Can the U.S. Go ‘Cashless?’

Summary

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Podcast Summary: Optimist Economy

Episode: Can the U.S. Go ‘Cashless?’
Hosts: Kathryn Anne Edwards (A), Robin Rauzi (B)
Date: May 12, 2026

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Episode Overview

The hosts dive deep into the realities and consequences of a potential U.S. cashless society. Bringing humor and personal anecdotes to the discussion, Edwards and Rauzi examine who still uses cash, the uneven effects of going “cashless,” why people are unbanked or underbanked, and the interplay of race, class, privacy, and policy in American banking. The conversation moves from quirky listener stories to pointed critiques of banks, alternative financial services, and ultimately, proposals for making the economy more just.

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Key Discussion Points & Insights

1. Cash Usage Trends in the U.S.

• Pandemic Impact and Rebound

  • Although cash usage dropped during the pandemic, it has since stabilized. About 80% of people still carry cash, and cash hoarding has increased post-pandemic.
  • “While cash usage had dropped during the pandemic...it in fact stabilized, and that about 80% of people still carry cash. And then, in fact, cash hoarding...has gone up since the pandemic.” —Robin Rauzi [06:32]

• Generational Attitudes & Cashless Expectations

  • 70% of people under 50 believe the U.S. will go cashless in their lifetime (Gallup 2022).
  • There’s a disconnect between public perception and actual usage.

2. The Appeal—and Problems—of Going Cashless

• Convenience and Business Preferences
  • Cashless feels efficient and clean, less risk for businesses, and easier for tech-savvy consumers.
  • “It seems like such a...win, win, win, win, win. Like what could possibly be wrong about not having cash when it is so convenient...” —Edwards [07:32]
• For Whom Cashless Doesn’t Work
  • Going cashless isn’t a universal good: It disproportionately harms those who can’t access traditional financial services.

3. Who Are the Unbanked and Underbanked?

• Definitions & Prevalence

  • Unbanked: No bank account, often dependent on alternative financial services like check cashers, pawn shops, payday lenders.
  • Underbanked: Have a bank account, but still rely on alternative services.
  • 6% of adults are unbanked; 14.2% of households are underbanked. Rates are significantly higher among lower-income households.
  • “If your family income is under $25,000...rate of being unbanked...is 22%.” —Robin Rauzi [14:45]

• Barriers & Banking “Blacklists”

  • Many are unbanked due to being “frozen out” after overdrafts, outstanding fees, or blacklisting (explained via ChexSystems).
  • “These are people who have, you know, had too many overdrafts, unstable credits, didn’t pay off accounts...and they're kicked out of the banking system...” —Kathryn Anne Edwards [13:52]

4. Race, Discrimination, and Financial Services

• Evidence of Racial Discrimination

  • Banks offer worse access, smaller loans, or outright refusal to Black and Latino customers, even at similar or higher income levels.
  • Case study: During PPP loans in the pandemic, Black small business owners were systematically given worse (sometimes damaging) advice by banks than white counterparts, as shown by paired testing.
  • “If you were a small business owner with a Black voice, in 2020, banks were more likely to offer you less loans, smaller loans, tell you to do things like take out a home equity line of credit instead of getting a business loan.” —Edwards [18:21]

• Layered Harm: Bad Products & Bad Treatment

  • “There is bad treatment of people within good products...you push them towards bad products. Those bad products can be exploitative.” —Edwards [19:46]

5. Privacy and Consumer Choice

• Cash as Protection

  • Cash offers privacy—many consumers distrust banks (and the government) monitoring their purchases.
  • “There are people who legitimately don’t want their every purchase tracked by financial institutions and credit institutions.” —Rauzi [11:25]

• Right to Choose Payment Methods

  • Hosts highlight efforts to preserve cash options: nine states plus DC have bans on cashless-only retail; Congress is considering the Payment Choice Act of 2025.

6. Systemic Issues: Junk Fees, Order of Transactions, and Bank Practices

• Overdraft Fees and Transaction Manipulation

  • Personal stories illustrate how banks maximize profits from poor or young customers by reordering transactions, causing cascading overdraft fees.
  • “They reordered transactions so as to...force me to go into overdraft.” —Edwards [24:29]
  • Notable anecdote: $1.95 Dr. Pepper led to a $1000+ debt due to post-account-closure transaction and compounding fees. [27:12]

• Distrust in Banks

  • Focus group research (Cleveland Fed) found deep-seated distrust—some people view banks as unsafe, intrusive, and exploitative.

7. Potential Solutions & Policy Ideas

• Public Banking/Postal Banking

  • The U.S. had a federal postal banking system for 50 years—many countries (France, Germany, Japan) still do.
  • “We can offer financial services publicly and we actually did for like 50 years through the postal system.” —Edwards [33:21]
  • Postal banking offers safe, low-fee deposit services to people rejected or ill-served by for-profit banks.

• Role of Government

  • Hosts propose that while private (for-profit) banks can choose their customers, public institutions should guarantee access to basic financial services for all.
  • “Not everyone is served by a private sector, private provided for profit...so you need to come up with an alternative. The alternative is a public provision.” —Edwards [36:49]

• Cash as an Essential Option

  • Even in a tech-centric economy, cashless policy should not be implemented without robust, truly universal, and fair alternatives.

