My credit union gives me a free line of credit against my checking account, with no charges for dipping in. The interest rate is ridiculous (16%) but it's only there to catch my mistakes.
Uh, actually, wages have gone down. So have property leases. And contracted labor costs.
No. Across the board, they haven't. I could sort through my own books to prove that to you. I could, but I won't. I'm not that bent on being proven "right." So you'll just have to take my word on it, as someone who is probably more familiar with the costs of owning and operating a business than you are. I hate to be so blunt, but you're simply wrong. Wages are debatable (although anecdotal evidence from my friends in the industry suggest that they're doing juuuuust fine), but property leases have gone up in most of the country (roughly 15% over 2 years ago in my area), and contracted labor has gone up as well (my costs have been roughly 10% over what they were 3 years ago).
You should really chill with the sarcastic tone. It's not helpful to a conversation like this, and you don't need to try to prove anything. This sort of snark just makes you sound like a silly goose. I'm only trying to share some insight into the discussion, since I actually do know what the hell I'm talking about.
minor incident on
Ah, it stinks, it sucks, it's anthropologically unjust
He's right though. Wages have gone down rather considerably. It's possible you're in an industry that isn't affected, or you're getting suckered by contractors (likely).
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minor incidentexpert in a dying fieldnjRegistered Userregular
He's right though. Wages have gone down rather considerably. It's possible you're in an industry that isn't affected, or you're getting suckered by contractors (likely).
Just because I'm curious, I decided to do some internet research, and I'm having trouble finding any evidence of anything more than a 3% drop in wages year over year, which still leaves salary averages nationwide at well above the 2006/2007 levels. If you are seeing something different, I'd genuinely love to see the data on it. I'm just not seeing the huge drop off some people are implying, but I'm more than happy to be corrected.
With regards to contractors, our basic services, such as landscaping, cleaning, and waste disposal have all gone up roughly 10% in the last 3 years. As I mentioned, this does include shopping around for better deals. I sincerely doubt anyone's waste collection costs have actually gone down over the last few years. That's one industry that's even more predatory than the banking industry. It's certainly possible a bank's cleaning company might have offered a reduction in their rates, but I do sort of doubt that as well. But hey, I've been wrong before. I may well be wrong again one day. =] And I've got a couple of relatives in construction, and they are certainly not charging less than last decade.
minor incident on
Ah, it stinks, it sucks, it's anthropologically unjust
An interesting article on the subject, I think. The graph shows a rather sharp drop in middle class wages, which labor heavy contract work tends to fall under. That's general though. So far as contract workers themselves, it's highly possible that their wages haven't gone down, a healthy chunk of competition has folded, and the lack of competition has driven up prices.
On the construction contracts, well I'll have to take your word for it (barring further research). But it seems to me with the housing and real estate markets folding up that new contracts would be scarce, and bidding for them would be highly competitive (which would drive the contract price down considerably).
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minor incidentexpert in a dying fieldnjRegistered Userregular
I think what you touched on is probably right on the money -- A lot of these companies have gone under, so the ones remaining have less competition. I know that's how it is for my waste disposal. 4 years ago I had a dozen options. Last year when I checked around there were literally 3 companies that still serviced my area. And all of their prices were eerily similar.
I have no doubt the issue is similar in construction. Only the companies that do a broad range of construction have prospered, so they're getting all the business.
Thanks for the link. It was a very interesting read.
Ah, it stinks, it sucks, it's anthropologically unjust
I'm going to switch to our local credit union sometime in the near future. I use US Bank, which is no worse with overdraft fees and shenanigans than any other bank (which is to say, bad, but all the same), but recently they want to charge things like monthly usage fees and such. My issue is that they aren't really providing me with any extra service other than to store my money, but they make it more difficult for me as a consumer to actually access that. They've also been hard on me lately for the sales pitches, even when it's the same women with the same offer and she's gotten to the point where I have to say "Okay, I'm leaving now" because she won't stop selling me offers! It goes from "Hey, just a thought" to "PLEASE SIGN UP FOR SOMETHING!". It's Blockbuster Video bad. When I was out of high school, I wanted to use them because they had ATMs up and down the west coast, which was nice to avoid $5 and then some using some other ATM. But I can't remember the last time I needed to use an ATM, save for a vacation here or there and a one time charge was acceptable for me.
