WEBVTT - Can you live without a bank account? 0:00:00.520 --> 0:00:07.960 San Francisco, the s Y s K treet Yes, San Francisco, Oakland, 0:00:08.240 --> 0:00:11.240 the entire Bay area and dare I say, all of 0:00:11.240 --> 0:00:14.640 Silicon Valley. Yeah, we love you. And we're coming back 0:00:14.640 --> 0:00:17.520 to Sketch Fest this year in January. Yeah, we're gonna 0:00:17.560 --> 0:00:21.520 be there on Sunday, January one pm, a very rare 0:00:21.720 --> 0:00:25.560 afternoon show. Uh, and we will be ready to go. 0:00:25.840 --> 0:00:28.080 So you guys better be drunk from the night before 0:00:28.160 --> 0:00:31.319 or getting drunk for that evening. Yeah, however it crosses over, 0:00:31.440 --> 0:00:34.720 I think it'll be proof positive that uh we endorse 0:00:35.159 --> 0:00:39.600 afternoon drinking, you know, yeah, you know, a couple of drinks, 0:00:39.600 --> 0:00:43.440 maybe it'd be bloody Mary. What were we talking about. Oh, yeah, 0:00:43.479 --> 0:00:45.800 we're promoting our show. Oh, that's right. So we're doing 0:00:45.800 --> 0:00:48.800 that show on January. Uh. You can go to the 0:00:48.960 --> 0:00:52.720 s F Sketch Fest website to get tickets and it's awesome. 0:00:52.760 --> 0:00:56.640 It's a great, great comedy festival. Lots of awesome shows 0:00:56.680 --> 0:01:01.040 that weekend and for the following weeks. So I encourage you, 0:01:01.120 --> 0:01:04.160 like to buy lots of tickets just by ours first. Yeah, 0:01:04.400 --> 0:01:06.959 and hurry, hurry, because they're selling out fast. No joke, 0:01:07.080 --> 0:01:09.480 that's not a ploy. That's not as a marketing ploy. 0:01:10.400 --> 0:01:13.360 They're really selling fast. We get emails every time. Guys, 0:01:13.400 --> 0:01:16.000 you told me to hurry, I didn't hurry. I'm shut out. 0:01:16.920 --> 0:01:20.280 And since this promos petered out, it ends right now. 0:01:21.600 --> 0:01:25.040 Welcome to stuff you should know from how Stuff Works 0:01:25.040 --> 0:01:34.119 dot com. Hey, and welcome to the podcast. I'm Josh Clark, 0:01:34.160 --> 0:01:37.880 and there's Charles W Chuck Bryant, and it's just us. 0:01:39.080 --> 0:01:43.200 We've been abandoned this week now. No one was in 0:01:43.280 --> 0:01:46.800 there for a second earlier, but it's like home alone. 0:01:48.680 --> 0:01:51.560 Ah boy, I love that movie. When it came out. 0:01:52.520 --> 0:01:55.920 Oh yeah, yeah. I thought the sequence, the big break 0:01:56.000 --> 0:01:59.480 in sequence where he had everything rigged that fifteen or 0:01:59.480 --> 0:02:01.480 twenty minute I thought that was one of the funniest 0:02:01.520 --> 0:02:03.760 things I've ever seen. It was a pretty good movie. 0:02:03.840 --> 0:02:06.680 I just laughed and laughed and laughed. Was that a 0:02:06.760 --> 0:02:12.200 John Hughes movie? Yeah? Okay, makes sense that Chicago Suburbs 0:02:12.200 --> 0:02:18.280 setting he loved, Yes he did. R I P Chicago 0:02:18.360 --> 0:02:22.239 Suburbs alright, P John Hughes. Oh I see that makes 0:02:22.280 --> 0:02:25.160 way more sense. Yeah. It was just a couple of 0:02:25.240 --> 0:02:29.080 years ago, right, not too long ago, for sure, Within 0:02:29.120 --> 0:02:33.000 the last five I would say, Man, all those great movies, 0:02:33.480 --> 0:02:40.959 cry baby um in Flamingos, Nope, Apocalypse now, yeah, he's good. 0:02:41.240 --> 0:02:43.399 Oh wow. He passed away in two thousand nine, so yeah, 0:02:43.440 --> 0:02:48.360 seven years ago. What No? Wow? Yeah, I thought it 0:02:48.360 --> 0:02:50.800 was way more recent than that. Time flies in a 0:02:50.800 --> 0:02:53.520 world without John Hughes, you know where time doesn't fly 0:02:53.680 --> 0:02:59.800 chuck at the beginning of our episodes kind of drag. 0:03:01.160 --> 0:03:05.800 That's funny. So today we're talking about the possibility, the 0:03:05.840 --> 0:03:11.400 potential of living in this modern American life, this modern 0:03:11.440 --> 0:03:15.680 world in general, without a bank account. Yeah, this ended 0:03:15.760 --> 0:03:17.200 up being a little more interesting than I thought