8. Memorable Quotes & Moments

• “Banks are racist. They're regulated to not be racist, but they 100% are.” —Edwards [15:04]
• “Money found money is free money, even if it was your money the whole time.” —Edwards [07:46]
• “I don't fly because I love airlines. I don't put my money in a bank account because I love banks.” —Edwards [36:47]
• “Cash is the ultimate $20 bill you find when you take your pants out of the dryer.” —Edwards [37:14]

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Key Timestamps

• 06:32 – Cash usage stats, pandemic impact, and myths about “cashless” society
• 10:35 – Bans on cashless-only retail, Payment Choice Act explained
• 13:12 – Who is unbanked & underbanked, survey numbers, causes
• 15:04 – Racial discrimination in banking, paired testing, PPP example
• 24:29–27:36 – Overdraft manipulation, personal horror stories, deep-seated mistrust of banks
• 33:21–36:49 – Postal banking history, international examples, policy recommendations
• 37:14–38:09 – Cash as system check and symbol of independence from banks

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Notable Quotes (with Attribution & Timestamps)

• [07:46] Kathryn Anne Edwards:
  “Money found money is free money, even if it was your money the whole time.”

• [15:04] Kathryn Anne Edwards:
  “Banks are racist. They're regulated to not be racist, but they 100% are.”

• [18:21] Kathryn Anne Edwards:
  “If you were a small business owner with a Black voice, in 2020, banks were more likely to offer you less loans, smaller loans, tell you to do things like take out a home equity line of credit instead of getting a business loan.”

• [24:29] Kathryn Anne Edwards:
  “They reordered transactions so as to...force me to go into overdraft.”

• [36:47] Kathryn Anne Edwards:
  “I don't fly because I love airlines. I don't put my money in a bank account because I love banks.”

• [37:14] Kathryn Anne Edwards:
  “Cash is the ultimate $20 bill you find when you take your pants out of the dryer.”

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Tone & Style Highlights

• Conversational, witty, and candid.
• Hosts blend research with lived experience for an accessible yet data-driven tone.
• Frequent asides and humor (“Rich people gonna rich.” [34:37]) lighten weighty topics.

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Conclusion & Takeaways

Transitioning to a cashless society in the U.S. is not just a matter of tech adoption or convenience—it risks further entrenching inequality and discrimination unless basic banking access is universal and just. Cash remains vital for millions, as both a tool for agency and a check on institutional overreach. Solutions like postal banking offer a way forward—but any such positive changes require political will and a public commitment to equity.

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Executive Orders & Spiritual Sponsors (Select Highlights)

• Executive Orders segment:

  • Kathryn: Regulate youth sports’ overwhelming schedules for health, safety, and access.
  • Robin: Make airline luggage fees based on weight, not number of bags.

• Spiritual Sponsors segment:

  • Kathryn: Watching the Artemis crew splashdown, sharing excitement and awe of human achievement with her kids.
  • Robin: Appreciating friends with Dodger season tickets—experiencing simple joys beyond economic woes.

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In closing: Cash may not be king for everyone, but it’s still justice for many. The path to a fairer economy, the hosts insist, begins not with taking options away but ensuring everyone has a safe and trustworthy financial foundation.

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Transcript

[A]

Hi, I'm Frances Frey.

[B]

And I'm Ann Morris, and we are

[A]

the hosts of a new TED podcast called Fixable.

[B]

We've helped leaders at some of the world's most competitive companies solve all kinds of problems.

[A]

On our show, we'll pull back the curtain and give you the type of honest, unfiltered advice we usually reserve for top executives.

[B]

Maybe you have a co worker with boundary issues, or you want to know how to inspire and motivate your team. No problem is too big or too small.

[A]

Give us a call and we'll help you solve the problems you're stuck on.

[B]

Find Fixable wherever you listen to the podcast.

[A]

I haven't slept all the way through the night in almost a year, and it's, like, really starting to show.

[B]

It's adding up.

[A]

It's adding. It's adding up. Hello and welcome to Optimist Economy. I'm economist Katherine Ann Edwards.

[B]

I'm editor Robyn Rousey.

[A]

On this show, we believe the US Economy can be better, and we talk about how to get there one problem and solution at a time.

[B]

Today on Optimist Economy, we're going to talk about who uses cash anymore and why. And what does that actually tell us?

[A]

I'm wondering how long I can wait until I say cash is king or something like that. Cash is king, baby.

[B]

Just get it out. Just get it out.

[A]

Yeah. Okay, it's gone. Announcements.

[B]

First of all, I saw this review on Apple Podcasts that says I've become a better dinner party, cocktail party guest since listening to this podcast, which I think is a great endorsement. Also, maybe you go to different parties than I do. I don't know.

[A]

Or maybe nobody else thinks that but her. Right? Like, she's a great guest. Maybe else is like, oh, God, this is taking a turn. That damn show again.

[B]

Exactly. So thank you for that review. And also, in a comment on Spotify, somebody shared a YouTube video where a tattoo artist was shown pictures of people's tattoos. She was supposed to try to match the person to the tattoo without knowing who had what. And one of the people had a tattoo of the Herfindahl Hirschman index equation on her foot. And it turned out that she was the granddaughter of either Herfindahl or Hirschman. She didn't say which, though. The YouTube commenters put their money on Hirschman. Anyway, that's a deep cut.

[A]

Talk about the corners of the Internet coming together.

[B]

Exactly, exactly.

[A]

See, optimists, it's a small world after all.

[B]

But there were multiple people commenting. Like, who would get the hhi tattooed on their foot.

[A]

I mean, we've talked about getting Pilcrow tattoos.

[B]

Exactly. I was like, this is. Clearly, we've never.