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I'm going to switch to our local credit union sometime in the near future. I use US Bank, which is no worse with overdraft fees and shenanigans than any other bank (which is to say, bad, but all the same), but recently they want to charge things like monthly usage fees and such. My issue is that they aren't really providing me with any extra service other than to store my money, but they make it more difficult for me as a consumer to actually access that. They've also been hard on me lately for the sales pitches, even when it's the same women with the same offer and she's gotten to the point where I have to say "Okay, I'm leaving now" because she won't stop selling me offers! It goes from "Hey, just a thought" to "PLEASE SIGN UP FOR SOMETHING!". It's Blockbuster Video bad. When I was out of high school, I wanted to use them because they had ATMs up and down the west coast, which was nice to avoid $5 and then some using some other ATM. But I can't remember the last time I needed to use an ATM, save for a vacation here or there and a one time charge was acceptable for me.
Heh. US Bank. Oh man.
I was moving to an area where US Bank does not have a branch, so I opened a new account in another bank. I didn't close my old US Bank account (my bad) and then I over drew it for less than a dollar. No shit, less than a dollar.
I didn't know that, because I had already moved and my roommate didn't tell me I was still getting mail. They had tacked on charges for like $700 by the time I found out. I called them, laughed, and told them to get fucked.
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zepherinRussian warship, go fuck yourselfRegistered Userregular
Depends on the area and the construction contracts. Subcontractors have been getting hosed unless they are plumbers or electricians, but GCs that survived 2009-2010 are rebounding with less competition on bids. Still some areas competition is fierce and contractors are taking a loss or breaking even just to keep their best talent employed.
Real wages have been in decline for 40 years or so. Individual years may see increases (as occurred a couple times in the first half of the 2000s), but the longterm trend is certainly downward. This trend has been documented in enough places that I'm surprised it's even in question.
That's really only tangential to the issue of fees, though. These fees aren't related to administrative costs in any meaningful way. Banks didn't see the need to charge consumers for these "administrative costs" when they were making a ton of money on overdraft protection, or on hitting retailers for large dollar amounts per transaction. It isn't about their costs, it's about making up profit lost in other areas.
it was the smallest on the list but
Pluto was a planet and I'll never forget
keep this mind at a certain point, the $5 minimum checking account is possible. Consider that at a million people the cost per person is miniscule. Change, because it involves only a binary function, put more money or close the account. Administering a million accounts electronically requires 1 person to trouble shoot, and a but load of computers, which are tax shelters anyways. The fee is a money grab. The bank is saying we think more people will pay the fee than leave. That's it. If you don't like it vote with your wallet and put your money in a credit union, USAA, many online only checking accounts. There are many options that are not jacking you. If a fee causes half the sub thousand depositors to pull their money and leave the bank will go insolvent. The other banks will back off. If maybe %1 of the sub thousand depositors leave, then the bank says the rest of them giving $5 a month more than makes up for it.
Really a bank with 1 million accounts needs only 1 IT guy and some servers? So the entire US banking system could be replaced with 500 neckbeards?
Bulk standard mail rate is $.057. To put it simply, you need to make .2% off the 5 dollar account just to break even on the postage for sending out a new card every 5 years. (A monthly statement will require 13.68%)
To pay your one IT person 50k a year in wages+benefits: another 1% Of course you really need round the clock IT so x3(with no one to fill in for vacations etc but w/e) so 3%
Colo bandwidth + rack space $2000 a month(probably much much more but idk what kind of support you need for that number of accounts/transactions) 0.24% but you need at least 2 geographically separate locations so .48% (say IT is split between locations)
and boom: your at -3.7% a year, discounting all the rational stuff like: Someone to answer a phone as one 30s call a year/customer is roughly an entire year(347.2 days) worth of call time. FDIC insurance, an actual physical 'bank'.
There are static non-dividable costs for administering an account. If it wasn't for fees banks would probably have $500-1500 minimums. Mailing out a statement a month costs 68cents/year, at 10% profit a $5 account earns 50c.
Taking $500k a year in revenue, spending 150k of it on IT staff, 5 people to man the phones is another 150k(ignoring the actual cost of 500,000 minutes of 1800 line), 50k on colos, and 57k on postage(1 statement a year aka the federal required interest statement I-???) And you're down to 100k. With a bunch of obvious costs un-accounted for: rent, advertising, hell if the card costs 5c that 100k is gone over 1million new cards every 5 years.
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zepherinRussian warship, go fuck yourselfRegistered Userregular
edited October 2011
Your thinking way too much into this. yes a million accounts could be run by 1 person if they were all the minimum. When they stop being the minimum amount they need more people, but as long as all of those people kept the minimum bank account then it costs the bank next to nothing to have them. All of those situations you describe stop being the minimum amount and as such not applicable to what I have said. Binary function. I could run a million accounts on a 486 with residential dsl.