it 0:03:17.240 --> 0:03:21.160 was gonna be. Oh yeah, I'm glad that was the case. 0:03:21.400 --> 0:03:24.079 It was less interesting than you thought it was gonna be. No, no, 0:03:24.400 --> 0:03:27.120 but I mean we've had some of those before, Like 0:03:27.200 --> 0:03:30.799 jack Hammers comes to mind. That was better, it was 0:03:30.800 --> 0:03:34.720 going It was the opposite. I was like, wait, wait, wait, 0:03:34.760 --> 0:03:37.360 there has to be more on jack Hammers than this. Nope, 0:03:38.200 --> 0:03:41.680 that was your pick. Yeah, it was no forever bear 0:03:41.760 --> 0:03:46.640 that cross. So you would think that banks in general 0:03:47.120 --> 0:03:53.000 is ubiquitous and huge and powerful and um out of 0:03:53.040 --> 0:03:58.280 control as they are had been around for millions of years, right, 0:03:59.640 --> 0:04:05.040 Terry maybe not millions, tens of thousands of years. Uh. 0:04:05.080 --> 0:04:08.200 It turns out actually the bank, the concept of the 0:04:08.200 --> 0:04:11.480 bank as we see it today, is actually only about 0:04:11.560 --> 0:04:15.240 five hundred or so years old. Yes, I would have 0:04:15.280 --> 0:04:17.560 guessed way older than that. Yeah, and I'm glad this 0:04:17.680 --> 0:04:19.920 article did a little history there, because I didn't know 0:04:20.040 --> 0:04:24.960 any of this stuff. Um, the first actual bank, kind 0:04:24.960 --> 0:04:27.279 of modern bank that we think of as a bank, 0:04:28.080 --> 0:04:31.719 was the Bank of St. George or the Banco the 0:04:31.760 --> 0:04:39.039 San Giogio in Genoa, Italy or is it Genoa. I've 0:04:39.080 --> 0:04:44.800 always seen Genoa, Genoa, Genoa, Genoa. So that was um. 0:04:44.880 --> 0:04:46.880 And and they point out in this article that wasn't 0:04:46.960 --> 0:04:53.880 the invention of banking, because banking is different than a bank. Yeah, 0:04:53.960 --> 0:04:58.000 banking actually did start several thousand years ago, as far 0:04:58.080 --> 0:05:02.760 as far back as Mesopotamia and Egypt. And this article 0:05:02.800 --> 0:05:05.599 says that the that grain started to be kept in 0:05:05.640 --> 0:05:10.039 temples in a grain bank, I saw gold. But the 0:05:10.160 --> 0:05:13.120 upshot of it was is that these temples that were 0:05:13.120 --> 0:05:17.080 built were basically sacrosanc the armies would protect them with 0:05:17.120 --> 0:05:20.000 their lives. So it would just make sense that if 0:05:20.040 --> 0:05:24.320 you wanted to store something extremely precious and valuable UM 0:05:24.360 --> 0:05:27.520 like gold, We'll just put in a temple, so the 0:05:27.600 --> 0:05:30.960 earliest reserve banks I guess you could put it, or 0:05:31.120 --> 0:05:35.840 temples in Egypt and Mesopotamia. And then one at some 0:05:35.920 --> 0:05:39.280 point some of the local people or local rulers came 0:05:39.279 --> 0:05:42.200 along and said, hey, I really need some money. You 0:05:42.200 --> 0:05:44.280 guys have tons of gold just sitting in there. Can 0:05:44.320 --> 0:05:46.479 I borrow some of it? And then I'll give you 0:05:46.600 --> 0:05:49.680 that amount back plus a little more for letting me 0:05:49.760 --> 0:05:52.960 borrow it? And they said, why should we call this? 0:05:54.480 --> 0:05:57.880 And they call it banking. Do you know where that 0:05:57.920 --> 0:06:01.640 work came from? No? I don't either, because they probably 0:06:01.640 --> 0:06:03.839 didn't call it banking. They probably called it like sun 0:06:03.880 --> 0:06:09.400 crow or something like that. So, uh, let's go back 0:06:09.400 --> 0:06:13.920 to UM in Italy. And this is when Italy had 0:06:14.120 --> 0:06:18.000 a city states. Oh wait, I had more, I had more. Yeah, 0:06:19.160 --> 0:06:21.760 it's it actually is kind of interesting. All right, Well, 0:06:21.880 --> 0:06:25.400 let me down the machine. Okay, yeah, just keep it idling, 0:06:25.800 --> 0:06:31.560 keep on um. They so you had the initial banking practices, 0:06:31.600 --> 0:06:34.120 and they kept developing and developing, and then Greece and 0:06:34.279 --> 0:06:37.240 