No, I want to hear the warped logic.
Then again, it may just be: no income for the banks, they go bust, who will provide banking services to poor people? kind of retarded mental gymnastics.
Crux of the argument?
Profit margins are very small on small personal bank accounts. If NSF fees are reduced, how ever will we profit from these tiny accounts?!
One bank made only 49 billion profit last year, up from 48 billion in 2022. Why won’t somebody think of the banks!?
Oh no, anyways credit unions exist and rarely have these issues
kind of retarded mental gymnastics.
It’s 2024 you know that’s not cool to say dude
I honestly don’t understand who is supposed to be offended by the r-word. Do people actually identify as that and take offense? shouldn’t they be just as offended by any other term that denotes a lack of intelligence?
It’s 2024 I do not need to explain this. Google it or something.
Credit Unions is the answer if anyone actually believed this could even be slightly possible.
I more assume “banks will stop offering services if they make less” or “those hard limits teach you to not go below 0” which are dumb
Ugh I feel dirty for reading the article but the argument is your first option: “limit bank profits and they’ll stop doing business with poor people.”
plaintext
These people are far and away the heaviest users of bank overdrafts. The Financial Health Network, a personal finance nonprofit, says the group most likely to overdraft includes “financially vulnerable” households that struggle to pay their bills every month and typically make less than $30,000 a year. Almost half of financially vulnerable households with checking accounts overdrafted in 2022, and of that group, two-thirds overdrafted at least three times, one-third did so six or more times, and one-fifth overdrafted 10 times or more. With an average overdraft fee of $26.61, hundreds of dollars in fees can land on the most cash-strapped customers. Capping those fees — possibly as low as $3 — would be a huge boon to families who really need the help. Who could oppose that?
Well, as with any nice-sounding policy, it’s important to consider the alternatives, both for the customer and for the banker.
For depositors, overdraft fees can be an expensive alternative to even worse options, such as payday loans or having their electricity shut off (and paying a reconnection fee to turn it back on). And “the best of bad alternatives” can also be sort of true for bankers, who must find some way to defray the cost of providing what is basically an unsecured loan to people who are, as we’ve seen, often financially struggling and might be unable to repay the money. The fees also help pay for “free” checking (which costs banks quite a bit of money to provide).
If we cap overdraft fees, how will banks make up the lost revenue?
From profits, you say, and fair enough, but Patrick McKenzie, who writes the Bits About Money newsletter, points out that the reason your bank is so obsessed with getting you to sign up for paperless statements is that the profit margins on checking accounts are so thin, they can be meaningfully improved by saving the cost of 12 stamps a year. “Margins on small bank accounts are very thin,” he wrote recently, and “credit losses can easily be larger than several years of them.”
Now the government wants to make those accounts even less profitable. It seems possible banks would look to limit their losses by getting rid of those customers or making up the revenue somewhere else — or possibly both. This seems to have happened in the past, judging from what we saw when federal regulators preempted some state fee caps in 2001. According to researchers from the New York Fed, the exempted banks both raised overdraft fees and expanded available overdraft credit, while lowering minimum balance requirements. The rate at which checks were returned for insufficient funds declined by 15 percent. And the share of low-income households with a bank account rose by 10 percent, suggesting that minimum balance requirements had kept those households from opening accounts.
That doesn’t mean that no one would benefit from this rule. High overdraft fees can also deter people from opening a bank account, and it’s possible that effect would outweigh any contraction of credit. The financial industry has also changed a lot since 2001, with nonbank alternatives, such as Cash App, that might offer the marginal bank customer a better replacement than an old-fashioned check-cashing store. But there would still likely be winners and losers, and I don’t know whether the former’s gains would outweigh the latter’s losses. I’m not sure the administration does, either.
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A couple decades ago I opted out of overdraft protection for this very reason, so the bank would just reject the charges, and then hit me with a $36 fee anyways. Fucking criminals.
It’s even more fun when they transfer from your savings account to cover the overdraft and charge you the overdraft fee anyways.
I encountered this enough with my CU; after kicking my college-induced points-fueled credit card habit; that I just decided to switch to a fee-free checking account with capital one. Physical branch locations be damned.
