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Enfranchising Poverty
The Great Walmart Satan Strikes Again

Walmart has just announced it is moving forward this October with its latest evil plan to immiserate the American people: giving lower-income Americans cut out of the banking system access to a cheap checking account. The NYT:

Walmart, the nation’s largest retailer, is teaming up with Green Dot, known for its prepaid payment cards, to supply checking accounts to almost anyone over 18 who passes an ID check.

Daniel Eckert, senior vice president at Walmart, said on Tuesday that the accounts would be available nationwide by the end of October. The accounts are intended to be low-cost alternatives to traditional bank checking accounts, with no fees for overdrafts or bounced checks and no minimum account balance.

In comparison, a basic checking account at Citibank charges $12 if a check is returned and $34 for overdrafts.

The new accounts from Green Dot, called GoBank, will cost $8.95 a month if they have direct deposits totaling less than $500 a month. Mr. Eckert said that most people on Social Security or fixed pensions would qualify.

As many as 10 million American households don’t have access to traditional checking accounts because of bad credit, and many avail themselves outfits that offer short-term, unsecured loans for smaller sums but charge very high interest rates on them. Recourse to these kinds of options can trap people already locked out of banking into an ugly downward spiral.

To some, Walmart is the very image of the evils of corporate America—and yet here, once again, the company is showing itself a force for good by offering a service that no one else has deigned to, and at an approachable price no less. Of course, this isn’t charity: Walmart is looking to win customer loyalty as it faces stiff competition from other low-price retailers in the space. Nevertheless, the move will expand access to banking for millions of Americans previously cut out of the system, and could help many of them avoid further impoverishment. That’s a good thing, any way you slice it.

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  • Fat_Man

    The same people who are inclined to oppose Wal-Mart, are also given to complaining about the concentration of assets in the nation’s biggest banks and about “too big to fail”.

    They need to understand that the quickest and least expensive way to disperse banking assets is by letting new players like Wal-Mart into the system. If Wal-Mart were to succeed in taking banking business from the big banks, it would encourage other big retail chains, like Target, Kroger, and Costco to come in. We might then see a less concentrated banking system.

    • FriendlyGoat

      Yes, and the United States Post Office should also get in the act by offering the payday-type loans at a small fraction of the prices now charged by the predatory sector—-while still making enough to fix the postal system.

  • Bruce

    Is this not a better account for those who aren’t in the low income category as well? Getting away from the $34 overdraft fees is good, regardless of your income. As Fat_Man stated, this could be a good step towards an expansion of the banking system. The option to extricate oneself from Citibank, Bank of America etc. looks very good. You have to wonder if regulatory roadblocks will be created. The Banksters don’t like competition.

  • Andrew Allison

    Many banks over free checking with a direct deposit of any amount. What is usurious, and would be a beneficial target for regulation, is the outrageous fees charged for “services” which in this day and age cost next-to-nothing. Given that a returned check means that there was no overdraft, it’s kind of hard to justify both a returned check and an overdraft fee.

  • canalway

    I’ll support any enterprise that keeps labor union and big government parasites out of mix. Walmart fits that bill. Big Government and the supporters in the labor union will stirrup your feet, stone hedge your head and stucco your mother to the wall.

    Low income people need more independence that the Walmart banking offers and less dependence the government uses to trap you and ensnare you into a life of dependence so they can amass power for themselves off the backs of the poor and middle class. So who’s the big satan. Why are enterprises like Walmart accuse of greed and never the government and their democrat union supporters.

  • Janice Woods

    Oh crap. This means another round of empty banking branch buildings littering retail centers.

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