Rome really kind of took them and and went to 0:06:37.240 --> 0:06:41.799 town with them, and things like UM book transactions where 0:06:41.839 --> 0:06:44.600 you could go into a bank in one city in 0:06:44.920 --> 0:06:50.000 deposit some money, and the banquet handle credit arranging credit 0:06:50.040 --> 0:06:51.640 for you in another city, so you didn't have to 0:06:51.640 --> 0:06:54.120 travel from one city to another, which is very dangerous 0:06:54.279 --> 0:06:56.320 with a bunch of money on you. It's a book 0:06:56.360 --> 0:06:59.000 transaction that came from like the Greeks and the Romans, 0:06:59.200 --> 0:07:02.039 and these were going to smoothly. And then Rome fell 0:07:02.839 --> 0:07:06.160 and it was replaced by the Holy Roman Empire, which 0:07:06.200 --> 0:07:10.400 was a Christian empire, and Christianity had this very strict 0:07:10.480 --> 0:07:16.120 rule against usury, and usury today means extremely high interest rates, 0:07:16.720 --> 0:07:20.760 whereas at at the origin of the word it meant 0:07:20.840 --> 0:07:24.080 just charging interests at all. So there was no money 0:07:24.120 --> 0:07:28.600 whatsoever in banking UM, so there weren't any bankers. Well, 0:07:28.720 --> 0:07:33.240 the Jewish faith didn't have any rules against usury. So 0:07:33.600 --> 0:07:36.600 as the Holy Roman Empire was in in UH in 0:07:36.760 --> 0:07:40.400 power for these several hundred years, they fulfilled the banking 0:07:40.720 --> 0:07:45.240 UH industry UH until finally about the I think thirteenth 0:07:45.240 --> 0:07:49.680 and fourteenth century when UM, like the Italians started to 0:07:49.720 --> 0:07:53.120 get into it and they kind of created that that 0:07:53.320 --> 0:07:56.960 UM modern banking system that we see today. Can I 0:07:57.000 --> 0:08:04.680 get back in, Yeah? Can I? Can we go to 0:08:04.680 --> 0:08:09.520 fourteen o eight, Yes, specifically March fourteen o eight. This 0:08:09.600 --> 0:08:12.840 is UM, like I teased before in Italy, this is 0:08:12.880 --> 0:08:15.960 the at the time of the city state UM, when 0:08:17.200 --> 0:08:19.720 you would go to war with one another within your 0:08:19.760 --> 0:08:26.000 own country UM. Specifically in this case, UH, Genoa was 0:08:26.320 --> 0:08:32.120 getting UH trod upon by Venice. Long long war with 0:08:32.200 --> 0:08:36.280 Venice big rivals. And basically as what happens many times 0:08:36.320 --> 0:08:39.959 in war is it's sort of bled that city state 0:08:40.040 --> 0:08:44.400 of Genoa dry and it was in bad shape. So 0:08:44.640 --> 0:08:47.520 these folks got together. I did look it up. I 0:08:47.520 --> 0:08:50.600 can't remember who it was, though, the initial investors UM 0:08:50.640 --> 0:08:54.160 that started the Bank of St. George, and he said, hey, 0:08:54.200 --> 0:08:57.360 let's create this thing and like literally in a building, UH, 0:08:57.400 --> 0:08:59.920 it will be a bank and we can finance reap 0:09:00.000 --> 0:09:03.440 aim it of all these war debts UH and earn 0:09:03.559 --> 0:09:07.680 a little seven percent on top interest on top of 0:09:07.720 --> 0:09:10.680 it all. And in fact we got a better idea. 0:09:10.679 --> 0:09:12.880 Why don't we even have the power to go and 0:09:12.920 --> 0:09:16.520 collect uh city taxes and customs and stuff to make 0:09:16.559 --> 0:09:20.679 sure we get paid back. And it worked, Yeah, it did. 0:09:20.720 --> 0:09:24.319 They brought Genera out of bankruptcy and apparently the bank 0:09:24.360 --> 0:09:30.920 went on until the nineteenth century, like four hundred years George, Yeah, 0:09:30.920 --> 0:09:33.600 it is cool. Um. One of the reasons probably why 0:09:33.600 --> 0:09:36.120 it was successful is that the people who were overseeing 0:09:36.160 --> 0:09:40.480 it were directly invested into the bank, like substantially, Like 0:09:40.520 --> 0:09:42.600 if you were one of the treasurers, you had to 0:09:42.880 --> 0:09:47.440 um invest at least sixteen thousand lira, which is several 0:09:47.480 --> 0:09:52.960 hundred thousand dollars in today's money, um