Thread: Orwellian Double Speak...Beyond Payday Loans: The Unbanked

This Commentary is full of Orwellian Double Speak: replace the term "unbanked" with "illegal aliens" and the true intent of the article becomes readily apparent. A very transparent ploy to pressure banks to ramp up their outreach to the illegal alien community with the goal of entrenching them further into the community.


COMMENTARY
Beyond Payday Loans
By WILLIAM J. CLINTON and ARNOLD SCHWARZENEGGER
January 24, 2008; Page A17

The American dream is founded on the belief that people who work hard and play by the rules will be able to earn a good living, raise a family in comfort and retire with dignity.

But that dream is harder to achieve for millions of Americans because they spend too much of their hard-earned money on fees to cash their paychecks or pay off high-priced loans meant to carry them over until they get paid at work.

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists: helping the "unbanked" enter the financial mainstream by opening checking and savings accounts, and working collaboratively with financial institutions and community groups to develop and market products that work for this untapped market. This will put money in the pockets of individuals and grow the economy. And it won't cost taxpayers a dime.

Imagine the economic and social benefits of putting more than $8 billion in the hands of low- and middle-income Americans. That is the amount millions of people now spend each year at check-cashing outlets, payday lenders and pawnshops on basic financial services that most Americans receive for free -- or very little cost -- at their local bank or credit union. Over a lifetime, the average full-time, unbanked worker will spend more than $40,000 just to turn his or her salary into cash.

Many nonbank customers are either leery of banks or believe they do not have the products they need. The result is that the market for basic financial services is booming. Today, the number of check cashers, payday lenders and pawnshops is more than double the number of McDonald's franchises in the United States. More than 20 million Americans cash more than $60 billion in checks each year at check-cashing businesses. Full-time workers without a checking account typically pay $40 on average to cash their paychecks. And payday lenders sell an additional $40 billion in expensive small-dollar loans each year that carry fees 30 times the average credit-card rate.

But these Americans can become bank customers if they have access to the right products at the right terms, and the support they need to make good, responsible financial decisions. People outside of the financial mainstream are the heart of America. The vast majority of people without bank accounts work, and they have an average household income of $27,000. Most are also married, have at least one child, and are employed by a small business.

And consider that, according to a new Brookings Institution report, as much as $360,000 in pre-tax wealth could be created if the average, full-time unbanked worker invested in the stock market what he will spend over his lifetime paying to cash his paychecks. That would allow one of those workers to finance about 25 years of retirement at his current standard of living.

This year, California will become the first state in the nation to launch an effort to help unbanked residents open starter accounts -- the first step into the financial mainstream. Approximately 11% of California households, including 25% of Latino and African-American households, do not have a checking account. And nearly half of households in the state don't have a savings account.

In coordination with the Federal Deposit Insurance Corporation, we will partner with financial institutions to increase the supply of starter accounts that work for unbanked consumers and banks. We will form regional coalitions of financial institutions, mayors and community groups to market accounts and help the unbanked build financial literacy. And we will build on work already being done in San Francisco, where city officials, working with banks and credit unions, have already signed up 11,000 individuals who previously had no checking or savings account.

The William J. Clinton Foundation's Economic Opportunity Initiative will help more people enter the financial mainstream by supporting the work of California -- as well as that of mayors in Boston, Los Angeles, Miami, New York, Providence, San Francisco, Savannah and Seattle, each of whom are spearheading their own efforts. It will also work to engage additional cities and states, and the private sector.

We need other leaders across the country in the public, private and nonprofit sectors to join this effort. Banks and credit unions can expand their efforts to broaden access to transaction accounts and alternatives to payday loans with terms attractive to the unbanked and underserved. They already have the storefronts to compete for this business: More than 90% of nonbank alternatives are located within one mile of a bank or credit union branch.