[A]

Clearly we've never clarified they would be matching pilgrim tattoos. Right. Okay.

[B]

Okay. Redcon. We got an email from Catherine in Delaware, who noticed that I could not say the word for the 250th anniversary of the Declaration of Independence. Apparently I said semi quintennial, but it's actually semi quincentennial, which is why I'm still gonna just call it the 250th anniversary.

[A]

Semi quincentennial.

[B]

Semi quincentennial.

[A]

It's such a bummer it's happening right now, right?

[B]

I know.

[A]

I mean, the Fourth of July is my favorite holiday. Like, bar none, it is. And it's not even that it's my favorite. I think it is the best holiday.

[B]

Really? More than Thanksgiving? Thanksgiving is my favorite holiday.

[A]

Thanksgiving's your favorite holiday?

[B]

There's a lot of food.

[A]

Oh, okay. Well, there's a lot of food in my July 4th parties. A lot of food.

[B]

Keep that in mind.

[A]

Yeah. No, it's truly like. Like slaughter the fatted calf. Our country is a year older. It's like birthday party, but no present. It's summertime. You get to burn stuff because of fireworks. It's awesome.

[B]

Okay, terms and conditions. Katherine, did you look up anything this week?

[A]

No.

[B]

You're not really holding down the first half of this show. You know, it's funny.

[A]

We were off recording last week, and now I'm just like, I don't know. When we got a group. I'm like, who am I? Who are you? What is economy?

[B]

What Optimist? I just. I looked at this thing that I read about called checks systems. So Chex Systems is like a credit bureau, credit reporting specifically for bank accounts. And so it's a central database to verify all sorts of personal information related to your banking history. And I think this is where you can also get sort of blacklisted from opening a bank account. And I didn't realize that that was separate from Equifax and TRW and the other credit reporting agencies. Yes.

[A]

I mean, I think one term and condition for the show this week would be unbanked people who don't have a bank account. But practically speaking, it means that it's high use of alternative financial services and alternative financial products. So. Alternative financial products. Alternative financial. You know, you don't deposit cash in a bank. You don't withdraw from a bank. You go to a check casher. You go to a pawn broker, you go to a payday lender. These are not banks, but they perform financial services. And the only people who go to them are people who are somehow frosted out of the banking system and unbanked and use of really not great financial products tend to be synonymous, even though technically they're two different things.

[B]

Did you say frosted out of the banking system?

[A]

Frosted out.

[B]

Frosted out.

[A]

Yeah. It's a technical term. You got iced out by the banking system. Frosted out. I don't know the words I say sometimes. Believe it or not, I think frozen out is frozen out. That makes more sense.

[B]

We'll be back in just a second for the big Pilcrow discussion on cash and the unbanked. Are we ready to pilcrow?

[A]

Ready to pilcrow is such a good motto.

[B]

Noun to verb, noun to verb.

[A]

I am ready to pilcrow.

[B]

Okay, So I was interested in this topic about our future cashless society because a listener of the show wrote in to ask what the ramifications of a cashless society would be. So I looked up where we are in cash usage, and I was sort of shocked, frankly, to find out that while cash usage had dropped during the pandemic, which is what everybody sort of thinks of, but then it in fact, stabilized, and that about 80% of people still carry cash. And then, in fact, cash hoarding, like people keeping a lot of cash around the house, has gone up since the pandemic. Maybe it's just people feel like they need more cash around the house. But still, you know, polls show that people really do think that we're headed toward a cashless society. Gallup did a poll on this in 2016, and again in 2022, 70% of people under 50 think it's likely that we will be a cashless society in their lifetime. But this would be. This would be a problem. It'd be a problem for a lot of people.

[A]

Oh, yeah. Because outwardly it sounds great. It sounds great, right? Like, cash is filthy. We have to pay money to print it.

[B]

I drop cash a lot. It's always, I pull the phone out of my pocket. Whatever cash was in there goes flying.

[A]

Yeah. Well, now there's truly no feeling like putting on a clean pair of pants and realizing you left money folded in your pocket and it's been through the washer, the dryer, and it's now crisp and dry, and you find it, and it's like money found money is free money, even if it was your money the whole time. Right. Like That's a joy that I think I'd love other people to experience. Even if it's like a dollar, it's just like, ah, money. But it's also like, it's easier to pay. You don't, you know, you don't have to count out your cash, rifle through your cash, carry cash. It feels safer. Businesses say that it's safer for them. I mean, it seems like such a, like, win, win, win, win, win. Like what. What could possibly be wrong about not having cash when it is so convenient in so many ways and makes transactions simpler? I.

[B]

Do you use a lot of cash? I'm just curious. I more or less did stop carrying cash during the pandemic.

[A]

You know, my cash usage has gone up because I moved back to Houston and my mom lives 10 minutes away and she uses cash. So I'll end up with these arrangements of like, I'll order pizza. And she's like, oh, well, let me give you money for the pizza. And then she gives me cash and I'm like, what am I going to do?

[B]

So you're like, you're a teenager just getting like allowance money from your mom still?

[A]

Okay. No, she's paying me back at a cut rate.

[B]

That's hilarious. I actually only get cash out of an ATM at the airport. I think it's like when I travel I feel like I should have cash and then I often come back with all of it still in a. Still in my bag. But I have also converted almost entirely to Apple Wallet payments and apparently I'm part of the problem. I just. No cash, no problem.

