In the aftermath of one of the worst recessions in history, more Americans have limited or no interaction with banks, instead relying on check cashers and payday lenders to manage their finances, according to a new federal report.
Not only are these Americans more vulnerable to high fees and interest rates, but they are also cut off from credit to buy a car or a home or pay for college, the report from the Federal Deposit Insurance Corp. said.
The payday loans are a government-sponsored form of usury, and should be stopped.
That being said, however, many people with decent credit and banking accounts are keeping their credit card purchases to a minimum, and only putting just the amount necessary into their bank accounts to pay the bills.
The fact that the US Court of Appeals has ruled that your deposits are not really your own, and the banks have discretion to do with them what they will, has not instilled a great deal of faith in the banking system either.
When a banking customer deposits their money into their bank account, the Federal Deposit Insurance Corporation(FDIC) and Securities Investor Protection Corporation (SPIC) are in place to protect the customer from fraud or theft. The ruling from the CCA means that these regulatory systems will not insure customer funds, investments, depositors and retirees who hold accounts in banks. In fact, the banking institution is now legally allowed to use those customer funds deposited as collateral, payment on debts for loans made, or free use on the stock market to purchase investments as the bank sees fit.