directly into the bank, right, So, 0:09:52.960 --> 0:09:55.720 so you wanted to see that bank succeed like crazy 0:09:56.120 --> 0:09:58.120 because you were directly invested in it, and if the 0:09:58.160 --> 0:10:00.559 bank went under, you stood to lose quite a bit. 0:10:01.080 --> 0:10:04.280 That's that's not the case with banks today. I mean 0:10:04.320 --> 0:10:08.360 companies and I'm sure including banks too like their employees 0:10:08.360 --> 0:10:12.120 to be invested in the company. But certainly there it's 0:10:12.160 --> 0:10:14.959 not a requirement that you have several hundred thousand dollars 0:10:14.960 --> 0:10:17.880 worth of your company's stock to be a director of 0:10:17.920 --> 0:10:21.959 the bank. And then the bank itself can very easily 0:10:22.000 --> 0:10:26.640 be overextended, um, just because of what are called reserve requirements. Right, 0:10:27.200 --> 0:10:29.360 we should do like a whole episode on banking, by 0:10:29.400 --> 0:10:33.520 the way, Yeah, boy, especially that that fall out recently 0:10:33.559 --> 0:10:40.480 with Wells Fargo. Oh about the fake um, the fake accounts, dude, 0:10:40.679 --> 0:10:42.959 have you seen the ad that they have about it. 0:10:44.559 --> 0:10:48.520 They have this ad and it's almost like they shaved 0:10:48.520 --> 0:10:52.040 off the first five seconds where they admit that their 0:10:52.080 --> 0:10:55.520 people created all these fraudulent accounts, right, and then the 0:10:55.559 --> 0:10:58.800 ad comes in at everyone who has affected will be 0:10:58.880 --> 0:11:02.320 fully refunded. We want to gain your trust back. But 0:11:02.400 --> 0:11:05.679 they never say specifically what they're talking about, like they 0:11:05.720 --> 0:11:09.040 never cop to it. Like it's bizarre. You know that thing, 0:11:09.520 --> 0:11:14.080 it makes it stand out like a sore thumb, you know. Yeah, 0:11:14.679 --> 0:11:18.400 it's an oily, oily, weasily add and they have it 0:11:18.520 --> 0:11:21.000 like it's you know, they've got the Wells Fargo guy 0:11:21.080 --> 0:11:23.920 like running in the background to distract you, to make 0:11:24.000 --> 0:11:26.880 you think about your childhood, playing with stage coaches and stuff, 0:11:27.280 --> 0:11:30.280 and Elizabeth Warren is somewhere like blood dripping out of 0:11:30.280 --> 0:11:36.320 our eyeballs. Yeah, yeah, for Elizabeth Warren circus two ten right, 0:11:37.520 --> 0:11:40.760 So yeah, no, I mean she's watching the commercial and 0:11:41.160 --> 0:11:45.200 crying blood tears. No, I'm saying, Elizabeth Warren circus, who's 0:11:45.200 --> 0:11:47.560 who doesn't ten would have? I think these days she's 0:11:47.559 --> 0:11:51.640 like whatever, No, man, she laid into him? Oh did 0:11:51.679 --> 0:11:55.800 she go after him? Oh yeah, yeah, you gotta see 0:11:55.800 --> 0:11:59.040 that that video. That was pretty awesome. Well, good for her. 0:11:59.200 --> 0:12:03.400 When was that may oh, when when she lambasted him? Yeah, 0:12:03.640 --> 0:12:05.040 it was right after it happened. It was like, you know, 0:12:05.080 --> 0:12:07.320 a month, a month or two ago, okay, because I 0:12:07.320 --> 0:12:10.720 feel like she was a little more lionized in the 0:12:10.840 --> 0:12:14.000 last several years than she has been lately. Yeah, I 0:12:14.000 --> 0:12:16.600 mean she she went after specifically. I mean she just 0:12:16.640 --> 0:12:19.400 read the riot Act to the CEO. That's good, and 0:12:19.600 --> 0:12:23.920 was like, are you going to give back your bonus money? 