[A]

But I mean, I find this to be really an interesting question. When you said you want to talk about cash, I was like, oh, let's talk about cash. Because we're not going to talk about cash, actually, we're going to talk about banks, banking, financial products and financial services. Because I don't think there is any harm in the world if you decide I'm never going to use cash again. I think the problem is people for whom that doesn't work and why it doesn't work. And this is one of these really interesting cases in which you embracing something has no bearing on whether or not it's a good policy. Overall. Not having cash would hurt a lot of people in the economy, not you. But that's like your worlds can coexist on some level where you never have to use cash again. And that doesn't mean that they have to stop using it. It's a very. I think it's kind of like that you could coexist. Which is why a lot of states have had bans on cashless.

[B]

What is it? Nine? I looked it up. Nine states and the District of Columbia have statewide cashless business bans.

[A]

Yeah. Where businesses are not allowed to go cashless.

[B]

I was just at Dodger Stadium Friday, Cashless. They sent us an email in advance of the game saying we do not accept cash. I was like baseball, baseball doesn't accept cash. And actually, you know, who knows if anything's ever going to move forward in Congress ever again. But the Payment Choice act of 2025, which has 21 bipartisan co sponsors, you know, would insist that businesses that have a retail, like a brick and mortar retail location take cash for purchases up to $500. And there are some weird exceptions. Like you can have a machine that lets them put cash on a card that they can pay with or like

[A]

an, like an rt?

[B]

Exactly. Like it's like a one time gift card machine. Like I don't understand how, how it's supposed to work. But it's interesting because I think you see both sides of this. One side is the concern for people who are unbanked. But then also I think there's a real concern around privacy. That there are people who legitimately don't want their every purchase tracked by financial institutions and credit institutions.

[A]

Or the government.

[B]

Or the government.

[A]

So I think one aspect of it I think is just purely like it is a. Do you have the right in our economy to choose how you pay for things? And what is the mechanism for turning, turning one of those options off? And it's not so much an endorsement that cash is better, but that choice and agency amongst consumers is better. And this lends itself to a lot of bipartisan support.

[B]

Sure.

[A]

Of like do not let the banking lobby convince you that we shouldn't be allowed to use cash anymore.

[B]

Yeah.

[A]

That makes me feel like it has such a long tail. Because man, if you don't like banks and you don't like the government, should you be forced to go through a financial institution to be a participant in our economy?

[B]

Yeah, I mean, no, no.

[A]

I mean, yeah, exactly.

[B]

Like I'm agreeing, but I'm like, I

[A]

never want to use cash again. But do not, do not tell someone that they have to go through a bank. It's a fundamental question of how we allow people participate in the economy. And then that fundamental question is met with a lot of evidence is that the people who would then gatekeep participation in our economy, they're not good. Their track record would Be not good. Not good. I mean, I want to say mixed, but I'm not gonna, because it ain't. It is a bad track record. Financial services that go to especially low income people are bad.

[B]

You're saying big banks, not necessarily the alternative financial services that you were talking about earlier.

[A]

Well, it's cascading issues. You need to be able to convert your currency into some type of payment system. How do you do that? Well, you know, most of us go to a bank, but what if the bank says we won't take you? According to the survey of household economics and decision making, which is put out by the Federal Reserve, 6% of adults are unbanked.

[B]

And that number's been pretty steady.

[A]

It's been steady, according to them since probably over the last 10 years. It's been relatively steady. And it's a pretty high correlation of being on the blacklist from banking institutions that these are people who have, you know, had too many overdrafts, unstable credits, didn't pay off accounts that had balances owed because of things like overdraft, and they're kicked out of the banking system for a period of time.

[B]

Right.

[A]

The cousin of unbanked is called underbanked.

[B]

Right.

[A]

A separate survey is put out by the fdic, which is a survey of the unbanked and the underbanked. And they measure in terms of households. And it's 4.2% of households, which makes sense. Underbanked is 14.2%. So underbanked, meaning you have a bank account but use alternative financial products and services, is roughly three times the unbanked.

[B]

Wow. And it's, I mean, it's not surprising, but your family income is under $25,000. A. The rate of being unbanked, completely unbanked, is 22%. And if your household makes under, basically under $50,000 a year, the unbanked rate is actually still at 8%.

[A]

That's problem one. They don't hit everybody. Problem two is that I just say. How do I say this? How does one. So they're racist. Banks are racist. They're regulated to not be racist, but they 100% are. And they. I don't think it's.

[B]

But how do we know that they're racist? I mean, especially in this day and age where, I mean, you can open a bank account and never talk to a human, never step foot in a bank.

[A]

One way that we see it is the difference in outcomes in terms of what kind of credit you're offered. Your credit approval rate, your credit denial rate, your Total access to credit of black and white people who have very similar incomes. The Federal Reserve has a survey, the shed, the survey of household economics and decision making. And the SHED measures things like have you ever applied for a credit increase and were denied? And if you look within income bands, you know you're still looking at black households that are pulling down north of $100,000 and their rejection rates or their denial rate will be much higher than white households. Even so these are like high income people being rejected from credit applications or say like making an your total credit availability larger. And it's disparate between race even amongst high income households. So amongst low income households it's going to be worse. But one of the true story that's

[B]

also true with, with Latino households, right?