I could only tolerate so many multiple $3 charges a day, with no specific notification, for a service (a savings transfer) that would be completely free if I were to initiate it. And then “we can refund up to 3 overdraft charges but you should monitor your accounts more closely”. lol. Keep your $9 and shove it, I shouldn’t have to babysit my fucking credit union to keep their hands out of my pockets as I’m going through a major life transition like this.
Anyways. Capital one’s verification process has been a bit of a headache but I’m currently trusting the process.
Overdraft is optional on every account I’ve had tbh.
It ought to be defaulted to Off.
I’ve turned it off every time but I have to ask every time. They don’t even tell you it’s default to on cause they wanna collect the fees.
Megan McArdle is the dumbest bitch in the world. I refuse to click on anything she writes because her shitty takes don’t deserve views. She’s actually a big part of why I unsubscribed from WaPo (that and the whole neolib vibe) because I want zero of my dollars benefiting her.
I have no desire to read but I bet her argument comes down to “if they don’t have overdraft fees then they will go into deeper debt by overdrafting more and that is worse somehow”
All the extra debt they get could have been bank fees, why don’t you think of the starving CEO’s, else they can’t afford their Beluga Caviar and Dom Pérignon dinners.
Usually the defense behind banks ‘allowing’ overdrafting is that surely you wouldn’t want to miss paying a bill because your paycheck hasn’t landed yet. So the argument here would probably be if you cap overdraft fees, then banks won’t allow overdrafting anymore and then poor families will have their electricity shut off and get evicted.
So the argument is essentially if the poor don’t have overdraft fees, someone else like the middle class will have more fees?
I cancelled my wapo subscription over similar. Glad to be rid of them honestly.
Megan McArdle is the dumbest bitch in the world.
Grandma Lauren Boebert exists, you know
You know what, let’s just go ahead and say there are many, many dumb bitches (men included) in the Republican party who are constantly fighting for the crown.
Checked what else she has written, the next article along was seriously “How far should we be willing to go to silence Nazis?”
She’s worried that if Nazi’s can’t have their free speech then they’ll come for the white supremacists who don’t identify as Nazis next…and that apparently sets a very dangerous precedent!!
First they came for the Nazis, and I didn’t speak up, for I wasn’t a Nazi.
Then they came for the white nationalists, and I didn’t speak up for I wasn’t a white nationalist.
Then they came for the fascist insurrectionists, and I didn’t speak up for I wasn’t a fascist insurrectionist.
Then noone came for me because I wasn’t a fucking monster, and by that time, there was no monsters left to whine about culture war bullshit.
Then the country was pretty damn great, actually, and we enjoyed our new found freedom and age of equality and prosperity.
When we start rounding up nazi’s and white supremacists, I will absolutely speak up! I will be waving flags and walking the street. I will be shouting and going to gatherings where people will be shouting. And the shouting will sound something like “woohoo!”
Has anyone stopped to consider that maybe she’s just a ragebait shill? and everyone angry about her and talking about her are doing exactly as she intended. Occupying your brain space and wasting your time, distracting you from a million more important things you could be doing.
Even if that’s true, she should be posting on 4chan not Washington Post.
Exactly. That’s why I say she’s a shill. Shills earn good money from some invisible upper authority to write this shit. For example David Icke is another shill of a different flavor.
This is a weird topic, because on the one hand, they have every right to speak and assemble, no matter how much we like it. Even the ACLU took on a case defending the American Nazi Party and their right to assemble and march. It truly is a right which the government cannot have any say in who it applies to. I won’t go into any bullshit argument that they’ll go after other people next, but it’s a right that needs to apply to everyone.
However, that only applies to the government. Everyone else can and should tell them to go fuck themselves and corporations can ban their asses from every service online. They don’t have any right to having their voices amplified online or any other service.
If you support rights you end up spending your entire life defending the worse example of those rights put to use.
You know, if AT&T starts shutting off phone service to people who repeatedly talk about how Hitler made good points, I won’t lose any sleep over it. If I know better than to talk about how burning down billboards is based via SMS, then nazis should know better than to talk about how cool Hitler was.
