Banking Services & Other Legal Loan Sharks

Say you needed to send an emergency loan to an out-of-town or out-of-state friend. He needs that money as soon as possible; As in, the next day. What cash conveying service(s) come to mind?

You could try sending a personal check, but then your friend would have to wait on the mail. And even if you overnighted it, after he received it, he would still have to wait on the check clearing from the bank. And these days, check processing takes anywhere from 3 to 10 business days if you’re lucky.

Note:  A “business” day means Monday through Friday, not including holidays.  And you better hope that your friend’s bank isn’t going to hold the check extra long because of problems communicating with your bank, particularly if yours is from an out-of-state or smaller (non-bailed out) bank.

Remember that your friend needs the money immediately, so mailing a personal check isn’t the most expeditious option. Nor is waitng for the banks to process it.

What about setting up your friend’s bank account (assuming he has one) to accept a transfer from yours? 

This may also seem like the way to go. In fact, many banks have this option. But then you’d be looking at the time it takes to set it up on either end, the time for the bank to give the setup its blessing, plus the fees your bank and your friend’s will inevitably charge the both of you for the convenience. And you don’t want to be doing this during non-business hours or weekends, because that will make setting up the transfer take longer. 

Meanwhile, the clock is ticking.

OK, then how about wiring the cash through a transfer service? This seems the quickest way. After all, doesn’t Western Union and the like exist for the sole purpose of wiring money quickly?

Well, sure, but the definition of the word, “quickly” depends on who you ask.

You could, in fact, go out to the Western Union website, create an account, and then proceed to send the money. Or you could go directly to a Western Union agent, such as a grocery store. Except that you better have thought about sending that money at least 10 days in advance because that’s how long (conservatively estimating) that it’s going to take Western Union to snail mail you an identity confirmation notice.

Time is passing quickly and your friend still needs that money. What to do. What to do.

What can you do that will ensure your friend will have the money immediately, no waiting?

I’ve got it!  A money order.

After all, you can’t get a money order unless it’s paid for in cash, and, then it’s as good as cash. So then all you have to do is overnight it to your pal and voila!  He will have his emergency loan.

Not quite.

First off, if your friend does not have a bank account, then he will have to go to a check cashing service otherwise known as a payday loan.  Ha! May as well have told your pal to go ask Vinnie for the money because the fee that the payday loan place is going to charge your friend for the privilege of cashing your money order is going to make Tony Soprano blush.

Yours truly contacted one of these establishments and was told that the rate is a percentage of whatever the amount of the money order is. I quoted an amount of $500. You Betcha We’re Gonna Screw You Payday Loan Company then told me that it would be $40 bucks to cash the money order.

Commit usury much?

Note:  The U.S. Post Office only cashes money orders issued by the U.S. Post Office.

Second Note:  A Western Union brand money order will only be cashed by a check cashing service.  Not even a Western Union agent (such as a grocery store will cash it).

Third Note:  A bank-issued money order is held for processing by another bank the same as a personal check would be.

But what if you friend does have a bank account?

Ok, great!  Then his bank will be happy to hand over the cash from your money order provided that he has the amount of your money order or greater already in his account(s). 

But it’s a money order! As good as cash!

Not according to the bank, which, in all likelihood, is one that is considered “too big to fail” by the U.S. federal government.

Since your friend does not have the amount of your money order already in his account, the bank will then deposit it, where it will take an additional 7 to 10 days (conservative estimate) to process your money order. You know, the same one you thought was equal to cash?  Thereafter, he can have the emergency loan you lent to him. 

Good thing he didn’t need the money in a hurry, eh?

But what about PayPal and such?

Yes, if your friend has a PayPay account already set up, then it will also be glad to take your money. It’s just that your friend had to establish his PayPal account via his bank, and both the bank AND PayPal will be extracting their cut of your money for the privilege of your friend having access to it.

Given the clusterfuck that comprises the legal way to transfer money, it almost makes using the local “illegal” loan shark named Vinnie the more attractive option, doesn’t it?

©2012 Peyton Farquhar and Prattle On, Boyo™.  Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.  Excerpts and links may be used, provided that full and clear credit is given to Peyton Farquhar and Prattle On, Boyo with appropriate and specific direction to the original content.


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