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SVB customers who lost their deposits remain on the hook for loans

wsj.com

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Re: SVB customers who lost their deposits remain on the hook for loans

#61

Post by skyyler »

sokoloff wrote: post #53
toast0 wrote: post #31

Earlier quoted context omitted.

No, but it's not unsual to be able to offset deposits and loans. If you owe me $X and I owe you $Y, and you won't give me my $X back, why should I pay more than $Y - $X on the loan? Edit: see this from the FDIC, which suggests this would be an option for depositors https://www.fdic.gov/consumers/banking/facts/borrowers.html

The first thing I’d think to do is write a check to cover the loan drawn on my SVB deposit. Let them explain why they bounced that check and we can take it to court.

Isn't writing a check you know will bounce a crime?

Re: SVB customers who lost their deposits remain on the hook for loans

#62

Post by jrflowers »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

Cayman is factually a place that is very commonly regarded as a tax haven.

You appear to think that that near-ubiquitous reputation is because of some sort of misunderstanding?

Can you explain why you think the Cayman Islands does have that reputation? Is it the result of some sort of conspiracy? Angry people weaving tales to assail the reputation of the citizens of Cayman?

Re: SVB customers who lost their deposits remain on the hook for loans

#63

Post by 2OEH8eoCRo0 »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

https://en.wikipedia.org/wiki/Cayman_Islands

> The nation's low tax rates have led to it being used as a tax haven for corporations; there are 100,000 companies registered in the Cayman Islands, more than the population itself. The Cayman Islands have come under criticism for allegations of money laundering and other financial crimes, including a 2016 statement by former US president Barack Obama that described a particular building which was the registered address of over 12,000 corporations as a "tax scam".

Re: SVB customers who lost their deposits remain on the hook for loans

#64

Post by s1artibartfast »

mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

I think it's actually more nuanced than you're making out to be.

If a customer has both a bank loan and a bank account, I think it is reasonable that the customer received some of the proceeds when their loan is sold off.

Re: SVB customers who lost their deposits remain on the hook for loans

#65

Post by sokoloff »

skyyler wrote: post #61
sokoloff wrote: post #53

Earlier quoted context omitted.

The first thing I’d think to do is write a check to cover the loan drawn on my SVB deposit. Let them explain why they bounced that check and we can take it to court.

Isn't writing a check you know will bounce a crime?

How do I know it will bounce? Last I looked, the funds were there. I’ve been busy…

If it turns out to be a crime, I think I’ll take my chances with a jury trial where all have to agree to convict.

Re: SVB customers who lost their deposits remain on the hook for loans

#66

Post by fakedang »

paulddraper wrote: post #57
DelaneyM wrote: post #51

Earlier quoted context omitted.

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

I don't know what to tell you; the Cayman Islands for years has been ranked top of the list of tax havens and money laundering locations for years and years. Those are just facts. https://www.republicworld.com/world-news/rest-of-the-world-n...

You both are right though. Cayman Islands is actually a trusted jurisdiction for parking cash for companies, part of the reason why a lot of hedge funds are based out of it. Same for BVI, the Channel Islands, etc. Those are jurisdictions enabled by US' own laws to park American money - they fully comply with American rules and if the rich are allowed to park their money, it's because US Law lets them to do so.

Now if someone or some corporation's hiding money in Dubai, Cyprus or Liechtenstein or one of those dozens of other dodgy tax havens, then you can bet your ass there's something shady behind the scenes. My neighbor for a while in Dubai was a wanted criminal in the UK.

Re: SVB customers who lost their deposits remain on the hook for loans

#67

Post by greenthrow »

s1artibartfast wrote: post #64
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

I think it's actually more nuanced than you're making out to be. If a customer has both a bank loan and a bank account, I think it is reasonable that the customer received some of the proceeds when their loan is sold off.

That is not how it ever works. When my mortgage was sold by the original bank I didn't get anything.

Re: SVB customers who lost their deposits remain on the hook for loans

#68

Post by [deleted] »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

[deleted]

Re: SVB customers who lost their deposits remain on the hook for loans

#70

Post by causality0 »

DelaneyM wrote: post #51
mdasen wrote: post #14

This article feels like rich people who were trying to get around US law/regulations/taxes now wanting the protections afforded by it. They deposited money in SVB's Cayman Islands subsidiary (a country that's a well-known tax haven). SVB goes under and the Cayman Islands have no deposit insurance so their deposits are wiped out. Now they want their money back or their debt forgiven. The SVB Cayman deposits didn't pay…

As a Caymanian I’m doing to take exception to your non-sequitur about Cayman being a “well-known tax haven”. Cayman is one of the most financially transparent, if not _the_ most financially transparent, location in the world. We fully comply with FATCA, CRS, and AEOI, to the extent that it takes even a native Caymanian multiple weeks to open a local bank account. The reason most foreign investors use Caymanian interm…

"Tax haven" does not mean illegal. The Cayman Islands are a well-known tax haven, just like Ireland, Singapore, and Jersey. It's top of the list when you Google "tax haven". It's number 2 on both the Hines and Zucman lists of tax havens and number 3 on the ITEP list. The Cayman Islands are also on the EU's Anti-Money Laundering blacklist for failure to prosecute money laundering cases.
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