I also love how she says that “conservative Christians” are being targeted too, and the two links she provides are about a church that “offers help to people who want to move away from same-sex attraction or behaviours,” aka conversion therapy, aka a practice that’s been proven ineffective and harmful, and a story about Vanco dropping the Ruth Institute for “promoting hate.” But they don’t promote hate! All they do (literally all they do) is try to destroy the rights of LGBT folks! You name something the LGBT community likes, the Ruth Institute has probably spent time and energy fighting against it.
If conservative Christians are all like the Ruth Institute and Core Issues Trust, then I say cancel em all.
Well they sound like a fun group.
“you are bad and should not exist and should not love who you want or have a family” … “It just so happens we are able to cure you by changing you into something else, thus redeeming you in our eyes!”
I know this is basically religion 101, but screw them just the same.
Megan is a national treasure.
You can always count on her to selflessly use her to name to publish the most absurdly dog shit arguments to defend corporations and the powerful.
She’s also pretty dumb.
She’s also pretty dumb.
is she or does she just know where her paycheck is coming from?
That’s a question you’d only ask if you haven’t read any of her writing…
Might I suggest starting with her pieces on The Handmaid’s Tale, the Grenfell Tower Fire, and anything to do with kitchenware.
If banks are funded by the government (ongoing bailouts and ridiculously beneficial laws for them) then they should be considered a public service and available to everyone, at least at a basic level
It did in the early 1900s to about late 1960s. It was killed because some banking lobbyist killed it.
I agree. The moment they took a bailout is the moment they became a public utility.
Something something most of Europe does not allow you to overdraft your account and people get by just fine something
A lot of US banks also have that as an option, people opt in to “overdraft protection” anyway. The banks make it sound like a safer option, instead of the predatory practice it normally is.
I’ve had them turn it off, and then one day they just… Did it again. Bastards don’t even respect that because they think they know better.
Many banks straight up do not allow you to turn off overdraft protection. The bank I had before moving to a credit union did that.
people get by just fine
debatable but otherwise the point stands.
I don’t see the issue with overdrafting, just why the hell do you guys have a flat fee for it instead of just exorbitant interest rates? Even 50% interest doesn’t cost much if it’s for overdrafting a few hundred for 3 days because i lost track of how much money is in my main bank account.
The one time overdrafting cost me anything close to significant money is when I thought my account had overdrafting allowed but then my bank reverted a transaction because apparently all previous instances were just them “tolerating it”. My PC died and I wanted a new one asap, but the money for that was on my savings account, so I figured I’d just go to like -300 for 1 or 2 days. Nope, bank takes the money back, amazon makes me pay like 20€ of fees, and I have to deal with the bureaucracy of it all. At least I got my PC parts quickly anyway.
Overdrafting with a sane system is just even more expensive credit card debt.
If we cap overdraft fees, how will banks make up the lost revenue?
Get in the fucking sea.
I wonder if banks could try lending money to companies and charging a fee for this service. Like some sorta investing + banking system. Hmmm
Yeah stop talking about corpos like they’re forces of nature or phenomena . “Oh if the bank no money then no loans or whatever” nah that’s a choice. Made by people. People with cars that can be keyed. Allegedly.
There’s always some sheltered, rich, idiot, on the Internet who will argue against literally anything.
No, dummy, let me tell you why that’s a stupid observa- oh wait, I’m not sheltered or rich!
You’re absolutely right though, but in some cases I’m sure it’s a “journalist” who wants a quick check and will argue whatever stance their “benefactor” wants them to argue. Disgusting people with no moral compass.
I mean, the real issue is wealth inequality…
Instead of trying to fix all the different symptoms, we should fix the underlying problem causing them all
But I doubt that’s what the article is saying.
Obv the banks can fuck off, but I do seriously worry that we’ll see a response from banks regarding this, and it will probably be an increase in banks requiring your account to hold a minimum balance. They’re both pretty bad, so I’m not sure which is worse, but larger minimum balance requirements could push some people out of reach of a local bank account.
Being real a lot of people are skipping banks and just loading up visa gift cards and using those to buy stuff.
Most jobs require a bank account for direct deposit these days. Even pay cards are falling out of fashion. I spent a year working at a restaurant with a “i hate all taxes” libertarian owner and he still required all employees to set up a direct deposit. It keeps the books clean enough that any IRS audits wont come back demanding more money.
They’re skipping banks by using a ratshit solution that charges them between a flat $5 or 3% every month in fees…
Okay.
Couldn’t you just… opt out of overdrafting?
I’m hoping you forgot the /s, but just in case you’re not from the US: no, it’s built into almost every financial institution’s terms and conditions, at least in my experience. I had to get my mother a pre-paid credit card because she would overdraft regularly, and the bank had no solution. The pre-paid just declines payment, like the good old days.
Strange, I’m an American and my bank lets me opt out of it.
Opt out of overdraft protection or opt out of the ability to be overdrawn at all?
Opt out of being able to overdraft all together, if you spend more than you have, it’ll just deny the transaction.
Did you specifically ask the bank to disable overdraft protection? They can be really weaselly about turning it off. They HAVE to turn if off. By law.
https://www.fdic.gov/resources/consumers/consumer-news/2021-12.html
In general, for debit card transactions at ATMs or at merchants, consumers must opt-in, or agree up front, that the bank can charge you an overdraft fee for any debit card transaction that overdraws the account. If you don’t opt-in, you can’t be charged a fee. However, your bank may refuse your purchase if it will overdraw your account.
You should be able to: If there aren’t funds for a charge, then they can just not fucking charge it. My bank does this and I do not have overdraft fees because I cannot overdraft.
Overdraft fees are opt-in by law. You can always opt-out.
All the bitching and moaning on here is weird. There’s no point complaining about a thing you don’t have to pay for.
My credit union let me do that
McArdle has described herself as a “right-leaning libertarian.”[23] David Brooks categorized her as part of a group of bloggers who "start from broadly libertarian premises but do not apply them in a doctrinaire way.
McArdle began blogging in November 2001 with a blog called “Live From The WTC,” which arose from her employment with a construction firm involved in cleanup at the World Trade Center site following the September 11 attacks. She wrote under the pen name “Jane Galt,” playing on the name “John Galt,” a central character in Ayn Rand’s Objectivist novel Atlas Shrugged. In November 2002 she renamed the site “Asymmetrical Information,” a reference to the economics term of the same name. That blog had two other occasional contributors, Zimran Ahmed (writing under the pen name “Winterspeak”), and the pseudonymous “Mindles H. Dreck.”
McCardle was an outspoken supporter of the Iraq War both before and after the invasion by the United States. She later made a partial admission of error for this position [10]
Another post by McArdle, from April 2005, discusses why she takes no position on the issue of same-sex marriage. She wrote: “All I’m asking for is for people to think more deeply than a quick consultation of their imaginations to make that decision… This humility is what I want from liberals when approaching market changes; now I’m asking it from my side [libertarians], in approaching social ones.”[11]
In 2009, she criticized an article in Playboy by eXile Online editors Mark Ames and Yasha Levine which detailed the influence of the Koch brothers in American and Tea Party politics. Playboy took down the article as a result of the negative response.[13]
McArdle has been critical of the libertarian politician Ron Paul, taking him to task for not strongly disavowing racist statements that appeared in his newsletters,[25] arguing against his championing of tax credits, and accusing him of lacking specificity about cutting government spending.[26] McArdle was also quoted as saying that Ron Paul “doesn’t understand anything about monetary policy,” and that “he wastes all of his time on the House Financial Services Committee ranting crazily.”[27]
Lol
Since 2009, McArdle has argued extensively against instituting a system of national health insurance in the United States, and specifically against the federal health care reform bill the Patient Protection and Affordable Care Act, which was signed into law in March 2010. In addition to a number of blog posts on the subject, she also wrote an article, “Myth Diagnosis,” in the March 2010 Atlantic.[31]