If the balance equals zero close account. If the balance stops being 5 you transfer it to active accounts, else you keep it in inactive accounts. Electronically is the key, and I said electronically. No paper invoices, If you send a paper invoice you are not administering the account electronically. It's really simple as an inactive account.
zepherin on
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Just_Bri_ThanksSeething with ragefrom a handbasket.Registered User, ClubPAregular
Plus, every bank I have ever had will eventually drain and then close an inactive account. Inactive accounts are pure money makers, because the bank will straight up take that money.
...and when you are done with that; take a folding
chair to Creation and then suplex the Void.
What sucks is BoA and Wells are the only two banks left on this side of town
One of the banks was closed by the Treasury for an undisclosed reason and the other was bought out and left town
I am also stuck with a 2nd mortage my father took out a few years ago to pay for a bunch of things that I am still paying on BoA
I use my debit card because it's beyond dumb to walk around with all that cash and I live on a iffy part of town
So we get stiff once in a while. So we have a little fun. What’s wrong with that? This is a free country, isn’t it? I can take my panda any place I want to. And if I wanna buy it a drink, that’s my business.
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zepherinRussian warship, go fuck yourselfRegistered Userregular
Brainleech: Another avenue for you is to use a credit card and pay it off every month from your savings account using bill pay and just put your money there.
So it was mentioned before but I don't think we got a definitive answer: If your debit card gives you the option of running it through as a credit card, does that somehow bypass all these charges?
Indeed it is
With the problems I ended up with this year and the fun and games the state and county are playing it's going to be a headache at the end of this year
But I am suprised no one has burned down the county seat after the bonds they could not get anyone to buy they instead raise the sales tax by 2 cents to 9.347 where I can go down the hill and pay around 7 cents
They also jacked up the property tax to a rate they have several lawsuits over
But I really want to know why BoA thinks paying $5 is a good idea and not going to drive people away
Your thinking way too much into this. yes a million accounts could be run by 1 person if they were all the minimum. When they stop being the minimum amount they need more people, but as long as all of those people kept the minimum bank account then it costs the bank next to nothing to have them. All of those situations you describe stop being the minimum amount and as such not applicable to what I have said. Binary function. I could run a million accounts on a 486 with residential dsl.
If the balance equals zero close account. If the balance stops being 5 you transfer it to active accounts, else you keep it in inactive accounts. Electronically is the key, and I said electronically. No paper invoices, If you send a paper invoice you are not administering the account electronically. It's really simple as an inactive account.
Maybe I'm just confused, but I really don't see how administering an account with $5 in it electronically somehow takes significantly less resources than one with $100 or $1000. I don't see why you'd "need more people" for a large account than a small one, at least if we aren't talking about business accounts and such.
I've called my bank zero times in the last year. I've interacted with them zero times. All they do is store my money, and run the ten or so transactions a month I ask of them. My account usually has upwards of a grand in it.
Whereas if that person with the $5 account wants to actually talk to a person about some problem even once then they've probably used substantially more resources than I have.
Oh, and you'd probably want (and be required by the government to have) at least two 486's on residential DSL. You know, one as a backup. If you're going to be running a million bank accounts, that is.
Oh, and you'd probably want (and be required by the government to have) at least two 486's on residential DSL. You know, one as a backup. If you're going to be running a million bank accounts, that is.
This point does somewhat underscore the notion though that strictly speaking, banking IT costs have been plummeting.
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zepherinRussian warship, go fuck yourselfRegistered Userregular
[Maybe I'm just confused, but I really don't see how administering an account with $5 in it electronically somehow takes significantly less resources than one with $100 or $1000. I don't see why you'd "need more people" for a large account than a small one, at least if we aren't talking about business accounts and such.
I've called my bank zero times in the last year. I've interacted with them zero times. All they do is store my money, and run the ten or so transactions a month I ask of them. My account usually has upwards of a grand in it.
Whereas if that person with the $5 account wants to actually talk to a person about some problem even once then they've probably used substantially more resources than I have.
Oh, and you'd probably want (and be required by the government to have) at least two 486's on residential DSL. You know, one as a backup. If you're going to be running a million bank accounts, that is.
Because a person with $5 is making 0 transactions. That's the point. If someone with 100 or 1000 makes 0 transactions then go team.
So it was mentioned before but I don't think we got a definitive answer: If your debit card gives you the option of running it through as a credit card, does that somehow bypass all these charges?
No, it does not bypass those charges. You will still get charged the fee.
