Good news everybody. We will all save BILLIONS on bounced checks!

Photo above - Welcome to Braavos. The Iron Bank is that giant building on the left. Make sure you understand what their fees are before you open an account.

Here’s a term people outside the financial services industry seldom hear: “Unbanked”. It’s a clever way of saying someone hasn’t got any of the following: checking account, savings account, debit card, credit card . . .

The unbanked mostly didn’t achieve this by choice. They were put on blacklists, because they have repeatedly overdrawn their checking accounts, passed bad checks, forged checks, or attempted ATM fraud. I could keep going, but there a LOT of ways you can get on the banks' $hit list. Then they won’t open any more checking or savings accounts for you.

The unbanked are the people you see paying cash for their groceries and gasoline. You might think they’re economically secure, because they have a couple hundred dollars in a wallet or purse. You’d be wrong. That $200 is all the money they have in the world. Until the next payday, or government check.

The legion of the unbanked is about to expand. A LOT. President Biden has a going away present for everyone. The white house is going to limit overdraft fees (for paying checks when your account is empty) to just $5. See link below.

This is going to be great. As long as you actually have a savings account. Today overdraft fees can be $19, $29, $39. Call your bank and find out for sure. If you get hit with a $29 fee and pay it, the bank figure’s you’re a decent risk, despite overdrawing your account. If you can’t (or won’t) pay it, they close your account. You are now unbanked. You’re on the list. Any bank using the list won’t open an account for you. A credit union might. Some credit unions use the holy list, some don’t. Call around. But prepare to be unbanked. And find the nearest check cashing service at the “bad mall” across town. That’s where you will get your paycheck turned into cash, so you can go to the grocery store. Check cashing fees vary . . . but most are in the 5% range. A $500 payroll check could cost you $25 to cash.

If banks are limited to $5 overdraft fees, a bunch of them (the big money center banks like Chase, Citi, B of A, Wells Fargo) are just going to say “eff it” when customers bounce a couple of checks. Put you on the list. You will be unbanked. Now you can start paying 25 bucks to cash your check at the place next to the liquor store.

Are we having fun yet?

There are no good options here. $29 is a LOT for an overdraft fee. But signing an agreement to have the bank dishonor your checks when your balance is too low makes you a pariah with everyone who has your check bounce. Your apartment complex will probably assess a late fee if your monthly rent check bounces.

Some brainiac is going to immediately suggest “Tell Biden to stop those damn check cashing fees. Limit THOSE to a max of $5 too.” Which would immediately cause 90% of the check cashing stores to close. Some places – like McDonalds – WILL pay burger flippers and cashiers with prepaid debit cards. You get this every two weeks, just like a paycheck. But some of those have fees too.

I wish I had better news. I don’t like overdraft fees, check cashing fees, late fees, overlimit credit card fees, monthly account fees, annual fees. I also don’t like personal income taxes, social security taxes, Medicare taxes, sales tax, liquor taxes, gasoline taxes, cigarette taxes, highway tolls, 911 service surcharges on my cellular bill. Airport boarding fees. Parking fees. And why isn’t cable and internet free? The freakin' wires have been there for years and years . . .

We live in a nation where 20% of Americans didn’t finish high school. Where the average reading level is 5th grade. Where adding 4 plus 7 is challenge for some people because it’s more than 10 fingers. Long division is a mystery. If you can balance your checkbook and read the bank's service agreement, thank a teacher.

I’m not asking . . . or expecting . . . some future president to restore unlimited overdraft and late fees. But the outgoing administration lives in a fantasy world where people aren’t expected to have basic math skills, or repay their student loans, or save for the future. And nobody will be able to live on social security alone, even if it survives.

I’m just sayin’ . . .

The Biden Administration is ‘cracking down’ on banks by imposing a $5 cap on overdraft fees, says Americans could save billions in ‘excessive junk fees.’ Will Trump kill the policy?