The new Speaker of the House reportedly has no bank accounts (@flurb posted about it here).
This is FQ so need to steer clear of politics.
My question for FQ:
Is it possible to live in the US with no bank account?
Of course you can. Just deal in cash, and keep some with you at all times. Just like any other country I can think of.
How do you get paid in cash? How do you pay rent/mortgage in cash? Electric bills in cash? etc.
It’s probably not quite that pat.
The Daily Beast reports that in financial disclosures dating back to 2016, the year he joined Congress, Johnson never reported having a savings or checking account in his name, his spouse’s name, or in the name of any of his children. In his latest filing, which covers last year, he doesn’t list a single asset either. Which, given that he made more than $200,000 last year—in addition to his wife’s salary—is more than a little odd.
As reporter Roger Sollenberger notes, it‘s unlikely that Johnson literally does not have any sort of bank account, and that he’s, like, stuffing his money in a mattress. Rather, the most probable explanation is that the Speaker lives paycheck to paycheck, and the money he does have in various accounts doesn’t meet the reporting threshold set by the House Ethics Committee; members must disclose any accounts, at any financial institution, that has at least $1,000 in them and a combined value of more than $5,000. (Accounts belonging to members’ spouses and dependent children count toward that minimum.)
EDIT: I don’t seem to have addressed the OP, instead merely pointing out that one of the underlying assumptions might not withstand close scrutiny. Regarding the actual question, I agree with dolphinboy – no bank account can be done, but it’s very inconvenient and requires one life to be structured in a exceptionally constrained way.
It can be done. You get paid in cash or cash a payroll check at a check cashing place. You pay your bills at the utility office or at the grocery store customer service desk. You pay your rent in cash or with a money order. But it’s going to limit what you can do. You can’t work a job which only has direct deposit. To order stuff online or pay for stuff with a credit card, you would have to buy a prepaid credit card. It would be a hassle, but it could be done.
Rent and mortgage can be paid with money orders. “Buy a money order” will be the answer to a lot of the “what about this?” type questions. US Post Offices sells money orders for about the best rates you can find.
Electric bills (and several others) can be paid in cash around here at dedicated utility service centers. Admittedly, these centers were easier to find 20+ years ago but they’re still around.
Cash app is one way.
No need for a bank account or debit card.
I would guess - it depends how you define “live”. My experience is with Canada, not a lot different. Almost every company I’ve encountered no longer even issues paycheques, you must have an account for direct deposit. And if you are not a customer of their bank, many banks will not cash cheques, particularly a cheque for a week or two of work at a better-than-menial job. I assume payday loan companies might, but you pay for that privilege. (IIRC a congresscritter gets almost $200,000 a year, which is over $3500 a week.)
I assume you can have a credit card without a bank account, but it would be an interesting situation. If you can carry a positive balance, is it not an “account” by another name? There’s a lot of things that are incredibly difficult without a credit card - renting a car, checking into a higher end hotel… How do you pay a credit card bill with cash? you’d have to walk into that bank branch. Ditto for your electrical bill, you auto insurance, etc.
I do recall reading about people with credit propblems and especially those with large outstanding debts avoiding having their money go through an account where it could be seized - especially back when chasing deadbeat dads first became a thing; but again, that would be in marginal jobs rather than a normal middle-class lifestyle.
My aunt who married at 18 and died at 76 still married to my uncle NEVER had a bank account in HER name–everything was in her husband’s(my uncle’s) name.
I am sure there are plenty of other people in HER position,
I think the most likely answer is that he operates from a family trust or LLC. So none of the assets or accounts are in his or his spouse’s names, even though they are set up for the benefit of them and their offspring.
It’s also probably set up in South Dakota.
Yes. Live in a homeless shelter and get paid by a fast food outfit in gift cards. People do that.
But, much like Venmo, the recipient also must have a cash app account to actually get the money. Doubtful that you could pay your water bill or electric bill or mortgage via this method.
FWIW my employer will not pay in cash…will the IRS even allow that?. Check or direct deposit is it. I suppose I could cash a check at a check cashing place but they are expensive.