Maybe I'm just confused, but I really don't see how administering an account with $5 in it electronically somehow takes significantly less resources than one with $100 or $1000. I don't see why you'd "need more people" for a large account than a small one, at least if we aren't talking about business accounts and such.
I've called my bank zero times in the last year. I've interacted with them zero times. All they do is store my money, and run the ten or so transactions a month I ask of them. My account usually has upwards of a grand in it.
Whereas if that person with the $5 account wants to actually talk to a person about some problem even once then they've probably used substantially more resources than I have.
Oh, and you'd probably want (and be required by the government to have) at least two 486's on residential DSL. You know, one as a backup. If you're going to be running a million bank accounts, that is.
Because a person with $5 is making 0 transactions. That's the point. If someone with 100 or 1000 makes 0 transactions then go team.
Fair enough. The mythical customer with only $5 in their account and zero transactions probably does result in zero IT overhead.
The much more likely scenario, in which a customer deposits their shitty $400 paycheck every other week but proceeds to draw that down to nothing through a combination of cash withdrawals or rent checks, leaving only $5 remaining in their account, is a different story.
At this point I'll go and read back through the thread and figure out why we're talking about hypothetical $5 orphan accounts.
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minor incidentexpert in a dying fieldnjRegistered Userregular
Because we like to argue over improbable hypothetical situations?
This is the Internet, after all.
Ah, it stinks, it sucks, it's anthropologically unjust
The point has been bounced back and forth because these policies seem to be weighted towards screwing people who have very little in their bank and are likely living paycheque to paycheque, thus bouncing their balance up and down near zero regularly.
These changes are significantly less likely to affect people with a significant (potentially) liquid financial safety net in place, especially since many banks appear to waive some or most of the fees if you have $X,000 tucked away.
Someone with a couple grand on hand is less likely to sweat a $5 fee, but funnily enough, they may not have to deal with it at all.
Whereas someone who, after paying rent, groceries and whatnot only has a few dollars to spare, one mistake or mistiming on deposits/withdrawals (which the banks have admitted to screwing with in the past, for reasons of varying degrees of validity and believability) can send them into a spiral of overdraft charges and other assorted fees. The person making minimum wage flipping burgers is the type least able to be able to afford these fees, and the most likely to have to pay them.
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKER!
The point has been bounced back and forth because these policies seem to be weighted towards screwing people who have very little in their bank and are likely living paycheque to paycheque, thus bouncing their balance up and down near zero regularly.
These changes are significantly less likely to affect people with a significant (potentially) liquid financial safety net in place, especially since many banks appear to waive some or most of the fees if you have $X,000 tucked away.
Someone with a couple grand on hand is less likely to sweat a $5 fee, but funnily enough, they may not have to deal with it at all.
Whereas someone who, after paying rent, groceries and whatnot only has a few dollars to spare, one mistake or mistiming on deposits/withdrawals (which the banks have admitted to screwing with in the past, for reasons of varying degrees of validity and believability) can send them into a spiral of overdraft charges and other assorted fees. The person making minimum wage flipping burgers is the type least able to be able to afford these fees, and the most likely to have to pay them.
All irrelevant to the fact that banks are businesses. Yes, they waive the various fees for people who have $X in their bank account, because they're making enough money on that account to warrant it (and want to continue doing so).
Yes, it is the nature of many financial transactions that those who need them least get the most perks. That's why I pay a lower rate on my car and home than somebody making less than me, despite the fact that I make more (and thus could afford more). That's the reason I don't pay squat for banking, because I have at least a little bit of cash. That's the reason why I can get a credit card at like 10% interest, instead of 24%. Yes, I've spent plenty of time on the other side of the divide as well...I get that it sucks.
But that's a great argument as to why necessary institutions like banks should be non-profits, or even nationalized. It's not an argument as to why a for-profit business should act like anything other than a for-profit business. Piddly-ass small-balance accounts don't generate enough revenue on their own to provide a decent profit margin. So the bank has to, you know, charge for the services they're providing. There are a multitude of ways to do that, one of which is a monthly fee imposed on the customer (either in general, for debit card services, whatever). Some banks have experimented with per-interaction fees as well (charging you like $2 to talk to a teller, or a phone representative).
As for overdraft fees, I can go on and on about those...however, making them opt-in and forcing banks to run transactions in chronological order largely addresses my concerns with those. Though they're still bullshit, and some sort of cap on the amount (either per transaction, percentage of overdraft, whatever) wouldn't be a terrible idea. That's neither here nor there, though.
I never said it was wrong, just that this was the way things were and why the debate was raging.
