's even worse. If some prince in the middle east is using oil money to fund terrorism, the money is never even in the US to begin with.

It's the textbook example of a law whose costs outweigh its benefits but no one wants to fix it because they don't want to look soft on drugs/terrorism.

It still happens a lot: https://www.justice.gov/usao-edny/press-release/file/1003201...

Old school mafia are using check cashing places to launder money.

> It still happens a lot

What, charging mobsters with tax evasion? It might still work on the occasional mid-level guy who was dumb enough to not pay his taxes. When was the last time a top-level crime boss was charged with it?

> Old school mafia are using check cashing places to launder money.

Of course they are. That's why the laws against money laundering are harmful. Most of the people you're trying to catch with them are adept at navigating around them, so all they really do is molest honest citizens/businesses and degrade privacy.

You can prove where your income comes from by just showing a couple months worth of pay stubs. The actual reason that people are most commonly denied new bank accounts is due to bouncing multiple checks on a previous account.

https://www.nerdwallet.com/blog/banking/blacklisted-by-chexs...

God cheques are an anachronism. I can't believe they persist in this day.

It feels like checks are barely hanging on. I started using Simple 4 years ago when I switched jobs, partly because it seemed like more and more places were posting signs that they didn't take checks. Since Simple doesn't really have checks, except ones you have them send by using the website, that seemed ok.

In the 4 years since, I've had a few instances where I needed checks. I have a plumber I like, but he isn't really a businessman, and so he wants cash or a check when he's done with work. The only tradesman I've dealt with that wasn't happy with me sending a check from Simple. He does good work though. I have some bills I pay via check, like the yearly pool membership, that I can just use Simple to send out.

I've been pretty happy to not have a check book. Especially after I had a $45 check I sent someone that got stolen from their mailbox and cashed for around $2,000 each, twice at different branches of my bank. Thankfully, I noticed within a day or two, and it was only a big hassle.

So, give them bank accounts without checks. I haven't used a check in... maybe a decade? Despite being a citizen of America, one of the few places where check's are still a (marginal, fading) thing.

Some people can. Some people being criminals will be told they forged all that.

Minimal banking services to every American? Postal banking.

http://www.campaignforpostalbanking.org/know-the-facts/

Account portability works exactly like this in the UK. I can't say that banks here provide a much better service than I received in the US.

> I can't say that banks here provide a much better service than I received in the US.

Really? "ATM" withdraws are free in the UK, money transfers are instant, checks are dead, and account data easily downloadable as e.g. CSV.

I've had US and UK accounts and it is night and day. Who were you banking with in the US who gave you as good of an experience as a UK bank because I'd love to move to them?

Ally is Good. Schwab is another one. The problem is that you will be hard pressed to find a excellent bank that has a large physical presence.

Get a local credit union and you should be more than happy.

Another shout out to Ally. Not affiliated with them; have just used them for many, many years. They reimburse ATM fees (used to be unlimited; now capped per month); no minimum balances; and have interest checking.

The only times I get frustrated are when you need a lot of cash (think buying stuff from Craigslist). Incoming wires are free; outgoing wires are reasonably priced (and is how I submitted funds to the attorney in a different state to close on our house).

The few times I’ve had to contact customer support my wait time was in the single digit minutes.

Many other things I could add, but I already sound like a shill. Schwab is also great for ETFs. No experience with their other banking products.

I never lived in the UK but I've heard good things about Monzo and Starling.

If you look into the fintech space, there's a stark difference between Europe and the North American market. We have several players entering retail banking every year in Europe, and that's partly thanks to regulations.

+1 for Monzo. Used it since it was in beta and now as my main account. Not quite ready to shut my other account yet...but maybe in a year or two

Yeah, and when did cell providers stop sucking...?

What exactly prevents people from cashing checks at the issuing bank, or walking into a bank or credit union with their paycheck and opening an account? Or cashing it at a Wal-mart or a 7-11, which have low fees? These people may trapped in poverty, but ultimately not by the check cashing/payday loan business.

Many banks have a tiny number of branches so good luck finding one to cash a check. Low fees are rarely low when you're talking a minimum wage income. Walmart's 3$ fee for anything under 1000$ works out to 1/2 an hour of work. Picture spending 1/2 an hour of your salary every 2 weeks simply to get paid. Now make that worse by having 3 jobs...

I had no idea this was the case. That's shocking.

If I need cash, I walk into a Chase branch [Not my bank, but conveniently near a Thai Restaurant I like to visit] and just ask for cash advance against my VISA card. Done by a teller, there's no ATM fees.

Being poor is very expensive, and I think a lot of people have no idea just how crazy and awful finance in small numbers is and what that does to people's lives.

_Nickel and Dimed_[1] is oldish, but still highly relevant, if you want to read a depressing book.

[1] http://barbaraehrenreich.com/nickel-and-dimed-by-barbara-ehr... https://www.amazon.com/Nickel-Dimed-Not-Getting-America/dp/0...

Which cc does not charge interest before the thirty day grace period with cash advance?

I think the intent was to say that it avoided ATM fees, but not anything about other fees.

Use a debit card which has no fees or do us banks not offer those

Is it a cash advance if you're using a debit card? Isn't that just a withdrawal.

The op terminology must have been off.

CC cash advances are almost as bad as payday lending, why on earth would you pay a fee of 3-5% of the amount borrowed and 18-25% interest that compounds daily starting on the day the advance clears? Just use an ATM and take money out of your checking account..

Regulations cost money. Unfortunately that disproportionately falls on the poor. :-(

That's a poverty problem not a banking problem. If you keep a $1000 balance in a checking account, your bank is making $5/mo from your interest.

Like every other thing poor people can't afford, it could be solved by UBI/EITC/negative income tax, or direct service if you like big government, but banking isn't special.

High fees. I had to do that at Key Bank when I sold and bought and house due to some screw up.

IIRC, the fee was $10, I had to provide my ID, secondary id and provide a fingerprint.

You can't cash checks at the bank they were drawn off for free anymore, since about 10 years ago.

I've never heard of this. How could this possibly be true? The check is a note to the bank of a client that they want to pay someone. The bank is providing the service to their client, not the recipient. What bank?

This article is from 2004: http://tucson.com/news/local/check-cashing-fees-starting-to-... -- so it's been going on for awhile.

I remember hearing someone sued BoA(?) for "failure to honor the face value of a check" and lost. After that, fee's started spreading. I can't find an online reference to this story.

In the UK at least all the supplied cheques I've seen for many years are pre-approved crossed. That is, they are explicitly not to be paid to the bearer in cash, but only into an account held by the named recipient.

This is the case in Australia too, cheques come with “|Not Negotiable|” pre-printed on them, meaning they cannot be cashed, only deposited to the recipient’s account. The words mean something completely different in the US, and writing them actually completely voids the cheque.

I wonder if you could put “for deposit only” in the endorsement spot to get the same effect. But why would you want to dictate how the check is used?

Here’s the best explanation I’ve found:

https://boards.straightdope.com/sdmb/showpost.php?s=0a4ad0b9...

Bank of Slumerica does this for one. It's funny because on the face of it, they're inducing their customers to commit fraud every time they write a check!

Wells Fargo et all will charge you $10 to cash even with their name on it.

Chase charges $8 to cash their own check. I asked if they’d waive it for the disabled beneficiary of an FBO (for-the-benefit-of) account. They wouldn’t.

Big banks suck.

Use credit unions or small, local banks and you likely won't have this sort of problem.

When someone needs to able to walk to a branch (bus fare both ways is even worse than most check cashing fees) only a very well placed small, local bank will do. Big banks, not to mention check cashing and Western Union outlets are much more dense on the ground. TANSTAAFL.

The credit union I am a member of (starone) charges $5 for non-members to cash checks from members.