0:12:24.280 --> 0:12:26.120 Like this happened on your watch? Why don't you give 0:12:26.160 --> 0:12:28.760 that money back? He was like, who are you talking 0:12:28.760 --> 0:12:31.520 to me? But one of the one of the things 0:12:31.520 --> 0:12:34.480 I wanted to say though about banks, um that that 0:12:34.679 --> 0:12:37.040 is just such in such stark contrast to the idea 0:12:37.120 --> 0:12:41.960 where you used to have to um contribute your own money. Um. 0:12:42.040 --> 0:12:44.640 The reserve requirements of banks. I was looking into this, Chuck, 0:12:44.640 --> 0:12:49.559 you ready, if if if there's a ten percent reserve 0:12:49.600 --> 0:12:54.920 requirement of um that a bank has, and they they 0:12:55.000 --> 0:12:58.360 have a hundred dollars, they can loan out ninety of 0:12:58.400 --> 0:13:02.200 that hundred dollars to somebody, right, Okay, so they have 0:13:02.200 --> 0:13:04.560 a ten percent in reserve. Now, let's say that that 0:13:04.640 --> 0:13:09.000 person um writes a check for that ninety dollars, like 0:13:09.040 --> 0:13:13.840 they borrowed that hundred bucks to um to, or they 0:13:13.880 --> 0:13:16.840 borrowed that ninety bucks to pay off a debt. So 0:13:16.880 --> 0:13:19.000 they write a check for that ninety bucks to somebody 0:13:19.000 --> 0:13:21.000 who banks with that bank, So that ninety bucks comes 0:13:21.080 --> 0:13:25.439 right back to that bank, right they they can loan 0:13:28.400 --> 0:13:31.600 of that, and so on and so forth until this 0:13:31.800 --> 0:13:35.560 one hundred dollar chunk can be like loaned and repaid 0:13:35.559 --> 0:13:38.920 and loan and repaid all over the place, which makes sense, 0:13:38.960 --> 0:13:42.640 and it keeps everything kind of going um financially. But 0:13:43.040 --> 0:13:45.400 the problem is that if something happens, if a panic 0:13:45.480 --> 0:13:47.679 sets in. This is why runs on banks are so 0:13:47.880 --> 0:13:52.080 um such travesties, and everybody calls in their loan all 0:13:52.120 --> 0:13:54.520 at once. Well, there's a lot of people who are 0:13:54.520 --> 0:13:59.040 calling in that one single hundred dollar hundred dollars rather 0:13:59.080 --> 0:14:04.040 than having the time to pay to to to pay 0:14:04.040 --> 0:14:06.160 it back and then call it in from somebody else 0:14:06.160 --> 0:14:08.120 and use that to pay the other person back. It's 0:14:08.160 --> 0:14:11.760 just a big cluster all at once. That makes sense. 0:14:12.880 --> 0:14:16.160 That's just one of the many interesting things about banks. Yeah, 0:14:16.360 --> 0:14:19.040 I mean, there are clearly other podcasts that we should 0:14:19.040 --> 0:14:22.200 tie to this one, I think, but since this one 0:14:22.280 --> 0:14:26.840 is about not banking, we'll take a break. Here, go 0:14:26.960 --> 0:14:53.360 withdraw our funds, and we'll be right back. All right. So, 0:14:53.440 --> 0:14:58.280 if you live in modern society today, uh, it is 0:14:58.320 --> 0:15:05.400 pretty tough to get by without a bank. Um, most 0:15:05.440 --> 0:15:09.120 cases these days, you have well I don't know about 0:15:09.120 --> 0:15:12.880 most cases, but in many cases you have automatic deposits 0:15:12.920 --> 0:15:16.360 of your of your work checks. A lot of people 0:15:16.600 --> 0:15:22.800 pay their bills wirelessly online directly from their bank. Uh. 0:15:22.840 --> 0:15:24.680 You might have a student loan, you might have a 0:15:24.680 --> 0:15:27.680 car loan, you might have your house mortgage, you might 0:15:27.720 --> 0:15:30.280 pay your credit card bills. All of this stuff is 0:15:30.360 --> 0:15:33.840 running through a bank most likely. And you would think 0:15:34.360 --> 0:15:38.520 it's probably impossible to not have a bank account these days. 0:15:39.160 --> 0:15:42.520 And I would say pretty much all Americans have them. 0:15:42.560 --> 0:15:50.000 Not true, You well know, pretty much all Americans do. Like, yeah, 0:15:50.040 --> 0:15:53.240 but that's not all. No, No, it's true. Yes, seven 0:15:53.240 --> 0:15:56.560 percent of Americans do not have bank accounts. About nine 0:15:56.600 --> 0:15:59.640 million people last year in two thousand fifteen did not 0:15:59.640 --> 0:16:02.200 have bank accounts. Not million peoples, a lot of people. No, 0:16:02.280 --> 0:16:05.920 it really is, um, and apparently that's that's households, sorry, 0:16:05.960 --> 0:16:08.160 not people. Yeah, you're right, you're right. That is a 0:16:08.200 --> 0:16:12.320 big distinction to UM. And the f d i C said, man, 0:16:12.400 --> 0:16:15.720 that's the lowest since we've been tracking this by far, 