I'm all for people finding banks, credit unions or other financial institutions that meet their needs with bonuses and rates they approve of.
It might become a problem if they become widespread enough that you can't just change banks/CU's to avoid them. Sure, some places will advertise on being the place without fees, or lower fees or whatever, but at the end of the day if profits shoot up, anyone in the financial industry is going to have think long and hard about that exact same dynamic; what can I charge MY people without losing so many as to offset those profits.
Forar on
First they came for the Muslims, and we said NOT TODAY, MOTHERFUCKER!
I never said it was wrong, just that this was the way things were and why the debate was raging.
I'm all for people finding banks, credit unions or other financial institutions that meet their needs with bonuses and rates they approve of.
It might become a problem if they become widespread enough that you can't just change banks/CU's to avoid them. Sure, some places will advertise on being the place without fees, or lower fees or whatever, but at the end of the day if profits shoot up, anyone in the financial industry is going to have think long and hard about that exact same dynamic; what can I charge MY people without losing so many as to offset those profits.
All true.
I guess my thing is that a lot of people are acting as if servicing a $5 checking account is still pure profit, because "lulz 486 with dial-up."
No, it really isn't. Because there are a ton of other services people expect a bank to provide, and will utilize, that cost money to provide. Even looking at USAA, who I did at one point bank with, they don't maintain branches. Or at least they don't maintain them anywhere I've never lived (in case they have a couple somewhere, and somebody wants to correct me). Which is cool if you want to do all your banking by mail/phone/online. But honestly, over the years there have been times I was glad to have access to an actual bank, like as in a building with people in it that can help me face-to-face with stuff, and that's part of why I left USAA. But even maintaining a building with employees that you can show up and speak to costs money, and at least in my experience you can't depend on those $5 account-holders not to show up and take advantage of these services as well.
A 486 in somebody's basement with a dial-up line is not a bank. That's, like, .001% of what you need to establish a bank. So the fact that you can theoretically, maybe*, service a million accounts on a 486 in a basement with a dial-up line isn't relevant to much of anything, so I found that entire line of argument to be absurd. Amusing, but absurd.
The point has been bounced back and forth because these policies seem to be weighted towards screwing people who have very little in their bank and are likely living paycheque to paycheque, thus bouncing their balance up and down near zero regularly.
These changes are significantly less likely to affect people with a significant (potentially) liquid financial safety net in place, especially since many banks appear to waive some or most of the fees if you have $X,000 tucked away.
Someone with a couple grand on hand is less likely to sweat a $5 fee, but funnily enough, they may not have to deal with it at all.
Whereas someone who, after paying rent, groceries and whatnot only has a few dollars to spare, one mistake or mistiming on deposits/withdrawals (which the banks have admitted to screwing with in the past, for reasons of varying degrees of validity and believability) can send them into a spiral of overdraft charges and other assorted fees. The person making minimum wage flipping burgers is the type least able to be able to afford these fees, and the most likely to have to pay them.
All irrelevant to the fact that banks are businesses. Yes, they waive the various fees for people who have $X in their bank account, because they're making enough money on that account to warrant it (and want to continue doing so).
Yes, it is the nature of many financial transactions that those who need them least get the most perks. That's why I pay a lower rate on my car and home than somebody making less than me, despite the fact that I make more (and thus could afford more). That's the reason I don't pay squat for banking, because I have at least a little bit of cash. That's the reason why I can get a credit card at like 10% interest, instead of 24%. Yes, I've spent plenty of time on the other side of the divide as well...I get that it sucks.
But that's a great argument as to why necessary institutions like banks should be non-profits, or even nationalized. It's not an argument as to why a for-profit business should act like anything other than a for-profit business. Piddly-ass small-balance accounts don't generate enough revenue on their own to provide a decent profit margin. So the bank has to, you know, charge for the services they're providing. There are a multitude of ways to do that, one of which is a monthly fee imposed on the customer (either in general, for debit card services, whatever). Some banks have experimented with per-interaction fees as well (charging you like $2 to talk to a teller, or a phone representative).
As for overdraft fees, I can go on and on about those...however, making them opt-in and forcing banks to run transactions in chronological order largely addresses my concerns with those. Though they're still bullshit, and some sort of cap on the amount (either per transaction, percentage of overdraft, whatever) wouldn't be a terrible idea. That's neither here nor there, though.
Profitability doesn't impact morality. The banks would also make a buck from raiding your account and locking you out on the premise that your identity has been compromised.
Profitability doesn't impact morality. The banks would also make a buck from raiding your account and locking you out on the premise that your identity has been compromised.
