What Happens When Your Bank Isn't a Bank and Your Money Disappears?
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Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#2And it's gone!
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#3I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank.
Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, so if Mercury keels over I'll have trouble getting my money?
* I used SVB for 25 years, but over the past few years their service declined and First Republic poached a lot of their good guys, so I switched to FRB. With a track record like that, perhaps Mercury should reject me?
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#4I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, s…
I wondered about this also. Seems like the virtualization that allows for spreading risk also introduces opacity, and risks of its own.
In another article currently being discussed, [1] Mercury has said they may be affected by a breach at Evolve. Yikes.
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#5Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#6In a properly regulated world, all of these clowns would be shut down today and some of them would go to jail.
Instead we do no regulation, these "not-banks lying and claiming your money is safe" get to harm a lot of people, and the public further loses trust in everyone involved.
To anyone reading this who has money in any business that claims not to be a bank but instead your money is super-safely stored in a real bank somewhere and so there's no risk to you: run away, run away fast. Get your money out and close your account. You're in a Ponzi scheme and you don't realize it.
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#7I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, s…
"Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust ®; Members FDIC. Deposit insurance covers the failure of an insured bank." - from their website
What they're trying to say here is YOU ARE NOT INSURED IN ANY WAY IF MERCURY STEALS YOUR MONEY.
I hope this makes it more clear to you.
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#8I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, s…
"Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust ®; Members FDIC. Deposit insurance covers the failure of an insured bank." - from their website What they're trying to say here is YOU ARE NOT INSURED IN ANY WAY IF MERCURY STEALS YOUR MONEY. I hope this makes it more clear to you.
But if the money is deposited in an FDIC-insured account and is stolen (by an external hacker or Mercury) isn't it insured against that loss?
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#9Earlier quoted context omitted.
"Mercury is a fintech company, not an FDIC-insured bank. Banking services provided by Choice Financial Group and Evolve Bank & Trust ®; Members FDIC. Deposit insurance covers the failure of an insured bank." - from their website What they're trying to say here is YOU ARE NOT INSURED IN ANY WAY IF MERCURY STEALS YOUR MONEY. I hope this makes it more clear to you.
But if the money is deposited in an FDIC-insured account and is stolen (by an external hacker or Mercury) isn't it insured against that loss?
No. The depositor has a relationship with Mercury. Mercury has relationships (directly or indirectly) with FDIC insured banks.
Even if one could prove a direct link between the depositor and the FDIC insured bank (making the insurance relevant), the depositor has given Mercury the right to move money in and out of the FDIC insured accounts.
Even if one could prove the money was illegally taken, FDIC insurance is for bank failure. Not for theft.
Re: What Happens When Your Bank Isn't a Bank and Your Money Disappears?
#10I'm considering using Mercury,* which is allegedly quite popular with startups. They do have all the usual KYC etc of a bank. Like the ones discussed in the article, Mercury also keeps customer funds in Evolve, among other banks (I guess they claim to spread your money around so you don't have more thank 250K in any one basket). So if I understand correctly, the problem is that I have no visibility to the back end, s…
Have you considered JPMC?
FRB's tech portfolio and team is now part of them, and a number of SVB accounts ik of move there as well.