BoA is Closed for Working Folks
Recently, in January 2018, Bank of America announced that they will be ending their no-maintenance fee online checking accounts.
This sparked outrage from many customers, particularly customers from low-income communities. For someone who has to stretch their paycheck to make ends meet, this monthly fee for banking services is not ideal. The only ways to avoid the monthly maintenance fees are to either set up direct deposit amounts of at least $250, maintain a daily balance of $1,500, or prove that you are a student under the age of 24. $1,500 is extremely unfeasible for a low-income earner. Customers have started an online petition at change.org in hopes of stopping this contribution to economic injustice. Bank of America is just one recent example out of many involving a large financial institutions abandoning people from low-income communities.
This pattern of how large financial institutions exclude low-income communities stems from the lower revenue the financial institutions receive from these communities. As exemplified in the Bank of America situation, many people from low income communities can not afford monthly maintenance fees, overdraft fees, or maintaining a minimum balance. Larger financial institutions rely on these fees to thrive, among other fees associated to their institution.
At the end of the day, it becomes less about being an effective service for people and more about the bottom line.
Despite the fact that financial health is just as important as your physical and mental health, these institutions shut down their bank branches in low income communities in hopes of reducing the number of low income earners associated with their financial institution. Where have people traditionally turned to when these large banking institutions fail to accommodate for their specific financial needs? Check cashing stores.
Check cashing stores are not as beneficial as some may think. Yes, they are typically open 24 hours. However, since they don’t offer checking or savings accounts, cashing your check at these places often means that you are carrying a large wad of cash right after your transaction. This can be unsafe for you, not only because there’s no way to get that money back once it is lost or stolen, but it also prevents you from being able to properly manage and budget your money for purchases.
Additionally, when you take a deeper look into the fees for the services check cashing services can provide, they typically charge between 1-10% of your personal or government checks when you cash it (percentage varies depending on the store). For example, if your check is $1,500 and the check cashing store charges 5% to cash your check, you are walking away with only $1,425.
That’s part of your hard earned money taken away!
Luckily, MoCaFi is a Fintech company that combines the convenience of a check cashing store as well as the safety and security of a bank. With MoCaFi, you have the benefits associated with a prepaid debit card plus the mobility of the app helps you fulfill your banking needs from wherever you are. You now have more control and transparency in your finances. If you’re looking for the right services for you, you found it with MoCaFi.