Yes, because "charging people for services provided, if the revenues generated by their account are insufficient" and "lying about identity theft so they can steal your money" are on the same ethical plane.
People just need to figure out that their shitty bank accounts with $72 in them are just as exciting to the bank as they are to the depositor. Which is to say not at all.
People just need to figure out that their shitty bank accounts with $72 in them are just as exciting to the bank as they are to the depositor. Which is to say not at all.
Sigh. No.
Look, the classic banking model is taking deposited cash and investing that amount of capital to create greater wealth. That's the entire point.
If a banker can't take 500 $72 accounts and make a profit off of the cash, then that banker does not deserve to be in business; he is terrible at his job.
Administrative costs for a large bank do not fluctuate on the margin. It costs X to have an IT support crew and the banks to be staffed. So let's cut the shit on that. If that were the heart of it, banks can simply impose minimum amounts.
Look, the classic banking model is taking deposited cash and investing that amount of capital to create greater wealth. That's the entire point.
If a banker can't take 500 $72 accounts and make a profit off of the cash, then that banker does not deserve to be in business; he is terrible at his job.
Administrative costs for a large bank do not fluctuate on the margin. It costs X to have an IT support crew and the banks to be staffed. So let's cut the shit on that. If that were the heart of it, banks can simply impose minimum amounts.
Exactly. Nor would banks need to implement all kinds of hidden fees, or juggle accounts so as to deliberately scorch users for extra fees. They would simply say "administrative costs mean that we must charge you $X for this kind of account", not "we're now going to hit you for $Y if you use a debit card." For example, deliberately re-arranging the order of transactions to generate overdrafts.
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Mine too. Credit unions are awesome.
No. Across the board, they haven't. I could sort through my own books to prove that to you. I could, but I won't. I'm not that bent on being proven "right." So you'll just have to take my word on it, as someone who is probably more familiar with the costs of owning and operating a business than you are. I hate to be so blunt, but you're simply wrong. Wages are debatable (although anecdotal evidence from my friends in the industry suggest that they're doing juuuuust fine), but property leases have gone up in most of the country (roughly 15% over 2 years ago in my area), and contracted labor has gone up as well (my costs have been roughly 10% over what they were 3 years ago).
You should really chill with the sarcastic tone. It's not helpful to a conversation like this, and you don't need to try to prove anything. This sort of snark just makes you sound like a silly goose. I'm only trying to share some insight into the discussion, since I actually do know what the hell I'm talking about.
Just because I'm curious, I decided to do some internet research, and I'm having trouble finding any evidence of anything more than a 3% drop in wages year over year, which still leaves salary averages nationwide at well above the 2006/2007 levels. If you are seeing something different, I'd genuinely love to see the data on it. I'm just not seeing the huge drop off some people are implying, but I'm more than happy to be corrected.
With regards to contractors, our basic services, such as landscaping, cleaning, and waste disposal have all gone up roughly 10% in the last 3 years. As I mentioned, this does include shopping around for better deals. I sincerely doubt anyone's waste collection costs have actually gone down over the last few years. That's one industry that's even more predatory than the banking industry. It's certainly possible a bank's cleaning company might have offered a reduction in their rates, but I do sort of doubt that as well. But hey, I've been wrong before. I may well be wrong again one day. =] And I've got a couple of relatives in construction, and they are certainly not charging less than last decade.
An interesting article on the subject, I think. The graph shows a rather sharp drop in middle class wages, which labor heavy contract work tends to fall under. That's general though. So far as contract workers themselves, it's highly possible that their wages haven't gone down, a healthy chunk of competition has folded, and the lack of competition has driven up prices.
On the construction contracts, well I'll have to take your word for it (barring further research). But it seems to me with the housing and real estate markets folding up that new contracts would be scarce, and bidding for them would be highly competitive (which would drive the contract price down considerably).
I have no doubt the issue is similar in construction. Only the companies that do a broad range of construction have prospered, so they're getting all the business.
Thanks for the link. It was a very interesting read.
3DS FC: 4699-5714-8940 Playing Pokemon, add me! Ho, SATAN!
Heh. US Bank. Oh man.
I was moving to an area where US Bank does not have a branch, so I opened a new account in another bank. I didn't close my old US Bank account (my bad) and then I over drew it for less than a dollar. No shit, less than a dollar.
I didn't know that, because I had already moved and my roommate didn't tell me I was still getting mail. They had tacked on charges for like $700 by the time I found out. I called them, laughed, and told them to get fucked.
