Opinion: How banking works for people of no account

For about 10 years now, two married friends of mine, both low-paid small-town schoolteachers, have been sending a monthly check for $50 to one of their former students. They tell me he’s the poorest person they’ve ever met. Given the hardscrabble place where they’ve lived most of their lives, that comes down to pretty poor.

And in his case terribly damaged. The victim of an abusive childhood, mental illness and a social safety net with more than one hole, he has several disabling health conditions, a prison record and the ravaged face of a man twice his age. But once a month he has 50 extra dollars to spend as he likes -- or so my friends thought.

Shortly before Christmas they learned that their $50 gift was actually a $43 gift, the reason being that the bank charges their beneficiary $7 to cash his check. My friends were incredulous, but a call to the bank confirmed that they had not been misinformed. The bank was taking a 14% cut.

It so happens my friends have a savings account in another branch of the same big bank. It earns them an annual percentage yield of .05% -- nothing compared with what it costs their destitute friend to access such luxuries as cigarettes, fish hooks and an extra load of wash.

Once they got past their surprise -- “For years we’ve been subsidizing a bank!� -- the couple had several questions. Why had their friend never told them this was happening? And why had it never occurred to them that this might happen?

Like the questions, the answers are closely related. It never occurred to them that this might happen because, as solvent members of the middle class, the extortionate service charge was altogether outside their experience. Just as it was altogether outside their friend’s comprehension that his penalty could count as news.

In fact, penalties and fines have been his life’s reality for as long as he can remember. His adult son expects gas money to drive him to a pharmacy less than a mile from their shared apartment. Why shouldn’t the bank charge him 14% on a $50 check?

The couple was also flabbergasted, at least at first, that their friend hadn’t opened an account at the bank to avoid the service charge. Wasn’t that common sense? But they needed only to examine their own bank statements to realize that a bank account is based on surpluses their friend simply doesn’t have. The required minimum balance is no more than a mirage for someone who routinely runs out of money before the end of the month.

Above all, the couple wanted to know how any bank could muster the conscience to look at a gaunt, toothless man and shave $7 from his $50 check, no matter what the policies were.

The obvious answer is that the bank is a business, not a charity. If it doesn’t keep to the rules, it won’t be in business for long -- unless, of course, it’s “too big to fail.� In that case, the citizenry will be obliged to cover its every misadventure to the tune of billions, which, if hard to come by, can usually be obtained by slashing the sorts of programs that assist the sorts of people whose idea of sudden riches is a $50 check.

I cheered up my friends as best I could by pointing out that the bank was cutting them and their friend more slack than they realized. “After all, it could also be charging you for making an international transaction, since the man you’ve been writing your checks to effectively lives in another country.

“In your country, for instance, you can call the bank manager or your legislators to complain about the service charge. True, there was a time when your friend could have done the same thing, and for a mere 25 cents, but that was before we all got cell phones and the public phones in his country were ripped off the streets.�

Well, let the fellow get a cellphone then. Or let him open a bank account like everybody else. As they used to say in France before the Revolution, let him eat cake.

Garret Keizer’s latest book is “Getting Schooled: The Reeducation of an American Teacher.�

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