I am not sure how I could pay my mortgage without a bank account.
The buzzword here is “financial inclusion”. Apparently, even in wealthy countries the number of people who are excluded from the banking system is surprisingly high, and “financial inclusion” is the umbrella term for initiatives to make services available to them. Of course, in most cases the reasn for financial exclusion is simply poverty, whereas the OP is probably asking whether it is possible to live a reasonably well-off life-style without a bank account out of one’s own volition.
I am not sure it is easy to manage to live as a poor person without a bank account in the US.
I saw a program on CBC (Canadian Broadcast Corp) about the risk of counterfeit cashier’s cheques. Obviously less of a concern for the electric bill - first bounce, they can cut you off - but for things like buying a car, or any item where you walk (or drive) away with the product, it’s a risk the merchant will be more and more reluctant to take over a simple piece of paper that can be faked by a fancy laser printer.
I will correct my previous post - if you want to cash a cheque and are not a customer, you have to go to the bank where the cheque was issued (or, I assume, a brnach) - not just any old bank.
How does a trust work? Is it two-way? Can you actually use a trust like a piggy bank and put money into it, or is it not just to hold a pile of older money and dole it out instead of dumping it on the recipents’ laps?
I find it hard to believe someone could live paycheque to paycheque on $3500 a week and not accumulate anything close to $5000 unless your expenses included powdered products. Something is not right.
You get paid by check, and take it to a check cashing place.
You pay your mortgage at the bank at the counter.
My (majpr multi-state) electric company has “authorized locations” where you can go and pay by cash, or pre-paid debit card, or money order.
You can go to city hall and pay your taxes, water bill, etc. in person in cash.
This is not an uncommon situation, for a variety of reasons.
Now (setting aside that even your cite doesn’t actually claim that the Johnson doesn’t have a bank account), federal salary must be paid by direct deposit. So that’s going to be more difficult.
Yeah, lots of people get in a situation where they get overdrawn etc. and blacklisted by the DDA account “credit bureau” ChexSystems. Then they might not be able to open an account for some time so they live by cashing checks in the bank, or pay a fee for a check cashing place. This is a decent amount of non-business traffic in banks during the day.
I remember that my father didn’t have a bank account when I was growing up, but that was a different era. At first he got paid in cash, then after a robbery at the company on payday, they arranged with a nearby bank for them to cash paychecks for their employees. I am not sure what id was required but that worked. There was an service center near our house that you could pay your electric, gas, water, etc. bills for a small fee (like 10c). If necessary you could go to a bank and get a money order. That was then, 75 years ago. Now? It would be much harder. I know that if I had a visitor that I was paying a month’s expenses for, McGill will issue a cheque and there is a certain office that will “guarantee” it so that it was cashable at any bank. But whether they would do it for regular paycheques, I do not know, but I rather doubt it.
I have read that one of the real hassles of the “unbanked” is that when they get a check (or, in Canada, cheque) they have to pay an exhorbitant fee to cash it. When I spent a year in Switzerland, I found that essentially everyone had a postal banking account that was free and you could go into any post office and deposit money (or a check, I assume) and pay any bill. It has been proposed to do that in the US to help with the unbanked, but it has never happened.
I do know that in the case of Rep. Johnson, only bank accounts over $1000 are required to be reported.
Oh and to answer one other point raised above, it is possible to maintain a positive balance on a CC. I did this once, although that was 1991. I sent Visa a $5000 excess payment and then went to banks in various European countries we were visiting and took a “cash advance” of $1000. I did this five times. The banks took minor fees, but Visa could not charge me interest. Which on cash advances is charged from day the advance is made. Obviously Visa understood what I was doing, but they allowed it. ATMs were not ubiquitous in those days.
According to this report by the Federal Reserve:
Six percent of adults were “unbanked” in 2022, meaning neither they nor their spouse or partner had a checking, savings, or money market account. This share was unchanged from 2021.
No doubt, it presents challenges - but a non-trivial number of people do it.