[A]

Yes. Although the biggest knock in the financial sector is being a black person. So here's a case study that's illustrative. It's 2020 and Congress has passed the paycheck protection program which is intended to open up credit, basically a spigot, the fire hydrant that's pouring water into the. They are trying to open up credit to small businesses to keep them from going under as the economy comes to a screeching halt. And the paycheck protection program works through existing lending institutions. You do not go to the government for money. You go to a bank and the bank opens up a small loan for you, backed through the paycheck protection program. It went to big banks, it went to small banks and so on. So a research and advocacy group called the National Community Reinvestment Coalition, they did a paired test of the PPP loan. So paired means you have two people, one black, one white, one in a protected class, one not in a protected class, one gay, one straight. It was developed by hud. It was called the slam door test where you would send people out into neighborhoods to respond to like 4 lease signs and see what was the slam door rate of the white person being given access to the apartment versus the black person having the door slammed in their face. This model of slam door test has basically just become much more sophisticated over time. But the, the fundamental question that they're testing is the same. When two people come to you looking for a service, do you treat them differently based on their race or their skin color or their sexual preference or their gender or pregnancy status or what have you? And we conduct these types of tests all the time. So the National Community Reinvestment Coalition had a set of people at the start of the pandemic call banks and they

[B]

were Supposed to be small business owners.

[A]

Yeah, they're given a script of, you know, here's the size of your business, here is how much money you need, here's how many people you have on staff. They're basically given a script to follow to say, tell this to the bank. And they had them, they had half men, half women, half black, half whites. And as they point out in the report, most Americans are able to identify based on someone's voice, whether they're black or white. So you have black sounding people calling a bank and then you have white sounding people calling a bank. And it is, this is just, you pick up the phone and ask a bank. The government is basically giving you money to give to me, what should I ask for? And they were given like wildly different advice. And now remember these, they're given the prompt of the exact same business with the exact same numbers and statistics. And then a black man calls and they give him worse advice, even though they're not. The money's not even coming from them. The National Community Reinvestment Coalition has done this type of testing leading up to the pandemic. So they were like ready to go. Like, they spun this research up really quickly and then they sent it out the door. And yeah, I mean, if you were a small business owner with a Black voice, in 2020, banks were more likely to offer you less loans, smaller loans, tell you to do things like take out a home equity line of credit instead of getting a business loan. I mean, they just got worse advice.

[B]

Oh my God. Yeah, criminal advice. Actually, it seems like criminally bad advice in some cases.

[A]

Criminally bad advice in some cases. This is a problem that has existed up and down the financial institutions. So there's some, some of the badness of financial services comes from bad products. Like, we don't need to explain to listeners why payday loans are predatory. Like there are bad products, but then there is bad treatment of people within good products. And so this is like a compounding problem. You don't serve everyone, you push them towards bad products. You push them towards bad products. Those bad products can be exploitative. And then you have, even within good products, you still have disparate outcomes for people based on non financial features like their skin, their race, their accents. Yeah, yeah, their accents. You know, we want to move into a cashless society. Like, who does that give power to?

[B]

Wells Fargo? Yeah, bank of America.

[A]

Yeah.

[B]

I mean, I think in, in defense of big banks, words I never thought I'd say aloud, you know, should they be forced to do business with customers who don't have, you know, regular money to keep in an account or have a history of bouncing checks or. I mean, I think that if any of us owned a bank, we might be like, well, I don't think that I trust this person because they have a bad history of using credit.

[A]

No, I actually, I don't think banks should have to serve everybody. Not a for profit private bank because they've proven themselves to be pretty. What is the word I'm looking for? Mean? Might be. Might be the right word. Opportunistic. Why do you need to be charged a $35 fee for going 50 cents into the red in your bank account?

[B]

Right, right.

[A]

I mean, it's not necessarily that we should require them to serve those people because they've kind of shown that they will make money off of people's decision making, good and bad. And I had a friend who worked for a bank regulator during the Biden administration's like, let's get rid of junk fees. And the banks really took issue for their fees being called junk because they were like, look, we're not charging you $15 to buy an online ticket. Like, they owe us money. We should be allowed to charge them for that. It's not a junk fee because it's actually associated with a particular action that has a cost. Now, does it cost $35? No.

[B]

Yeah. Yeah.

[A]

I don't know. But that's, I mean, that's how you

[B]

charge them over and over and over and over to.

[A]

Should I tell my banking story? I have, there have like banks that I like. I will walk by and like, you

[B]

won't even withdraw money from their atm.

[A]

I won't. Oh my God. Like, I would like, I like one day if they go bus, like, I will piss on their grave. Like, I hate. There are certain banks that I hate so much. I mean, it's what's wild, right? So when I was in. I was spending a summer in D.C. at a paid internship and I deposited my paycheck on the Friday or Thursday or Friday of a holiday weekend. It was July 4th, obviously, the best day of the year, best weekend of the year. And I'm. This is my first July 4th in D.C. like, we're going to see fireworks. There's all kinds of fun stuff going on. It's like America, the weekend I deposit my paycheck and then the weekend starts and I think, you know, the paycheck's like, I mean, it's not a lot. It's not nothing. I'm proud of myself. But I think I deposit something like 500 bucks. And when I check my balance at the start of the next week when the holiday is over, I owe the bank $700, $600. Some, some wild. I mean, like, I was like, wait, is that negative? That's not. No, wait, how did. Because at first I was like, wait, I only put in like 500. I should have like 700. Like how did that swing? And what had happened was, is that they reordered transactions. So I made a deposit, right? And so in my timeline, the human timeline that a person goes through, I deposit the money into the bank, got my little receipts, and then over the next three days purchased things. We went to museums, like we like whatever. I bought small stuff. $2 here, $3 here, $10 here, a movie ticket, whatever. When they actually processed all the transactions, they reordered it so that all of the transactions I had made before the weekend came first and each incurred a $35 overdraft. And then the paycheck was the last thing that was deposited.