0:16:16.480 --> 0:16:18.880 And someone said, well, how long have you been tracking this? 0:16:19.280 --> 0:16:23.520 They said, well, of the last six years really yeah, 0:16:23.520 --> 0:16:26.720 which I'm like, really that's when they started tracking it. 0:16:26.920 --> 0:16:29.880 But apparently so two thousand nine. So if you want 0:16:29.920 --> 0:16:32.720 another number, that's the nine million American households don't have 0:16:32.720 --> 0:16:35.680 bank accounts at all. Uh. Then there are twenty five 0:16:35.680 --> 0:16:39.520 million households in addition to that, so that makes almost 0:16:39.520 --> 0:16:43.000 that's like thirty four million households, which that's a substantial 0:16:43.080 --> 0:16:46.520 number at this point. The twenty million or what's called 0:16:46.600 --> 0:16:50.400 underbank meaning they may have a bank account, but they 0:16:50.480 --> 0:16:55.640 don't use the bank account. Yeah, they don't use it because, UM, 0:16:56.360 --> 0:17:04.160 they are probably afraid of overdraft fees, or they have uh, 0:17:04.320 --> 0:17:07.800 maybe a bank account that got grandfathered in so that 0:17:07.840 --> 0:17:12.680 they don't have to pay minimum amount fees UM and 0:17:13.080 --> 0:17:15.159 who knows. There's all sorts of reasons for people to 0:17:15.280 --> 0:17:19.120 not use a bank account that they they have, UM, 0:17:19.160 --> 0:17:21.760 but probably chief among them is overdraft, which you'll talk 0:17:21.800 --> 0:17:24.920 more about. Yeah, and the majority of these underbank people 0:17:24.920 --> 0:17:30.440 in the United States are poor usually um, A lot 0:17:30.440 --> 0:17:32.919 of times, their minorities, a lot of times they are 0:17:33.000 --> 0:17:38.040 less educated. Um. And these communities, I mean, there's there's 0:17:38.040 --> 0:17:39.919 a few reasons why they may not want to use 0:17:39.920 --> 0:17:42.880 a bank. One, maybe they don't trust banks. And if 0:17:42.920 --> 0:17:45.160 you look in the history of the United States, are 0:17:45.200 --> 0:17:48.320 certainly even we're just talking about the Wells Fargo scandal. 0:17:48.720 --> 0:17:52.160 Like when you see stuff like that on the news, um, 0:17:52.200 --> 0:17:54.960 it should be upsetting to everyone. But obviously if you're 0:17:55.000 --> 0:17:57.840 poor and you don't have a lot of money, that 0:17:57.960 --> 0:18:00.640 will that may scare you into not wanting to use 0:18:00.640 --> 0:18:04.479 a bank at all, right, you know. Yeah. And another 0:18:04.480 --> 0:18:09.439 one is that the overdraft fees, which so basically, I 0:18:09.440 --> 0:18:14.760 guess in two thousand one, the current overdraft fee idea 0:18:15.359 --> 0:18:17.879 scam you could call. It was set up as a 0:18:17.880 --> 0:18:20.440 way to generate like way more money for banks, right. 0:18:21.640 --> 0:18:24.520 And the way that overdraft fees generate money for banks 0:18:25.480 --> 0:18:30.080 is when you are overdrafted on your account, they can 0:18:30.160 --> 0:18:34.240 charge you a fee for covering that amount, right, and 0:18:34.240 --> 0:18:37.680 then you still have to deposit that amount, but they 0:18:38.119 --> 0:18:41.160 don't return your check. They cover, They cover the check 0:18:41.200 --> 0:18:43.400 that you paid, but they charge you a fee, say 0:18:43.400 --> 0:18:46.000 like thirty five dollars for that amount. And it seems 0:18:46.000 --> 0:18:49.280 fine and dandy and everything's fine. But there's something called 0:18:49.359 --> 0:18:54.480 clearing checks from high to low, right, okay, where the 0:18:54.680 --> 0:18:59.320 bank will clear checks in descending order of value. So 0:18:59.440 --> 0:19:02.960 if you have of UM a hundred dollars in in 0:19:03.040 --> 0:19:06.680 your bank account and you have a checkout for a 0:19:06.760 --> 0:19:10.240 hundred and fifty dollars, check out for twenty dollars, to 0:19:10.320 --> 0:19:13.440 check out for five, and to check out for fifteen dollars. Right, 0:19:14.800 --> 0:19:18.800 if they cleared the lower amounts first and then the 0:19:18.920 --> 