That's really only tangential to the issue of fees, though. These fees aren't related to administrative costs in any meaningful way. Banks didn't see the need to charge consumers for these "administrative costs" when they were making a ton of money on overdraft protection, or on hitting retailers for large dollar amounts per transaction. It isn't about their costs, it's about making up profit lost in other areas.
Pluto was a planet and I'll never forget
Really a bank with 1 million accounts needs only 1 IT guy and some servers? So the entire US banking system could be replaced with 500 neckbeards?
Bulk standard mail rate is $.057. To put it simply, you need to make .2% off the 5 dollar account just to break even on the postage for sending out a new card every 5 years. (A monthly statement will require 13.68%)
To pay your one IT person 50k a year in wages+benefits: another 1% Of course you really need round the clock IT so x3(with no one to fill in for vacations etc but w/e) so 3%
Colo bandwidth + rack space $2000 a month(probably much much more but idk what kind of support you need for that number of accounts/transactions) 0.24% but you need at least 2 geographically separate locations so .48% (say IT is split between locations)
and boom: your at -3.7% a year, discounting all the rational stuff like: Someone to answer a phone as one 30s call a year/customer is roughly an entire year(347.2 days) worth of call time. FDIC insurance, an actual physical 'bank'.
There are static non-dividable costs for administering an account. If it wasn't for fees banks would probably have $500-1500 minimums. Mailing out a statement a month costs 68cents/year, at 10% profit a $5 account earns 50c.
Taking $500k a year in revenue, spending 150k of it on IT staff, 5 people to man the phones is another 150k(ignoring the actual cost of 500,000 minutes of 1800 line), 50k on colos, and 57k on postage(1 statement a year aka the federal required interest statement I-???) And you're down to 100k. With a bunch of obvious costs un-accounted for: rent, advertising, hell if the card costs 5c that 100k is gone over 1million new cards every 5 years.
If the balance equals zero close account. If the balance stops being 5 you transfer it to active accounts, else you keep it in inactive accounts. Electronically is the key, and I said electronically. No paper invoices, If you send a paper invoice you are not administering the account electronically. It's really simple as an inactive account.
chair to Creation and then suplex the Void.
One of the banks was closed by the Treasury for an undisclosed reason and the other was bought out and left town
I am also stuck with a 2nd mortage my father took out a few years ago to pay for a bunch of things that I am still paying on BoA
I use my debit card because it's beyond dumb to walk around with all that cash and I live on a iffy part of town
All your monies are belong to the Credit Unions!
Seriously though, CUs are where it's at.
I used what little I had saved to bail my ass out of falling into a real nightmare after my father died earlier this year
And it was FUN to not get bills for months and complain about it when they shut off the power, water and gas!
This may need a bit more info. Like, did you inherit the house or something?
Oh that was my question to Brainleech. It's not a situation I will ever end up stuck in, but information is power and all that.
With the problems I ended up with this year and the fun and games the state and county are playing it's going to be a headache at the end of this year
But I am suprised no one has burned down the county seat after the bonds they could not get anyone to buy they instead raise the sales tax by 2 cents to 9.347 where I can go down the hill and pay around 7 cents
They also jacked up the property tax to a rate they have several lawsuits over
But I really want to know why BoA thinks paying $5 is a good idea and not going to drive people away
Maybe I'm just confused, but I really don't see how administering an account with $5 in it electronically somehow takes significantly less resources than one with $100 or $1000. I don't see why you'd "need more people" for a large account than a small one, at least if we aren't talking about business accounts and such.
I've called my bank zero times in the last year. I've interacted with them zero times. All they do is store my money, and run the ten or so transactions a month I ask of them. My account usually has upwards of a grand in it.
Whereas if that person with the $5 account wants to actually talk to a person about some problem even once then they've probably used substantially more resources than I have.
Oh, and you'd probably want (and be required by the government to have) at least two 486's on residential DSL. You know, one as a backup. If you're going to be running a million bank accounts, that is.
This point does somewhat underscore the notion though that strictly speaking, banking IT costs have been plummeting.
No, it does not bypass those charges. You will still get charged the fee.
Fair enough. The mythical customer with only $5 in their account and zero transactions probably does result in zero IT overhead.
The much more likely scenario, in which a customer deposits their shitty $400 paycheck every other week but proceeds to draw that down to nothing through a combination of cash withdrawals or rent checks, leaving only $5 remaining in their account, is a different story.
At this point I'll go and read back through the thread and figure out why we're talking about hypothetical $5 orphan accounts.
This is the Internet, after all.
These changes are significantly less likely to affect people with a significant (potentially) liquid financial safety net in place, especially since many banks appear to waive some or most of the fees if you have $X,000 tucked away.