[B]

Oh my God.

[A]

So even though I deposited the paycheck, spent a lot of money over three days, and then came back on a Tuesday, they reordered the transactions so as to fill. Forced me to go into overdraft.

[B]

It's not like you went into overdraft and they charged you $35 once. They charged you for $35 for the movie tickets, $35 for the beer and fries, $35 for the parking.

[A]

I mean hundreds of dollars. Cuz, I mean this is over a holiday weekend. I mean I easily made 20 different transactions over a three day holiday weekend. So I, oh my God. I went back to the bank and I was like, what on earth did y' all lose the little piece of paper that said I have money. Like what is happening? And they're like, no, that's not us. Our branch can't do anything. And so I had to call the like 1, 800 number. This was like a day off of work, probably an hour for the phone call and seven hours just to pace furiously. Anger. And they were, they were like, you know what? We're going to give you our special one time exception and clear all of these and reorder the transactions. And I was like, reorder. I was so mad. They got off the phone and I went down to the bank and I was like, give me every dollar in that account. I was unbanked for the rest of the summer and I operated entirely off of cash because I was so like, I hate banks. I hate the way they treat people. That's not my only horrible bank story. That was in 2005. I had a similar problem. I moved abroad after I graduated college. So I closed all the bank accounts that I like. My primary checking account before I moved and I moved to Russia and then I moved to Prague. Well, like, I don't know, it was like nine months later, my dad calls me and he says, you have a third party collection for like over $1,000. Turns out that the account that I had closed, like two days later, a charge hit, you know, because they reorder and pause transactions. A charge came in after I closed it, and then I left the country. And then they charged me the overdraft, Then they charged me interest on the overdraft, and then they compounded interest on the overdraft. And then months go by. Months go by.

[B]

Because why would you know? You closed and moved out of the country?

[A]

No, because I'm gone. I'm out of the country. I closed the account. I told my dad, like, oh, yeah, throw that away. I don't bank there anymore. They're just trying to, like, sell me something. My parents have to go to the bank on my behalf to settle the debt. And my dad has been banking at this place for decades. And it's a small, like, local bank. And he was like, what the is wrong with you? What's wrong with you? And they were like, well, we're willing to settle for the initial overdraft. You just have to pay that and we'll waive everything else and take the debt out of collection. Guess how much the ever draft was? Oh, no.

[B]

$35. How much?

[A]

It was $1.95.

[B]

What?

[A]

Yeah. And it was me buying a Dr. Pepper.

[B]

It hadn't cleared when you closed your door.

[A]

It hadn't cleared. My Dr. Pepper hadn't cleared. And it was like $1,000 Dr. Pepper. Oh, my God, I'm still mad, Honestly, all these years later. It's been 20 years. I'm like red and mad and, ugh, I've been there.

[B]

I mean, I think I told you about the time that I was trying to get a deposit on my apartment and I had my first paycheck and I deposited and they said, oh, well, this is a new account. We're going to hold onto this for 10 business days. And I think I found this out because something had already bounced. And I went into the bank and they said, you know, this is a new account. We can't. We don't just trust you. And I was like, this was a paycheck. If I walked up to this window and asked you to cash it, you would give me dollar bills. And if I walked around the room and got back in the line and handed you a big pile of dollar bills, you would put those into my account and you wouldn't hold it for 10 days. Right. And they were like, well, yeah. And I said, yeah, you can close that account right now and just give me all the cash in dollar bills. Thank you very much. And I never went back to that bank. Yeah,

[A]

I think everybody has these types of experiences. It was like maybe I didn't understand the game like that we were playing. Like I thought I was just giving you money and you were holding onto it and then I was going out and spending society. But actually I'm like some kind of mark. And you figured out a way to make money off of me by holding my money. It's not just interest rates. Like banking should be boring. You hold at 1%, you lend at another percent. But like the fee apparatus, the restructuring of transaction apparatus, they make money off of you.

[B]

Did you read that report from the Cleveland Fed where they did the focus group of people who are, half of them had banks and half of them were unbanked or underbanked, as you say. The hatred that some people had for banks, they didn't trust them, they didn't trust their privacy. They were poorly treated by them. For a lot of people, banks represent safety and security. And for people who have been mistreated by banks, it is 180 degrees the opposite. And that's where also where I really read about the privacy concerns that people have about banks that they just don't, they don't want the banks and the government up in their, in their business about what they're spending their money on.

[A]

Oh yeah. If a bank has an AI chatbot, do you think it's really good at like keeping people's private transactions to itself? I doubt it. Yeah, I doubt it. I mean, I have a friend who thinks that the overdraft fees were such an effective long game of basically moving all of us consumers onto credit cards. I mean, there's lots of things, right, like we have more credit card options, but it's the, you know, why would you incur debt for literally every transaction you have unless you were worried, unless it was easier to manage. So you've kind of almost like locked people into preferring to use credit cards, which are more lucrative to you because you could charge them like $100, $200 for each account.

[B]

Yeah, And I mean, and of course they make more money on credit card transactions because they charge the business anywhere from 3 to 4% just to process that transaction.

[A]

I mean, I imagine a lot of listeners would be in a position like myself where like I don't like banks, but this is the world we live in and I'm rich enough to keep myself mostly protected from the type of practices that can leave you a lot, you know, stung by the banking industry.