0:19:21.840 last one, only the last one would bounce and create 0:19:21.880 --> 0:19:24.720 an overdraft fee. If they start with the bigger one, 0:19:24.920 --> 0:19:27.040 well you've got an overdraft draft fee right out of 0:19:27.080 --> 0:19:29.800 the gate. But then you also have three more because 0:19:29.840 --> 0:19:32.600 the other smaller checks all bounced as well, and so 0:19:32.680 --> 0:19:35.000 instead of one over draft fee, they get to charge 0:19:35.000 --> 0:19:38.359 you four overdraft fees UM. And that was a huge 0:19:38.480 --> 0:19:42.280 thing when when that was finally reported and exposed, and 0:19:42.359 --> 0:19:46.119 that actually resulted in that UM rule that now you 0:19:46.359 --> 0:19:49.639 UM either I think you have to opt in for 0:19:49.760 --> 0:19:53.560 overdraft protection, whereas before you had to opt out. Yeah. 0:19:53.720 --> 0:19:57.520 I remember back in the day when I was broke 0:19:57.560 --> 0:20:02.440 as back and I would overdraft things in there, I remember, 0:20:03.000 --> 0:20:06.960 and I knew nothing about how things worked with finances. 0:20:07.080 --> 0:20:11.040 Still don't really, but um, I just remember thinking, like 0:20:11.119 --> 0:20:14.680 I would rather it's say no, you you like, don't 0:20:14.720 --> 0:20:17.159 cover me and then charge me. Just just say no, 0:20:17.240 --> 0:20:19.560 you don't have the funds, right, that's the smart way 0:20:19.640 --> 0:20:23.280 to do it. So I never understood, like it was 0:20:23.320 --> 0:20:27.040 like I think they even called it overdraft insurance maybe 0:20:27.080 --> 0:20:29.280 at the time, or I might be making it up. 0:20:29.320 --> 0:20:31.520 I seem to remember them saying that, and I was like, 0:20:31.560 --> 0:20:33.879 I don't want that, like just to like let the 0:20:33.960 --> 0:20:37.840 check bounce and I'll take it up with them. Yeah. 0:20:37.880 --> 0:20:40.520 The way it was marketed though, was like hey, we 0:20:40.560 --> 0:20:43.320 we we value you. We want to make sure that 0:20:43.359 --> 0:20:45.679 you can pay all your bills. So if something happens 0:20:45.680 --> 0:20:47.840 and you're overdrafted, we'll cover it. We're just going to 0:20:47.960 --> 0:20:51.320 charge you a fee. And it sounds good. But again, 0:20:51.359 --> 0:20:53.440 when you go from high to low and all of 0:20:53.480 --> 0:20:56.840 a sudden your overdraft fees go from one to four 0:20:56.960 --> 0:20:59.720 or five or however many, um, you know, that's a 0:20:59.800 --> 0:21:02.280 huge problem. Well, and the people that are overdrafting in 0:21:02.320 --> 0:21:04.600 the people that are at least able to afford those 0:21:04.640 --> 0:21:09.240 fees exactly. So it's a disproportionate burden on the poor, 0:21:09.440 --> 0:21:12.520 which makes it as a scam, one of the more 0:21:12.560 --> 0:21:17.560 evil scams around. Yes, it's just wrong man. So so yeah, 0:21:17.640 --> 0:21:20.920 the idea that that if you are if you open 0:21:21.000 --> 0:21:25.400 an account, you should not opt in for overdraft protection. 0:21:25.760 --> 0:21:28.480 And that's easy to say when when you're talking about 0:21:28.560 --> 0:21:31.320 checks for like, um, you're writing a check for a 0:21:31.359 --> 0:21:35.000 mountain dew and some cheetos, you know, who cares if 0:21:35.040 --> 0:21:36.920 you if you're if you're short for that, you can 0:21:36.920 --> 0:21:39.120 go without that. But you know, when you're talking about 0:21:39.119 --> 0:21:41.760 like your rent check or like an actual grocery bill 0:21:41.840 --> 0:21:45.320 or something like that, you know, it sucks that that 0:21:45.520 --> 0:21:48.240 you can't get that stuff. But it's better to have 0:21:48.320 --> 0:21:50.560 to put a couple of things back than to pay 0:21:50.600 --> 0:21:53.600 thirty five dollars for one two dollar item that that 0:21:53.640 --> 0:21:57.159 you went over by. Yeah, that's a good point. And 0:21:57.200 --> 0:21:59.200 this was in my case too. This is also back 0:21:59.200 --> 0:22:01.560 in the day when you uh, I mean a lot 0:22:01.560 --> 