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Wednesday, September 12, 2012

The Twilight of Banking

Posted by on Wed, Sep 12, 2012 at 8:27 AM


The number of people who don't have bank accounts is on the rise, as many Americans turn to alternative ways of getting cash — like payday loans, pawnshops and check-cashing services.
About 8.2% of U.S. households, or nearly 10 million, lack a bank account, according to a report released Wednesday by the Federal Deposit Insurance Corporation. That's up from 7.7%, or about 9 million households, in 2009.

What's next? Let's turn to the Fatherland of our president, Kenya:

What if anyone owning a cell-phone, whether rich or poor, also had access to financial services with the ability to save and send money safely, no matter where they are located? This is not science fiction; in fact it is already happening in Kenya, which has become the world’s market leader in mobile money.
Today, Kenya has more cell-phone subscriptions than adult citizens and more than 80 percent of those with a cell phone also use “mobile money” (or “M-PESA” which is very different from “mobile banking” as Michael Joseph–the former Safaricom CEO, and the man behind that revolution—can explain passionately!).

here are approximately 60 million mobile money users in the world, which means that almost one in three is a Kenyan. Half of all mobile money transactions are taking place in Kenya where annual transfers are now around US$ 10 billon.

Also remember that, from a global perspective, the average person is more likely to have cell phone than a bank account.


Comments (14) RSS

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pragmatic 1
Don't go to check cashing services, they're thieves. Instead, get a credit union account. Financial education is one of the major problems in the poor communities in this country and should be part of basic education in schools. If it had been all along I doubt that our housing bubble would have been nearly as bad as it was.
Posted by pragmatic on September 12, 2012 at 8:57 AM · Report this
2 I was thinking about this yesterday.

In a modern world, the bank account -- or personal money storage -- becomes obsolete.

Imagine a world, where every child born is "capitalized" with a lifetime loan.

This loan would fund his or her education up to college. This loan would pay for food, clothing -- no matter what. This loan would fund the first house, the first car, the first medical emergency.

If the person's life is profitable...they would pay back the bank...and add money for others to draw from. If the person ends up with nothing, we write off the loan, like a bad business.

This is Cloud Banking.

This is the private sector creating businesses.

Posted by Supreme Ruler Of The Universe http://_ on September 12, 2012 at 9:05 AM · Report this
lark 3
Good Morning Charles,
I'm not so sure that is a good thing. Democratic Republic of Congo and Haiti too have a very large % of mobile money users. The technology insures a greater degree of accurate access & safety largely because the infrastructure is either dated, deteriorating or even broken. However, that is more a sign of relief operations than of human development. I do believe thrift (banks, credit unions etc.) is necessary especially for posterity. I'm dubious that these phones enable greater savings. But, we'll see.
Posted by lark on September 12, 2012 at 9:10 AM · Report this
rob! 4
That is also, @2, "from each according to his abilities; to each according to his needs."
Posted by rob! on September 12, 2012 at 9:17 AM · Report this
We're lucky here in Seattle that we have a lot of choice and easy access to credit unions. Travel around the country and you'll see that we're definitely not the norm. Talk to the working poor and they'll tell you that they've closed their bank accounts after the banks hit them with so many fees for not having enough money deposited that it didn't make any sense to keep the account. $15/month = $180, which may be less than the fees from check cashers and payday loans, but it's still a lot of money to pay for nothing but hassles from a typical bank.
Not only the fees, but these days the banks will do credit checks on you just to open an account and if you have any fees due to another bank, then they won't even let you open an account.
Posted by SPG on September 12, 2012 at 9:43 AM · Report this
Will in Seattle 6
Credit unions ftw!
Posted by Will in Seattle on September 12, 2012 at 10:51 AM · Report this
thatsnotright 7
It isn't a twilight of banking it is a new dawn of methods to make people pay more for accessing their personal capital. As others have said check cashing services and pay day loan institutions charge much higher fees than even the worst banks. These fees are hardest on the poor because the represent a greater percentage of their income. Let's hope for reputable global electronic credit unions or thrifts which can bring secure financial services to emerging econimies.
Posted by thatsnotright on September 12, 2012 at 11:00 AM · Report this
treacle 8
@2 - Oh god, that sounds horrible. That world sounds like the complete return of debt peonage. What if you can't pay be the "loan" you never asked to take out? Do you have to work in the prison factory at $0.80/hr until you pay it off?

There more to life than "being profitable", you know. That is a dangerously skewed version of reality... skewed by the capitalist market mentality, mesuspects.
Posted by treacle on September 12, 2012 at 11:24 AM · Report this
keshmeshi 9

You beat me to it. I'll bet most of the decline in banking isn't a refutation of banking practices so much as a result of this shitty economy. If you're poor, no bank will have you.
Posted by keshmeshi on September 12, 2012 at 11:27 AM · Report this
@5: Pretty much every city the size of Seattle has a good selection of credit unions. Nothing particularly special.

Now if you're talking rural areas that's a different story.
Posted by bigyaz on September 12, 2012 at 11:49 AM · Report this
Will in Seattle 11
FDIC does not back credit union accounts, so a drop in their money supply does not mean a drop in US financial reserves.

Additionally, with interest rates at record lows, and credit unions paying more for savings deposits than banks do, you'd have to be crazy to keep cash in a US bank.

Rural areas can have credit unions too, @10, I used to belong to the Kaslo Credit Union, only 1000 people lived in Kaslo.
Posted by Will in Seattle on September 12, 2012 at 12:16 PM · Report this
Eastpike 12
Sure, the number of people without accounts is going up, but so is the number of people with bank accounts. It's still something, but "twilight"? hardly.
Posted by Eastpike on September 12, 2012 at 1:50 PM · Report this
Mudede, do you have the slightest fucking awareness of the way nations are run? Or does the authorship of too many fucking movies no-one watches cause immunity to common sense? Banks aren't fucking going away. Banks are so essential to the modern economy that their cessation would be the end of EVERYTHING.

Good to see you put ideology before practicality. And you get fucking paid for it too. That's a great fucking gig, isn't it? I get to pontificate about shit I know nothing about and appear a messiah. Meanwhile, real crimes go committed, but fuck them because I'm an exploited nigger.

Why don't you cry more about how Western Imperialism allowed you to have such a great education instead of having to fight over essential resources with those niggers over the other hill?

Truth is, you owe white people your life and your nice state of living. You'll never admit that, though. You earn to much from white guilt and now depend upon it.
Posted by Central Scrutinizer on September 12, 2012 at 6:10 PM · Report this
Pridge Wessea 14
@13 - you continue to be a loathesome creature.
Posted by Pridge Wessea on September 13, 2012 at 12:23 AM · Report this

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