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The explosion of overdraft fees makes basic banking expensive for people living paycheck to paycheck. Banks and credit unions generate over $34 billion in overdraft fees annually by one estimate. What those with money experience as ‘free checking’ is quite expensive for those without. Prior research has focused on who pays overdraft, finding a small number of people (9%) are heavy overdrafters accounting for 80 percent of the fees. Not as carefully researched is whether this is just a small part of banks’ general business model, or whether for some banks overdraft has become their main source of profit. In fact a few small banks have become overdraft giants relying on overdraft fees as their main source of profit. These banks are really check cashers with a charter. Why do bank regulators tolerate this?

Aaron Klein
Senior Fellow – Economic Studies
AaronDKlein
For six banks, overdraft revenues accounted for more than half their net income. Three had overdraft revenues greater than total net income (meaning they lost money on every other aspect of their business).

From A few small banks have become overdraft giants:

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GDS is advocating for a simple solution that would let citizens prove their identity online, instead of manually scanning proofs of residence or bank statements for verification purposes. But “a simple digital identity solution that works for everyone,” as it is described by Read, is easier said than done.

From The government wants to have another go at digital identity. Can it get it right this time? | ZDNet:

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her fake drivers license did not trigger a red flag

From The children selling explicit videos on OnlyFans – BBC News:

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Two reasons come to mind for why so many unbanked would rather remain so than get a conventional bank account. The first is that financial services providers often described as “non‐​mainstream” — check cashers, pawnbrokers, payday lenders — serve the unbanked better than many of us think. They have convenient locations that are open most of the time, their fees are transparent if high, and the people who work there look like the unbanked: young, minority, immigrant, often Spanish speaking. The second reason is that bank accounts have become commoditized, their offerings indistinguishable from each other, and innovation minimal in comparison with other consumer financial products. Given the available alternatives, bank accounts just do not appeal to a majority of the unbanked.

From Which Type of Digital Currency for Financial Inclusion? | Cato Institute:

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But I am also unhappy with the conventional definition of financial inclusion. It assumes that, were someone to open an account on behalf of each unbanked household, the problem would be solved. Some experts whose commitment to help the unbanked I do not doubt advocate just that: a mandate for the Federal Reserve to create retail deposit accounts — “FedAccounts” — on demand (Ricks, Crawford, and Menand 2021). But I think the merits of this intervention as a financial inclusion policy are questionable, as there is no assurance that the unbanked want such accounts.

From Which Type of Digital Currency for Financial Inclusion? | Cato Institute:

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to appeal to unbanked households, digital wallets must address the reasons why the unbanked are so

From Which Type of Digital Currency for Financial Inclusion? | Cato Institute:

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COWEN: As you know, there are truly anonymous forms of crypto, whether we like it or not. How many degrees of freedom do we really have in regulating non-anonymous crypto given that people have the option of switching into anonymous crypto?
CARNEY: We can only regulate them as it comes into the formal financial system, but we certainly can regulate anybody who is in the formal financial system and how they dock into that system, a crypto exchange. I’ve long been saying that crypto exchanges should be regulated as other exchanges are and should be subject to the same quality standards and Know Your Customer standards and others.

From Mark Carney on Central Banking and Shared Values (Ep. 123 - BONUS) | Conversations with Tyler:

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A new card game called Bitopoly, which is designed to introduce players to the history, technology and culture of Bitcoin, has been launched.

From Bitcoin Card Game Bitopoly Launches – Bitcoin Magazine: Bitcoin News, Articles, Charts, and Guides:

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Yesterday evening two Bitcoin figureheads, Elon Musk and MicroStrategy CEO Michael Saylor, joined forces on the Bitcoin Mining Council, an apparent attempt to address Bictoin’s worrisome environmental footprint. The council has been derided by some as a shadowy cabal that could damage bitcoin’s fungibility or decentralization.

 

But this is clearly wrong, since Bitcoin has never been fungible. That’s one of the reasons why it isn’t money.

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Barclays has bemoaned the fact it has had to fork out a significant amount of money on open banking, the Telegraph reported.

“The spend on implementing the open banking remedy to date has been significantly higher than the amounts foreseen and taken into account by the CMA in its original 2016 assessment,” the bank said. Additionally it said the changes had taken between five to six years to implement, despite the watchdog claiming the costs would be spread over two.

From HSBC and Barclays call for open banking reform over higher costs – CityAM : CityAM:

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