Low-Income Earners and Banking

Chasing fees, banks court low-income customers, By Jessica Silver-Greenberg and Ben Protess, April 25, 2012, New York Times: “When David Wegner went looking for a checking account in January, he was peppered with offers for low-end financial products, including a prepaid debit card with numerous fees, a short-term emergency loan with steep charges, money wire services and check-cashing options. ‘I may as well have gone to a payday lender,’ said Mr. Wegner, a 36-year-old nursing assistant in Minneapolis, who ended up choosing a local branch of U.S. Bank and avoided the payday lenders, pawnshops and check cashers lining his neighborhood. Along with a checking account, he selected a $1,000 short-term loan to help pay for his cystic fibrosis medications. The loan cost him $100 in fees, and that will escalate if it goes unpaid. An increasing number of the nation’s large banks – U.S. Bank, Regions Financial and Wells Fargo among them – are aggressively courting low-income customers like Mr. Wegner with alternative products that can carry high fees…”