- If my plan were made compulsory among banks--something which I would not insist on but which I don't dismiss out of hand--perhaps this type of plan would lead to stricter requirements for checking accounts and the end of what is known as "free checking." (In order for banks to advertise a checking account as a "free checking" account, such accounts need to meet certain requirements under the law, such as no minimum balance fees or annual fees.) I'm not sure if such would be a consequence, but it could plausibly result.
- In that blog post, I also discussed the possibility of equipping ATM's with the ability to disperse pre-approved money orders. I'm not sure if there is the technology to do so, especially if these money orders are to be linked to a customer's account. The reason: such monetary instruments would probably have to be MICR encoded (MICR refers to "Magnetic Ink Character Recognition," which is a way to make account numbers easily routable by machines), and while (I presume) ATM's could be equipped with their own MICR encoders, such machines would present a huge potential liability, even more than the amount of cash that might be stolen. As it stands, ATM's have a certain amount of cash, and it's possible (I don't know how easy it is, but it is possible) for a thief to steal the money. Stealing a MICR encoder might be one more item you wouldn't want a would-be thief to have.
Sunday, May 30, 2010
Two possible objections to my banking reform plan
In a prior blog post (click here to see it), I advocated certain reforms or new ways of running accounts for banks that, in my opinion, would help resolve the problems people face with overdraft fees. I can imagine two more possible objections: