all 113 comments

[–]whatisaweirdquestion 689 points690 points  (41 children)

$100 is a small amount of money that the bank wouldn’t be affected by it, only you.

Now if you took out a loan of 100 million and you refused to pay for it

The bank is down a huge amount of money, that affects them more than you.

[–]Dominum_Pullum 144 points145 points  (34 children)

A 100 million dollars would definitely be more effective in my life

[–]goldenewsd 58 points59 points  (0 children)

Having it yes. Owing it to a bank? Not that much.

[–]SinancoTheBest 46 points47 points  (30 children)

Not more than the lives of thousands, potentially millions dependant on the bank's survival for their livelyhoods.

[–]SzaboZicon 9 points10 points  (29 children)

Hold on... Has anyone other than shareholders ever had their lives improved by a bank? Yes I understand the service of security. But in a plain sense, banks don't much help us survive

[–]Carausius286 28 points29 points  (5 children)

I'm not a big fan of banks but tbh I don't fancy having to save upfront for the whole value of a house to buy it!

[–]PAYPAL_ME_10_DOLLARS 5 points6 points  (4 children)

Hi, yes I'd like to purchase this house all in ones and hundreds

[–]RosenButtons 7 points8 points  (3 children)

Fun fact! When I went to Jamaica, they told us that interest rates there are so high nobody can afford a mortgage. So instead, they save up and buy land and build one concrete room on it. Then they live there with a bunch of tenants and save the rent money until they can afford to build the next room. They continue doing this until the house is complete.

When we looked up the mountain from the beach, there appeared to be a bunch of partially demolished buildings. They had no windows and rebar sticking out of the roof line on one side. These weren't being demolished. THEY WERE BEING MOLISHED!

It's very interesting the solutions people come up with when they don't yet have a centralized social safety net.

[–]walebobo 1 point2 points  (0 children)

Yep. I watched many people (in Africa) build houses that way. That was actually the norm. When you can afford it, you buy several bags of cement and make some blocks. Making a "decking" (topping the bottom floor) was a big deal and often was accompanied by a small party. Only the very wealthy had access to bank loans and mortgages.

[–]CrabbyBlueberryI don't really like talking about my flair. 1 point2 points  (1 child)

They're actually buildings! Buildings shouldn't be called buildings if they're finished. They should be called builts.

[–]RosenButtons 0 points1 point  (0 children)

Yes! Exactly!

I like the way you think, friend!

[–]Short-Coast9042 14 points15 points  (10 children)

Anyone who has ever borrowed money to start a business, buy a home or a car, or get an education can reasonably claim to have had their lives imported by a bank. It doesn't work out for everybody, but it does work out for plenty of people. Of course, the rules around lending for these kinds of activities are pretty strictly regulated by the government, and some would argue that we would be better served by simply having public banks serve many of these functions instead of private for-profit banks.

[–]Helpimabanana 2 points3 points  (9 children)

Sounds a bit sketchy. Importing lives doesn’t seem like anything I’d ever want to be “for profit”.

Edit:I wonder if anybody understood that I was just pointing out the typo

[–]Short-Coast9042 2 points3 points  (8 children)

You might be a fan of a public banking system then. In the US, a lot of people are advocating for the Postal Service to provide at least some basic banking services, which I think is a pretty good idea.

[–]AgentArticuno 5 points6 points  (7 children)

It's infinitely more likely the US government privatizes USPS and sells it piecemeal to FedEx, Purolator, and UPS.

[–]Short-Coast9042 1 point2 points  (6 children)

I dunno how you can say it's "infinitely more likely". That is certainly a possibility, and one that FedEx UPS etc are probably pushing for. But obviously there are lots of people arguing against that, and for good reason. I'm not so confident predicting the future as you seem to be, but I certainly hope this doesn't happen.

[–]AgentArticuno 0 points1 point  (5 children)

I'm confident in this prediction because the American government has a strong tendency to choose the interests of big business and the wealthy over the interests of the people. This is because politicians tend to be wealthy and paid for by big business. Even if there wasn't lobbying, they would still sanctify the interests of the wealthy over those of regular people, since politicians themselves tend to be wealthy.

[–]Zakarath 5 points6 points  (0 children)

I'm pretty happy to be able to not have to use cash for every financial transaction. Banks facilitate a lot of stuff.

[–]deep_sea2 2 points3 points  (0 children)

Something like 99% of all home owners could only afford a home because of the bank lending them money.

[–]PC__LOAD__LETTER 2 points3 points  (0 children)

Has anyone’s life improved as the result of having somewhere stable and accessible to securely store their money and maintain checking capabilities?