In a July 2009 blog post, McArdle listed two reasons that she objected to such a system: first, that it would stifle innovation, because “Monopolies are not innovative, whether they are public or private,” and second, that “Once the government gets into the business of providing our health care, the government gets into the business of deciding whose life matters, and how much.”[32] Commentator Ezra Klein of The Washington Post criticized this post, writing, “In 1,600 words, she doesn’t muster a single link to a study or argument, nor a single number that she didn’t make up (what numbers do exist come in the form of thought experiments and assumptions). Megan’s argument against national health insurance boils down to a visceral hatred of the government.”[33]
In an August 2009 post, McArdle reiterated, “My objection is primarily, as I’ve said numerous times, that the government will destroy innovation. It will do this by deciding what constitutes an acceptable standard of care, and refusing to fund treatment above that. It will also start controlling prices.”[34]
In a comment to that post, McArdle stated, “The United States currently provides something like 80–90% of the profits on new drugs and medical devices. Perhaps you think you can slash profits 80% with no effect on the behavior of the companies that make these products. I don’t.” In a subsequent Washington Post online chat, a commenter asked her, “You said that medical innovation will be wiped out if we have a type of national health care, because European drug companies get 80% of their revenue from Americans. Where did you get this statistic?” McArdle responded that it was “a hypothetical, not a statistic.” This was criticized in a blog post in The New Republic.[35] In response to this criticism, McArdle stated that she had misunderstood the question, and “thought the commenter was referring to the postulated hypothetical destruction of all US profits.” She also stated that, though “there are no hard numbers available,” she estimated that the U.S. contribution to pharmaceutical profits was at least 60%.[36]
McArdle married Peter Suderman, an associate editor for the libertarian magazine Reason, in 2010.[37]
https://en.wikipedia.org/wiki/Megan_McArdle
This woman is a Libertarian ass and her views come from the highest levels of privilege.
That argument against universal healthcare, though. 🤯
I can’t honestly believe that she thinks the government cares any less about people’s lives than a corporation?
The real argument she wants to make is “pharmaceutical companies make lots of money, and if I tell people they’re a good thing then I make money, too!”
The whole “stifling innovation” argument is laughable. Health insurance conglomerates are known for their innovation. Innovating increasingly shitty ways to fuck over the patient and the healthcare provider.
It doesn’t take a genius to look around, especially in “rural America”, and see that the healthcare system(s) is on the verge of collapse. And healthcare systems all over the country keep screaming this at anyone who will listen, right up until the point they go bankrupt.
Health issurance companies are a huge contributor to this problem. You would get more value for your money, or at least get more of it back, if you took what you spend on health insurance premiums and dumped it into a Las Vegas casino slot machine.
she takes no position on the issue of same-sex marriage. She wrote: “All I’m asking for is for people to think more deeply than a quick consultation of their imaginations to make that decision…"
Or, don’t think about it at all. Either it affects you, or it doesn’t. I don’t see how it needs much thought.
Exactly, my thoughts were always “well i guess they can be as miserable as the rest of us married folks, misery does love company after all.”
But Fr I’d never have supported gay marriage on the level that I do if the conservatives weren’t fighting so hard against it. it’s simple, let consenting adults love who they love, anything else is over thinking it or pushing religion on the rest of us.
“Why won’t somebody consider how it affects straight people that gay people can marry each other?”
Yikes on bikes. Also holy hell being the libertarian that tries to get libertarians to pump the brakes on gay marriage really is a decision.
Also I have to say this every time someone says that National healthcare means the government decides who lives and who dies: the current situation led to a private corporation deciding my mom had enough tries of chemo and so they sentenced her to death. Was it the right decision? Maybe but it wasn’t doctors deciding and I don’t get to vote on the bosses of the people deciding.
well, duh. Your Bank will just stop allowing you to overdraft, declining your Transactions.
I have never ever had a transaction that overdrafted where I was happy they didn’t just decline it. Zero desire to pay $38 for the “convenience” when I could have just used a different card.
I’ve asked my bank to not allow it on my account at all and they told me NO, they can’t do that, because it’s “a service we provide our customers for their convenience”. Right. I don’t want that convenience, dicks.