[B]

I mean, the other thing that I find galling is to be charged to have a bank account. And I, maybe I shouldn't find that galling. I just, but I do. And the average fees for banks that charge for checking accounts, the monthly fees are now on average over $12 a month to have a bank account, which just seems like a lot. And then there, of course there are banks that have no fees or have no fees with minimum deposits, but a lot of those are online only banks, which, you know, the people who need zero fee banks are not probably the ones who are also doing only online banking.

[A]

Right. So those fees aren't nothing, but they can be prohibitive to someone who's trying to open an account or at least, you know, a turn off. Like I, I, I'm supposed to open up a bank account so I could put my hundred dollars somewhere safe. But they're going to charge me $12 to hold my hundred dollars.

[B]

Right.

[A]

You know, $144 a year isn't much if you're putting $100,000 into an account. But if you're putting, you know, $500 into an account, that is a very high fee. Oh, I have a term and condition.

[B]

Okay.

[A]

After the fact.

[B]

Ex post facto. Term and condition.

[A]

Ex post facto. Term and condition is usury.

[B]

Oh huh.

[A]

Usury is the charging of like incredibly high interest rates. And the reason why we don't get charged incredibly high interest rates is most state governments have usury reg. And this is what has been used to try and eradicate payday lenders is to say that it's a user recharge and their effective interest rate. So our question here about will we go cashless? The problem with it is that you are very much at the mercy of financial institutions and even those institutions that are good still have a lot of bad things that they do. And it's one of these like, well, I would feel differently about the world in which financial institutions have a lot of power if the consumer financial protection shamiro also had a lot of power. I think the optimist solution here is because there Is so much skepticism on both sides of the aisle about the power given to financial institutions and a cashless society. That means that there is an opportunity for good policy and the opportunity for good policy. You asked me, should private enterprises have to have a bank account for everyone? And I think the answer is no, but your government should. We can offer financial services publicly and we actually did for like 50 years through the postal system. The US Postal Savings System was a banking system set up through the post office, where you could use the post office to make small deposits. It was set up after the panic of 1907 or in response to the panic of 1907. The original strength of postal banking was that the FDIC didn't exist yet. And if you put money into a postal bank account, it was backed by the federal government, whereas other banks were not. So this was a way to have small savers protected. After the Great Depression, when FDIC starts to insure deposits even at private banking institutions, in kind of exchange for heavily regulating them, the nature of postal banking changes and who actually uses it. And it becomes like a small dollar depository. So after that it, you know, it gets a little murky. There's some evidence that it was used as like wealthy people figured out that they could get a low interest rate from it. And so they were using it kind of like for their own purposes of like, okay, wealthy people gonna wealth gonna like figure out how to make money off.

[B]

Rich people gonna rich.

[A]

Rich people gonna rich.

[B]

So they were giving out loans?

[A]

No, I don't think so. They were really just short term saving. A lot of countries, probably the three that would strike the most comparisons for us Western industrialized listeners here in the United States is that France, Germany and Japan all have postal banking. And it's a, it is not like a cure all, but it is a way that people who either don't want to use banks or don't have access to banks can hold small dollar deposits, can cash checks. They don't have credit cards attached. They don't have anything else attached. And there is a real push that has waxed and waned over the past 25 years that we need to bring back postal banking. The postal workers union is very much in favor for it. Favor of it.

[B]

Yeah. I think this was last proposed in 2022. We'll see if that ever gets revived again. But there is a feeling that it could in fact shore up the postal service financially.

[A]

Yes. By expanding their services.

[B]

By expanding their services. Yeah.

[A]

I mean, I'm trying to imagine, like I am not Boxed out of financial services. So if they had a postal banking system, would I need it or use it? And of course I'm thinking like it would probably be a great place to park some money for kids of like a way to teach them about bank accounts and to have an institution that I feel safe and I don't have to worry that if I create a bank account but don't touch it because I'm intending it for children over long term that I'll actually lose it all to fees. Yeah, I just don't like banks. I don't, I don't like them. Yeah, I don't. It's not that I don't see their purpose. It's not that I think they're all bad or they only do bad things. I think they do amazing things. But I think, I mean they absolutely go after fees and exploitation when they have to. It's like I fly in an airplane. It's not because I love airlines, it's because I would like to get across the country. I don't fly because I love airlines. I don't put my money in a bank account because I love banks. They do not want the alternative we've talked about before, the child savings accounts and the retirement accounts that everyone's have access to.

[B]

The Trump accounts and the Trump accounts.

[A]

The Trump accounts and the Trump accounts in 2026. The Trump accounts and Trump accounts but you know, also called child savings accounts and also called the auto IRA or the thrift savings plan. The whole point of those accounts is that not everyone is served by a private sector. Private provided for profit. Good. So you need to come up with an alternative. The alternative is a public proof provision.

[B]

We need something that is the public provision.

[A]

Yes. I think there's part of me that is just like we should always have cash around because if nothing else it serves as a check on banks of how much power they can really have. Because we have a way of interacting with an economy that doesn't involve them. And there's something nice about that. I know that that's not necessarily like the best policy solution. The best policy solution is we will have alternative banking services that come in public areas and have better access to low income communities. And so that we don't have to be quite so held over a barrel by the banking system. That's the better option forward. But that is like the ultimate $20 bill you find when you take your pants out of the dryer. The ultimate 20 is to continue to have cash. But I'm not married to this One, I think if there were a good enough slate of financial services and products in which the interaction that most low income people have is not like pure exploitation in usury, I think I would be okay with getting rid of cash.

[B]

Yeah. Yeah.