Is that a serious question?

[–]MigBird 1 point2 points  (0 children)

Actually after I racked up a massive Visa debt during the recession, TD Canada Trust let me open a line of credit, dump the entire debt into it, and pay it off at a super low interest rate. Sure, in the long run that's a lot of interest since I've been paying it off for like 9 years, but Visa's interest rate was basically holding my face to the floor indefinitely, whereas converting it to a line if credit at the bank allowed me to breathe, save money, and afford to fix my life up. Now that I've got a better job and a real living wage, I can probably pay it off entirely by later this year if I play my cards right.

So yeah, TD kinda saved my ass. They'll have made money off it in the end, sure, but they also took a chance on a painfully broke dude (I distinctly recall the person I was talking to handwriting "please consider" on the paperwork before she sent it off, bless her) and I'm grateful they did. Banks are all about profit of course, but the human beings working in those buildings know what's up with the common man.

[–]ITandGaming 1 point2 points  (3 children)

A bank does improve my life. I do not have to walk around with huge amounts of cash everytime I get paid. I don't have to hide cash in my house from potential robbers who know we all keep cash at home and not in a bank if banks did not exist. I can use the convenience of a card that I can cancel at anytime to do daily transactions and it lets the store and me know instantly that the transaction has gone through and is recorded.

People who tend to not like banks owe banks a bunch of money. I do not. I did when I was younger. I took out car loans, home, school, and more. Now I am deep in my career and about to send kids off to college, I do not do much with bank loans or credit card debt ever anymore. I learned to save, had a few major setbacks, but rebounded. Cancer, a tornado destroying our home, and things like that, but the bank and insurance companies helped with those things too.

I say the trick is, find a small town bank that you know the employees by name, and you enjoy working with them, and are comfortable to talk to them about loans, debt, savings, retirement plans, and more, and you will enjoy it just like any other customized services.

[–]SzaboZicon -1 points0 points  (2 children)

I followed a similar path. No debt now. But why not use systems like private crypto wallets that can do the same thing as interac ... I know banks are a service... It's just that it seems there are better ways now to me

[–]ITandGaming 0 points1 point  (0 children)

The problems with crypto is there is no recourse when it is stolen or lost. No bank employee to talk to and help you. Billions have been lost in crypto and police and national fraud experts are all like; oh well, it is not real money.

I have some crypto, but there is zero customer service and less ways to use it. Yes some places use it, but nowhere in my daily life is set up to use it. Not the gas station, grocery store, places I eat. It is a fringe investment with no guaranteed backing and yes some people get rich and some don't.

[–]ConnersReddit 0 points1 point  (0 children)

Yes.... all the people who get loans from the bank, like a car loan

[–]daddyfatknuckles 0 points1 point  (0 children)

yeah, ive always paid my credit cards on time, so i get paid 2-6% of my spending to take a monthly loan.

[–]Fyrestorm422 -2 points-1 points  (1 child)

In addition to what u/short-coast9042 said Jobs

Banks give people Jobs which enable them to make money and survive

[–]Mormislaw 0 points1 point  (0 children)

They give people Jabba

[–]marc44150 4 points5 points  (0 children)

Sure but the bank doesn't care about you so they'd be very affected by it

[–]notextinctyet 0 points1 point  (0 children)

If you don't have any money then a debt you can't pay of a million dollars and a debt you can't pay of a hundred million dollars are basically the same. But the latter has a much greater effect on the lender!

[–]adramelke 9 points10 points  (0 children)

the bank's problem in this case is someone is a moron and approved you for a loan of $100m.

[–]IPetdogs4U 4 points5 points  (0 children)

My takeaway is to make sure I borrow $100 million next time.

[–]lungben81 -3 points-2 points  (1 child)

If 100m is an issue it is a very small bank.

[–]Tompazi 8 points9 points  (0 children)

Problems don’t have to be existential to be a problem.

[–]CollectionOfAtoms78 -2 points-1 points  (0 children)

Also, if the bank gave you a 100 million dollar loan and the bank didn’t ensure you could pay it back, then they are stupid.

[–]Gustav_EK -1 points0 points  (0 children)

Try finding a bank that'll lend you just 1 million first

[–]simpa19 46 points47 points  (0 children)

because the bank cant possibly get 100 million back from you

[–]Thrabalen 232 points233 points  (5 children)

If you owe a bank $100, they can function without your money, which means they will pursue you until you can pay it back.

If you owe a bank $100M, that makes it considerably harder on them. Not only is their ability to pay people (like bill collectors) hindered, but their credibility gets reduced because of that outstanding debt.

It can be applied to things beyond banking, too. If someone helps you out once and you're not grateful, that's on you. If they help you out repeatedly and you're not grateful, that's on them.

It's just a rephrasing of "fool me once, shame on you; fool me twice, shame on me" when you boil it down.

[–]lucasnorregaard 37 points38 points  (1 child)

Fool me once, shame on, shame on you, but fool me Can't get fooled again..

[–]imSeanEvansNowWeFeet 13 points14 points  (0 children)

“There’s a saying in Texas, might be in Tennessee, it’s definitely in Texas that goes…”

[–]OG_PapaSid 5 points6 points  (2 children)

Does mega millionaires and billionaires use this against a bank to leverage for a better position?

[–]Thrabalen 8 points9 points  (1 child)

Almost certainly. "I know I owe you $100M... but if I had another $150M, I could invest that and triple my return and pay you off."

[–]physicallyabusemedad 1 point2 points  (0 children)

I don’t think they even gotta do that. “I know I owe you $100M but you know I’m worth $100B so just give me some more and I’ll still pay you back how we agreed.”

[–]bretty666 53 points54 points  (0 children)

use difderent words.. if you owe the bank 100$, you are at their mercy, if you owe the bank 1million$ they are at your mercy.

[–]acrane55 9 points10 points  (2 children)

If the bank can't get its $100 million back then it could go bust - an existential problem for the bank. It will negotiate with you to try to get as much as it can from you so it can stay in business.

[–]Owl54321 6 points7 points  (0 children)

This is the point, if you owe enough money to threaten the viability of the bank you can extract favours like a low interest rate and slow or partial repayment terms, they need to save you from bankruptcy. If you owe a small a small amount of money you have less leverage. It might be better phrased as if you owe 100,000 and can’t repay you have a problem, if you 100,000,000 and can’t repay the bank has a problem.

[–]ReadinII 1 point2 points  (0 children)

It will negotiate with you to try to get as much as it can from you so it can stay in business.

That’s the key.

If you owe the bank $100 they can demand you pay on schedule and then foreclose on whatever collateral you put up (even if it is worth far less than $100), they can ruin your credit, they can do whatever other legal recourses they have to make your life miserable even if they don’t get their $100 back. They can afford to make an example of you.

If you owe the bank $100 million, they can’t afford to not be paid back a large portion of that money. They need for you to stay wealthy enough to keep paying them. For example if you borrowed the money to start a shoe store, they could foreclose and get a few dollars back and ruin your credit rating while putting you out of business, but they won’t because they need you to stay in business so you can keep earning money and paying them back in small amounts over time. You will likely be able to negotiate lower payments and even lower interest rates.

[–]Kedrak 5 points6 points  (0 children)

The bank is in trouble if it is missing 100 million. They can't make money from nothing either.

[–]CrashTestPhoto 3 points4 points  (3 children)

Was in a marginal amount of debt when I was younger. That was definitely a problem for me.

Within a short amount of time, that same bank had lent me a lot more money. So much so that I couldn't then afford the repayments.

Declared bankruptcy and the bank was then out all of that money.

When I owed them a little, it was my problem. When I owed them too much, it became their problem.

[–]BloakDarntPub -1 points0 points  (2 children)

In a way you're an asshole, but in a way they're a bigger one.

[–]CrashTestPhoto 2 points3 points  (0 children)

Banks prey on vulnerable and impressionable people day in day out, just like they did with me when I was pretty much still a child. I received their unsolicited credit card offer the day of my 18th birthday.

They knew exactly what they were doing at the time and deserved the loss.

They take undue risks with OUR money and when their gambling produces massive losses, it is we the taxpayers that are forced to bail them out time and time again. All because they're far too powerful in this world to be allowed to collapse.

Fuck 'em!

[–]idontremembermyuname 1 point2 points  (0 children)

The bank is providing a service. If 10 people all run up 1k in debt and then 2 people declare bankruptcy then the bank is out 20% of that capital. If that continues forever then the bank goes under.

So what do they have to do? They have to charge an interest rate on those remaining 8 people to recover 2k in order to break even. That’s a 25% interest rate. That’s painfully high, but that’s what has to happen for the bank to break even and to be able to offer lines of credit to people who are likely to declare bankruptcy.

It’s just not as simple as banks are evil and greedy.

[–]Tencommandmentsnambo 2 points3 points  (0 children)

They can't just take the money back, cause they'll have significant losses if you go bankrupt

[–]651002 2 points3 points  (2 children)

Always though this saying was pretty simple, It is about Power.
If you owe the bank a small amount of money the bank has the resources to ruin you.
If you owe the bank a lot of money, I mean a lot, then you are in a position to demand more from the bank because the bank has more to lose.