Well, they have had that in the UK for sometime now. The system there was already far more efficient than the US one when this was introduced - which is not surprising, it´s mainly a technology issue. The only thing it really changed was that deposit accounts received a slightly higher interest rate up to a certain limit, provided that you pay your salary into them.

So based on that, Account portability is not whatever it is that is stopping the US banks providing a service to the entire population.

This is how it works in Europe, or at least the EU.

Very few people ever switch an account anyway. Something loke 0.4% of the market have evere done it.

PSD2 is supposed to make it even easier but I guess we'll see.

Where could I find more information about that stat?

I think it was 0.42%... If you look into why the EU came up with PSD2 you should find out some more about it.

Honestly can't find it now. It may just have been something I heard around the office (I am currently consulting with Open Banking in the UK but do not speak for them here or anywhere else)

Cool, I'll try find it. I'm looking into PSD2-related things for my company at the moment.

I completely agree, I've been using the same bank for about 15 years now and I'm sure if I looked around I could find better deals but I simply can't be bothered to go through with it. It's not an American issue though, as far as I can tell the situation is nearly identical in Europe.

In the UK, at least, there are switching-services which aim to make it painless to change your bank. Your direct-debits, and bills get switched to the new provider, etc.

I've never used such a service myself, but I have heard from friends that the process was pretty painless.

Interesting, I've never heard of a similar service in France but then again it's not like I've been searching.

There is. The banking portability law is even called after your president :)

Most banks offer it, or at least claim to. However there's still no penalty for banks that don't do their job properly. But it shouldn't stop you, transferring all your SEPA direct payments isn't that hard even if you do it yourself.

Thank you for the tip, I'll be sure to look into that the next time my bank annoys me, which statistically shouldn't take too long.

Get a referral or wait for a promotional offer, the big players (Boursorama, Fortuneo, ...) regularly offer 130~150€ sign-up bonuses, which is a decent compensation for the time you'll invest switching banks.

There's no need to switch "accounts". All you need is account number portability, so you can switch over your direct deposit and autobillpay. If you have a low balance, you need a way to fallback, so the number can draw from both accounts, that's the hard part.

There's no need to do it in 2 days -- take as long as needed for securr setup, then use both accounts for a month.

Wouldn’t that be relatively difficult to accomplish when routing numbers are tied to account numbers, as well? My admittedly naive understanding tells me account number portability would require routing + account numbers to smoothly change things. I’ve never setup an EFT/ACH transfer without being required to provide both.

The inter-banking transfer systems are a major source of oligopolization. And the barriers to entry imposed by the government are huge.

You won't get a competitive market if you don't solve those two. But it's not even clear if it would be benefic to lower the barriers to entry.

The crypto dream is that you leave banks all together. It is happening slowly.

I've had bank accounts in three different EU countries. No bad experiences. Never paid any fees if salary went to the account. Free money transfers to anywhere within EU. Free credit card with no interest if paid back next month. True 2-factor authentication with physical one-time TAN list. Account insured against bank's bankruptcy up to 100k.

I have zero interest in seeing blockchains enter any financial services I'm part of.

You have a very narrow world view if you are your entire sample.

I was trying to imply that blockchain is not the only way of fixing the broken US banking system, and moving to blockchain could perhaps limit your options of interoperating with other parts of the world that have managed to build a user-friendly banking system. It's possible that blockchain could form a basis of a financial system for a limited group of people, but hoping it to be a foundation for a widely accepted system is from my perspective a misguided attempt to apply a technical solution to something that doesn't need one.

I was making the point that bad experiences are commonplace throughout the world. I have worked with people that can't afford bank accounts in the Phillipines and I have had my own bank accounts frozen and had assets stolen by my banking institution, and I live in a first world country and am a law abiding citizen. This is not even to speak of central banks and the encroachment of surveillance and impingement of economic liberties that I believe to be self evident. I stand by my statement that you should widen your view point since you have not experienced the things that make Bitcoin valuable.