Local banks take advantage of those in trouble
In addition to poverty, those with little money suffer from the banking system itself. Banks restrict access to bank accounts, making it difficult for those with poor credit or who have no home to engage in the basic economic services needed to lead a decent life.
All banks charge hefty overdraft fees, ranging from $25 to $35 for a single item, taking advantage of the middle class. The challenges are even greater for people living unsheltered, or homeless. Banks accumulate tens of thousands or millions of dollars a year from these fees, a significant part of their profit model.
We visited Salem area financial institutions to learn more about the obstacles financially challenged people face. Selco Bank confirmed that in order for a person to have an account, they have to have a physical address. Although a credit record is not required by some banks, and even poor credit is not disqualifying, all banks use ChexSystems to track fraudulent activity. No one listed as having committed financial fraud is approved for any kind of bank account.
A representative at Union Bank said that they do not run background checks or credit reports on prospective clients, and that customers who have had banking issues can apply for “access accounts” that allow them to have a bank account with limited services.
In our initial outreach we called numerous banks throughout Salem, asking to schedule interviews to discuss how the bank functions in the community. We contacted local branches of multinational corporations such as Bank of America and Chase Bank, as well as credit unions such as Umpqua and Pioneer Trust Bank. Some said that they would get back with us; others said that they would have to contact their main office; and and yet more simply said that they would think about it. No banks responded. It was very disappointing: if we – journalists – can’t easily glean information about banking practices, how can the poor people get a response? So we continued our research by approaching the banks directly.
REQUESTS FOR BANKS
— Fair treatment of poor people or those in trouble.
— Stop predatory practices such as excessive overdraft fees.
— Take into account where money is invested, social justice, and environmental effects.