0:22:03.159 of times it was a mystery how much you had 0:22:03.160 --> 0:22:05.640 in your account, Like you couldn't just get on your 0:22:05.640 --> 0:22:09.159 phone and and before you write the check and be like, oh, well, no, 0:22:09.320 --> 0:22:11.240 I don't have enough money to cover this. Yeah, because 0:22:11.280 --> 0:22:14.480 even if you balanced your checkbook, sometimes you forgot to 0:22:14.520 --> 0:22:16.560 carry the one like it wasn't always a d percent 0:22:16.600 --> 0:22:18.840 in accurate. And if you had a life, you didn't 0:22:18.840 --> 0:22:23.080 necessarily rectify your bank checkbook every day. Oh wait, what 0:22:23.160 --> 0:22:27.679 is balancing a checkbook means? Serious? Yeah? Thank god for 0:22:27.720 --> 0:22:31.720 my wife. Um. So another reason you might avoid a bank, 0:22:32.400 --> 0:22:36.879 uh is philosophically. You may um, you may have that 0:22:37.000 --> 0:22:39.600 there may be a longstanding distrust of banks in your 0:22:39.600 --> 0:22:42.119 family that you don't want to put your money in. 0:22:42.359 --> 0:22:44.080 Or you may just want to be like, you know what, 0:22:44.800 --> 0:22:47.880 I don't want to take part in this modern society. 0:22:47.880 --> 0:22:50.080 I want to kind of drop out a bit. And 0:22:50.280 --> 0:22:53.040 a really good first move is to shut your bank 0:22:53.040 --> 0:22:56.280 account down. That's a big statement. Oh yeah it is, 0:22:56.880 --> 0:23:01.320 you know, but a lot of people that are under 0:23:01.320 --> 0:23:05.920 banked and don't have accounts aren't. They're on purpose. It's 0:23:05.920 --> 0:23:10.080 not some philosophical statement. A lot of times is simply 0:23:10.119 --> 0:23:13.159 because uh, they are poor and they don't have a 0:23:13.160 --> 0:23:16.400 lot of alternatives. Yeah. And the other thing about um 0:23:16.440 --> 0:23:19.119 about not having a bank account. Not only do you 0:23:19.200 --> 0:23:22.280 not have a bank account, you also are like basically 0:23:22.320 --> 0:23:24.840 just avoiding banks altogether. There's plenty of other things that 0:23:24.880 --> 0:23:30.760 banks offer, like loans and mortgage stuff like that. Yeah, yeah, 0:23:30.840 --> 0:23:36.360 maybe some free nasty coffee UM. But the so when 0:23:36.400 --> 0:23:38.879 you're when you don't have a banking account, that's like 0:23:38.920 --> 0:23:43.040 the the most basic unit of the banking world. Right. 0:23:43.080 --> 0:23:45.159 If you don't have that, you obviously aren't going to 0:23:45.160 --> 0:23:48.200 be exposed all these other things that can help things 0:23:48.280 --> 0:23:51.040 like um build your credit history through like a revolving 0:23:51.119 --> 0:23:54.639 loan UM or a mortgage or a car loan or 0:23:54.640 --> 0:23:57.080 something like that that you can build up your credit 0:23:57.119 --> 0:24:01.360 for and ultimately save money. UM. So when you don't 0:24:01.400 --> 0:24:05.600 have a bank account for whatever reason, you are effectively 0:24:05.600 --> 0:24:08.800 out of the banking system. The problem is, you can 0:24:08.920 --> 0:24:12.639 live parallel to the banking system outside of it, but 0:24:12.720 --> 0:24:15.480 it can be really dangerous, especially if you're just dealing 0:24:15.480 --> 0:24:18.720 with cash, because that cash has to stay somewhere, and 0:24:18.720 --> 0:24:22.080 whether it's on you or in your mattress or in 0:24:22.119 --> 0:24:26.280 a coffee can in your backyard, you're you're exposed for 0:24:26.280 --> 0:24:30.399 for having that UM readily available to anybody who finds 0:24:30.400 --> 0:24:32.280 it or comes into your house with a gun to 0:24:32.320 --> 0:24:36.560 get it, which is another thing that sucks. Yeah, there's 0:24:36.560 --> 0:24:38.600 no insurance for that. You know, if you lose your cash, 0:24:38.600 --> 0:24:42.240 you lose your cash. So one thing that people rely 0:24:42.359 --> 0:24:45.760 on sometimes these days as an alternative source for a 0:24:45.760 --> 0:24:49.000 loan at least is something called a payday lender. You 0:24:49.080 --> 0:24:51.400