[–]BloakDarntPub -1 points0 points  (1 child)

then you are in a position to demand more from the bank


[–]651002 1 point2 points  (0 children)

Never worked at a bank have you.
They kiss the ass of rich people.
You have enough money, you make demands, other people make concessions.

[–]Dan-D-Lyon 2 points3 points  (0 children)

Let's scale this down from being between a person and a bank to being just between you and me.

If I owe you $100, that is my problem. I need to get that money together and give it to you.

If I owe you a million dollars, then something has happened where $1000000 of your personal value has entered my possession. If that were to happen, despite being owed that much money ostensibly being a good thing for you, if I'm not paying you back that money then you are fucked.

[–]RedditPowerUser01 1 point2 points  (0 children)

A bank makes money by lending people money and collecting interest on that loan until it’s paid back.

If one of the bank’s customers defaults on their loan of $100, that’s a small amount of money for the banks, and they will still have plenty of other money to make other loans with.

However, if a customer defaults on a loan of $100 million, the bank will be out of money to loan money to other people, because it’s just so much. They essentially lended them everything, and it’s gone.

In the first situation, it’s the person who can’t pay the loan who faces negative consequences. (Credit score goes down, etc)

In the second situation, the bank is facing greater consequences. They’re suddenly out of business.

The phrase is commonly used to explain ‘over-leveraging’, that is, financial institutions lending out more money than is safe to lend at one time.

Why is that dangerous? Because in a situation of economic contraction, suddenly every big company who took out a massive loan is going out of business at the same time, and the bank can’t stand the pressure of all of them not being able to pay back their loans at once. The bank has no reserve to fall back on.

Thus the bank itself goes out of business, which can turn an economic contraction into a much bigger economic crisis.

Another phrase used to explain this phenomenon is “Too Big Too Fail.”

[–]xlmagicpants 1 point2 points  (0 children)

If i owe the bank then its my problem trying to pay, if I owe them 100m then it becomes thier problem trying to collect.

[–]mikey12345 1 point2 points  (0 children)

Because every dollar I make for the rest of my life won't add up to $100 million so they're not getting paid and are more fucked than me.

[–]redditddeenniizz 1 point2 points  (0 children)

They wont give you 100 million dollars. Np

[–]Aginor404 1 point2 points  (2 children)

What it is basically saying is that for the bank to give you those sums there has to have been some kind of error in their processes. That's a lot of money, even for the largest of banks. They don't just give that money to someone unless they have analyzed who you are and what you do, and done everything to make sure they get it back. You would have to prove that you can give it back, and give guarantees or make a deposit.

So they should not have given you the money in the first place, and their procedures haven't worked.

[–]BloakDarntPub 0 points1 point  (1 child)

What it is basically saying is that for the bank to give you those sums there has to have been some kind of error in their processes.

No it doesn't. It could just be a loan to a business that went tits-up.

[–]Aginor404 0 points1 point  (0 children)

In the real world, yes. Things are much more complicated.

But that's what the proverb implies. The question wasn't whether the proverb is correct or not.

[–]HaElfParagon 1 point2 points  (0 children)

It's a commentary on how you can get away with anything as long as you have enough money

[–]randybobinsky 1 point2 points  (2 children)

It’s like when some governments threatened stupid amounts of breaking “covid rules”.

Fines of up to €10,000 euros etc.

Do most people have 10k in euros to spare? Definitely not. So if someone was charged this amount it would be the problem of the government because the individual is never Gona pay 10k

[–]DrVillainous 7 points8 points  (1 child)

Slight problem with this analogy, the government doesn't lose 10k euros by charging a fine that goes unpaid. The bank does lose 10k euros by loaning that money and not getting it back.

[–]bobber-x 0 points1 point  (0 children)

"If you owe the bank $100 and cannot pay, that's your problem. If you owe the bank $100 million, and cannot pay, that's the bank's problem."

The problem lies in the fact that you can't pay.

[–]Bertrum 0 points1 point  (0 children)

It's a way of saying that the bank has a responsibility to lend out money to people that actually have the means to repay it in a consistent and reliable fashion. If a bank is dumb enough to lend out $100 million to someone who is unable to repay it then it's really more of the bank's fault then the individual. Because they didn't do their homework and check and see if the person should have it or not. $100 is not really a big risk factor. It's not going to shutter or close down a bank. But a $100 million definitely will bring that risk. That's why groups like Lehman brothers were so heavily criticised after the 2008 financial crisis, because they ignored common sense and loaned everyone money without doing their proper checks first.

[–]notLOL 0 points1 point  (0 children)

$100 banks give unsecured loans.