Employers can also help reduce the financial stress in workers' lives and boost workplace morale by helping employees to gain access to banking services, and to save and better manage their finances. Community-based organizations can work with the public and private sectors to help people access the trustworthy, high-quality money management support they may need to develop and sustain good personal financial practices.

By working together, we can improve the lives of millions of people, boost our economy, and strengthen our communities.

Mr. Clinton was the 42nd president of the United States. Mr. Schwarzenegger is governor of California.
http://online.wsj.com/article/SB1201136 ... mmentaries

The Terminator and the Cigar Man create a new class of victims...the "unbanked". More precisely the "unbanked" illegal aliens. Should the new politically corect term for illegal aliens now be "the unbanked"

Here is one initiative that can unite progressives and conservatives as well as business leaders and community activists:

I have no interest in directly 'helping' either of those groups - thank you very much.
They are probably funded better than myself, or most other Americans...

Imagine the economic and social benefits of putting more than $8 billion in the hands of low- and middle-income Americans

But, are they really "Americans", or is this codespeak for "other people". And, an objective view of the amounts involved here, would suggest that while it may sound like a lot, $8 billion is not all that much really (we spend that in Iraq each month)

Imagine, also, those same 'unbanked' individuals spending hundreds of billions of dollars in local US communities - thus, ensuring that the money remains and is re-used in the country.. (rather than being 'sent home' where it represents only a net loss and via the 'mining' of US economic resources)


The truly silly part of this article is that there is almost no impediment nor prohibition for any US citizen or legal resident to do such thing today...

This year, California will become the first state in the nation to launch an effort to help unbanked residents open starter accounts -- the first step into the financial mainstream. Approximately 11% of California households, including 25% of Latino and African-American households, do not have a checking account. And nearly half of households in the state don't have a savings account.

Don't be fooled. They threw African-Americans in there as a dodge to not have you think what they are really referring to: illegal aliens.

as well as that of mayors in Boston, Los Angeles, Miami, New York, Providence, San Francisco, Savannah and Seattle

Aren't these all sanctuary cities for illegal aliens, except maybe Sanannah? Which, according to Arnold and Bill, it looks like they woon will be.

So what action are folks taking?????

Another excellent article on this WSJ Op Ed piece:
http://acertainslantoflight.net/?p=2265

The unintelligent create a new term--the "unbanked". As an "uninformed" American I am "unsure" of what these two men have said in "unison". It may be "unacceptable" to most of us. It is not an "untried" item, though. I do believe BOA has already tried this and and had an "unexpected " poor 4th quarter. It is possible BOA experienced this because a lot of Americans "unemptied" their accounts at BOA. They felt it was "unusual" for an American company to aid and abet the "undocumented".
Well, I guess they are learning a lesson. Perhaps , if they do not change their ways (Clinton, Arnie, BOA and all the rest), they will go "under"

"Until later" Tata!!!!

I dont understand how a bank could open accounts for the " unbanked" for these reasons.

First, banks are heavily regulated by the Federal goverment for example: When we open new accounts just two of the BIG regulations that we run everyone through when opening new accounts are the BSA { Bank Secrecy Act } and OFAC { Office of Foreign Asset Control} We HAVE to have these five things:
1} A US ID
2} A Social Security Number { or INA from the IRS }
3} A US address { if different than their ID, they have to prove where they live, not just state an address.
4} Date of Birth
5} Name

All these HAVE to match up. If we get a hit on the OFAC list which happens often we have to send that into our compliance officers who have to research it before the account is either open, or can continue to stay open. We have to be exact in these proceedures or we { The Bank }
face huge Federal fines, or they can close us down, and at the very least we lose our jobs.

We also run EVERYONE through a program like Chexsystems, this tells us of course if they had problems at other banks for NSF's etc. But it also tells us when their Social Security number became available, if there are other names tied to the Social, if their drivers license is current or restricted etc.

So, forgive me if this was tedious. The point I was trying to make was, how can a Bank comply with Federal regulations and open accounts for illegal aliens too? And if banks are opening these accounts, how are they in compliance?