Someone with a couple grand on hand is less likely to sweat a $5 fee, but funnily enough, they may not have to deal with it at all.
Whereas someone who, after paying rent, groceries and whatnot only has a few dollars to spare, one mistake or mistiming on deposits/withdrawals (which the banks have admitted to screwing with in the past, for reasons of varying degrees of validity and believability) can send them into a spiral of overdraft charges and other assorted fees. The person making minimum wage flipping burgers is the type least able to be able to afford these fees, and the most likely to have to pay them.
All irrelevant to the fact that banks are businesses. Yes, they waive the various fees for people who have $X in their bank account, because they're making enough money on that account to warrant it (and want to continue doing so).
Yes, it is the nature of many financial transactions that those who need them least get the most perks. That's why I pay a lower rate on my car and home than somebody making less than me, despite the fact that I make more (and thus could afford more). That's the reason I don't pay squat for banking, because I have at least a little bit of cash. That's the reason why I can get a credit card at like 10% interest, instead of 24%. Yes, I've spent plenty of time on the other side of the divide as well...I get that it sucks.
But that's a great argument as to why necessary institutions like banks should be non-profits, or even nationalized. It's not an argument as to why a for-profit business should act like anything other than a for-profit business. Piddly-ass small-balance accounts don't generate enough revenue on their own to provide a decent profit margin. So the bank has to, you know, charge for the services they're providing. There are a multitude of ways to do that, one of which is a monthly fee imposed on the customer (either in general, for debit card services, whatever). Some banks have experimented with per-interaction fees as well (charging you like $2 to talk to a teller, or a phone representative).
As for overdraft fees, I can go on and on about those...however, making them opt-in and forcing banks to run transactions in chronological order largely addresses my concerns with those. Though they're still bullshit, and some sort of cap on the amount (either per transaction, percentage of overdraft, whatever) wouldn't be a terrible idea. That's neither here nor there, though.
I'm all for people finding banks, credit unions or other financial institutions that meet their needs with bonuses and rates they approve of.
It might become a problem if they become widespread enough that you can't just change banks/CU's to avoid them. Sure, some places will advertise on being the place without fees, or lower fees or whatever, but at the end of the day if profits shoot up, anyone in the financial industry is going to have think long and hard about that exact same dynamic; what can I charge MY people without losing so many as to offset those profits.
All true.
I guess my thing is that a lot of people are acting as if servicing a $5 checking account is still pure profit, because "lulz 486 with dial-up."
No, it really isn't. Because there are a ton of other services people expect a bank to provide, and will utilize, that cost money to provide. Even looking at USAA, who I did at one point bank with, they don't maintain branches. Or at least they don't maintain them anywhere I've never lived (in case they have a couple somewhere, and somebody wants to correct me). Which is cool if you want to do all your banking by mail/phone/online. But honestly, over the years there have been times I was glad to have access to an actual bank, like as in a building with people in it that can help me face-to-face with stuff, and that's part of why I left USAA. But even maintaining a building with employees that you can show up and speak to costs money, and at least in my experience you can't depend on those $5 account-holders not to show up and take advantage of these services as well.
A 486 in somebody's basement with a dial-up line is not a bank. That's, like, .001% of what you need to establish a bank. So the fact that you can theoretically, maybe*, service a million accounts on a 486 in a basement with a dial-up line isn't relevant to much of anything, so I found that entire line of argument to be absurd. Amusing, but absurd.
Profitability doesn't impact morality. The banks would also make a buck from raiding your account and locking you out on the premise that your identity has been compromised.
Yes, because "charging people for services provided, if the revenues generated by their account are insufficient" and "lying about identity theft so they can steal your money" are on the same ethical plane.
Sure.
I don't get paid until Friday. >.<
Sigh. No.
Look, the classic banking model is taking deposited cash and investing that amount of capital to create greater wealth. That's the entire point.
If a banker can't take 500 $72 accounts and make a profit off of the cash, then that banker does not deserve to be in business; he is terrible at his job.
Administrative costs for a large bank do not fluctuate on the margin. It costs X to have an IT support crew and the banks to be staffed. So let's cut the shit on that. If that were the heart of it, banks can simply impose minimum amounts.
Exactly. Nor would banks need to implement all kinds of hidden fees, or juggle accounts so as to deliberately scorch users for extra fees. They would simply say "administrative costs mean that we must charge you $X for this kind of account", not "we're now going to hit you for $Y if you use a debit card." For example, deliberately re-arranging the order of transactions to generate overdrafts.
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replaced by JPEGs.