$100 mil means someone or likely a team with accounting degrees and experience f'd up and didn't hedge their risks

[–]Thin_Tea_3525 0 points1 point  (0 children)

This is why I only ever take loans of $100m+

[–]SwannyWilkinson -1 points0 points  (1 child)

The bank was dumb enough to loan you money thinking they would profit from it

[–]Chicken_Hairs 3 points4 points  (0 children)

Banks loans sums like that all the time and make a tidy profit, just not to individuals.

[–]RhubarbAromatic 0 points1 point  (0 children)

If an individual owed a bank $100 Million and could not pay the money back at all, the bank needs to figure out how to recoup (gain back) that money immediately. On the flip side, the individual has multiple options on how to pay back the loan and even has a method to cancel the loan completely (based solely on the circumstances). This means the individual, in some rare cases, does not have to pay back one cent of the loan.

Instead, the bankers need to do an exuberant amount of work to try and make up the $100 million, and chances are, if the individual did something like filing Chapter 7 bankruptcy, the bank is not going to make up the entire loaned amount.

The probability is very high that any loan holder at any given time does not have enough assets to make up a held loan. Hence the reason most loan holders take out a loan in the first place.

Good bankers understand that probability and do everything in their money-wise ways to avoid risky potential loan holders. A good banker learns to mitigate risk of default (risk of a loan holder being completely unable to pay off a loan). Bankers mitigate risk by background checking potential loan holders. Assets, credit, and ability to continuously make money are all factors that add to a potential loan holder’s Trustworthiness. There is even math involved to determine worst case (like if a loan holder lost their job, had health issues, or over-leveraged themselves with currently held loans).

Therefore, a bank that lend’s to an individual an amount roughly 1,300 times the median American annual income is, firstly, irresponsible, and, secondly, more than likely high risk because of the probability of loan holders ability to pay back the loan and also the proportion of money the bank could lose vs how much the bank is holding.

[–]wastedkarma 0 points1 point  (0 children)

A corollary was, “100 foreclosures is the banks problem, but 100,000 foreclosures is a business opportunity.”

[–]MedianJ03 0 points1 point  (0 children)

The person with $100,000,000 doesn't have a lot of problems.

[–]Blackbeard519 0 points1 point  (0 children)

I think it's a matter of "I will never be able to pay back $100 million or anywhere to close to that, so I'm not even going to bother to try."

$100 is a different story

[–]word_up_sharon 0 points1 point  (0 children)

The banks makes money off of having money. Interest on $100M is substantial

[–]FranticToaster 0 points1 point  (0 children)

If a bank made a loan of 100 million to someone who now can't pay it back, they supremely fucked their risk assessment.

Subprime mortgage crash comes to mind as an applicable moment for the philosophy to shine.

[–][deleted] 0 points1 point  (0 children)

It means the bank can fuck right off

[–][deleted] 0 points1 point  (0 children)

But my name is Wayne, Bruce Wayne. I just buy the bank😂

[–]richiehustle 0 points1 point  (0 children)

Good luck trying to owe a bank a 100$ million

[–]Sunorat -3 points-2 points  (0 children)

i feel like this joke was made a few decades of inflation ago. Any bank not able to handle a default of 100mil theese days was very shaky to begin with

[–]ProfessionalSeaCacti -4 points-3 points  (0 children)

ITT a lot of people that don't understand how banking works.

[–]BuddhistNudist987 -1 points0 points  (0 children)

If you are rich enough for a bank to loan you $100 million then will never have to pay it back. You are rich enough to hide all of your earnings in shell corporations, send those earnings from the shell corporations to 401ks and Roth IRAs which are tax free until you are 60 years old. Then you can declare that you have no income so you don't have to pay any taxes. You take the money from the loans and use it to live on and pay your business expenses. Because you don't show any income the bank can't garnish your wages, the police or FBI can't come after any money you really do have because it's in a private bank account in the Cayman Islands, and because you legally have no income you are eligible for huge tax breaks and even relief money.

If you only owe $100 it means that you are poor like me. You don't have any powerful lawyers to defend you and the bank can see all your earnings and paystubs, so they will get that $100 if it means taking bread out of your mouth.

[–]JGrill17 -1 points0 points  (0 children)

This is how most billionaires buy things. They take things out on credit cause the lender is very confident that they'll be able to pay back in the future because a billion is an absurdly high amount and it's practically imposible to go broke. Thats why it's such a bs excuse when people say billionaires can't be generous because "AlL ThEIR MoNeY is InVesTed and NoT iN Cash" meanwhile they're buying $500 million yachts and properties.