[A]

Well, for those of you who would like to contribute to Optimist Economy, we do not take cash. We do take check. But obviously our preferred method is to have a burlap sack full of gold coins with a dollar sign on the side of the sack. And that is, that is the currency that we prefer here on the show.

[B]

You can't mail us like a ten dollar bill in an envelope like my grandmother did at Christmas time. You can't do that to us.

[A]

I think you can mail us a ten dollar. You can mail us cash.

[B]

Optimus, you can mail us cash. We'll figure it out.

[A]

Yeah, you know what? If you gave us cash, I would, I would, I would figure it out. Optimist Economy is not cashless.

[B]

Okay, good. I'm, I'm glad we're on the, on the record there. Okay, we'll be back in a second for executive orders and spiritual sponsors. Are you ready, Catherine?

[A]

I'm ready.

[B]

Okay, so executive orders. What do you got, Katherine?

[A]

My executive order for the week is that youth sports need to be regulated so that their schedules ain't so crazy.

[B]

Okay.

[A]

Because their schedules are crazy. And I think we need to have some like, pretty clear limitations on like, we can call it a health and safety measure, but like you can only practice and play games so many times per week per sport.

[B]

Yeah. Friends who had multiple kids in multiple sports. I don't know how they did it. I don't know how they did it.

[A]

Yeah, it's a lot for just the logistics of getting kids from place to place. But then I've talked to a lot of older parents who said that it really does end up that even if your kid loves sports, they can really only play one because the competition for time gets so intense. I also think that travel sports, and this is another health and safety bands, you cannot have travel sports until like age 14, 15, something like that.

[B]

Yeah, yeah. Till you're old enough to go maybe on your own and your parents don't have to go on every trip with you. Yeah.

[A]

And this would of course help parents feel more sane, but at the same time would be a lot less classism in the youth sports world because it is incredibly expensive to do all of those things. And it's wild if you have more than one kid who wants to play more than one sport. I mean, you're down thousands of dollars, and it makes sports, being competitive at sports a privilege of the elite. So it's not just because I don't want to drive places or do things on weekends. It's also for America.

[B]

All right, For America, youth sports need

[A]

to be 50 to 70% less intense.

[B]

I endorse this. Speaking of junk fees. Yeah. I think that airline luggage fees should be done by weight, not by item. Like, if I have two 10 pound bags, why should that cost me twice as much as one person who comes in with a 20 pound bag? They have a scale. You drop this stuff off, they weigh it right there. This is, this is to me a common sense reform that the American people will embrace.

[A]

In addition to having a bathroom of a decent size, I would like to be charged in a sensical way for what I am doing. 100%.

[B]

Yeah. Yeah. Okay.

[A]

Spiritual sponsors. Things that get us through our week. Yeah, my spiritual sponsor is a little bit of a throwback now, but watching the Artemis crew splash down in the water with my kids around me, the, like, yelps of joy that they like when they saw the splash. I mean, it was just like pure joy and excitement. And I'm like, well, we're just hanging out on a Friday night watching the frontier of human achievement. Mom is sobbing. Like, of course. Mom just absolutely sobbing.

[B]

It's like the Olympics of space.

[A]

It's just the Olympics. Absolutely. Space Olympics. Human achievement really moves me. And I mean, I'm sitting there sobbing and my kids turned around and one of them said, but wait, is everything okay? And I was like, yeah, everything's great. Mom's just really moved. So the Artemis crew touching down and then the real lovely hangover of the hour it took for them to get the front porch out and landmark Front porch talk. How quickly my 5 year old and 3 year old were like, where's the front porch? Should have deployed by now. They just. They like, they got it.

[B]

Is it actually called a front porch?

[A]

It was called the front porch. And then I came home and my 6 year old was coloring and he was making a front porch for a capsule. This is like the bane of people who have cats or children. As cardboard boxes never really go away.

[B]

No, they don't. Yeah.

[A]

I now have cardboard front porches.

[B]

Oh, good, good, good, good. My spiritual sponsor this week, this is kind of a throwback to our friends with trucks, friends with pool, friends with season tickets, friends with season tickets to the Dodgers. Yeah.

[A]

Oh, the Dodgers. Oh, no, Robin.

[B]

Even the Dodgers.

[A]

Even the Dodgers.

[B]

Even the Cashless Dodgers. Yeah, I went to the game on Friday. It was, it was, it's just really fun. Dodger Stadium is really, it's just a great place to see a baseball game. It was beautiful. And, you know, friends with season tickets.

[A]

That's awesome. Friends with season tickets. We thank you.

[B]

Yes, thank you.

[A]

Optimist Economy is a non profit, but that doesn't make the show free to produce. It does mean we can take contributions from your donor advised fund if you have one. And we'll also just take, you know, cash in an envelope. Send it our way.

[B]

If you're on substack at either our free or paid levels, you can join the Optimist Economy chat, chat and talk with your fellow optimists. And if you have the means to contribute at whatever level is comfortable for you, we'll take your [e-mail] the Optimist

[A]

Economy Podcast is edited by Sophie Lalonde. Our video production for social media is by Andy Robinson. Video clips from the show for you to share are available on TikTok, Instagram, YouTube, LinkedIn. And you can buy a T shirt, a hat or a tote bag on our website optimistacademy.com and we're also on Facebook. Oh, and we're on Facebook now.

[B]

Oh, my God.

[A]

Oh, Optimist. At some point, I'll tell you the story of why Facebook doesn't think I'm a person. Because the banks told them no.