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Why banks are suddenly closing down customer accounts

nytimes.com

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Re: Why banks are suddenly closing down customer accounts

#121

Post by acdha »

dale_glass wrote: post #114
krupan wrote: post #101

Earlier quoted context omitted.

Serious question, what the are the privacy properties of cash that Bitcoin lacks? Who types destination addresses by hand? Probably the same people that expose a hoard of paper money to flames?

All Bitcoins are trackable on the blockchain, and these days you won't go far before transactions can be connected to an identifiable wallet. If you've ever said anything like "Donations accepted at $ADDRESS", then everyone can see if anyone ever sent anything, and from there it doesn't take much work to see if you ever spent that money on anything and what else you do with it. You can obscure things some, but the re…

This is also transitive: if I get bitcoin from you and two weeks from now the cops show up at my door asking to know why I had a funds related to some crime, I have to convince them that I had no knowledge of the transaction a couple of steps back and even if I do I might find that vendors stop accepting anything in that chain or start buying insurance to protect them. That’s going to sour people on the experience real quickly.

Variations of that show up everywhere: your employer can review your political donations or decide you spend too much money at the local bar, casino, or anywhere else they don’t approve of.

Re: Why banks are suddenly closing down customer accounts

#122

Post by toast0 »

patmcc wrote: post #72
slovette wrote: post #29

Earlier quoted context omitted.

Ehm. No. Innocent until proven guilty, not guilt until proven innocent. Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from… Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property. That said, t…

>>>Banks shouldn’t be allowed to ban anyone. This gets pretty tricky - telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. I think the government should provide a basic bank account to anyone who wants one though.

Postal banking could be an option, but otherwise, the federal government seems to not want to deal with the customer service involved in running a banking operation.

It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations.

Nobody would be happy, but hold all deposits for a long period, so that they fully clear. Possibly restrict the sources of funds; maybe a basic bank account can only accept payroll and government deposits, maybe a limit of N unique payers per unit time. Etc. Social security and state benefit programs have specialized accounts for people without other bank accounts, because it works better than sending checks in the mail, maybe one of those programs could be slightly more generalized.

Allow a bank to refuse to service an otherwise qualifying basic banking customer only if the bank goes through a court process and/or is accompanied by actual criminal charges filed.

Re: Why banks are suddenly closing down customer accounts

#123

Post by ForkMeOnTinder »

tuckermi wrote: post #111
votepaunchy wrote: post #80

Earlier quoted context omitted.

It depends on the kind of restaurant, but cash cannot be refused when paying a debt. https://www.federalreserve.gov/faqs/currency_12772.htm

I am unsure what distinction the linked page is trying to draw between payment for goods/services and debt. The first paragraph seems to unequivocally state that businesses do not need to accept cash (from a Federal law perspective anyway). There is no federal statute mandating that a private business, a person, or an organization must accept currency or coins as payment for goods or services. Private businesses are…

I could be wrong, but my layman interpretation is that it depends whether you pay before or after receiving goods or services.

If you pay before (ex. grocery store), they can refuse to accept certain payment methods.

If you pay after (ex. restaurant), you've already eaten the food and now you owe a debt.

Re: Why banks are suddenly closing down customer accounts

#124

Post by Beijinger »

almatabata wrote: post #34
sneak wrote: post #25

Earlier quoted context omitted.

Banking is optional; the problem is that many businesses insist on bank cards to transact. It’s important that businesses be compelled to accept cash for all transactions. It’s particularly bad in some cities. Rather than enforcing access to the special hell that is US retail banking, just prohibit businesses from ripping out their existing cash infrastructure. Even with a bank account, your ability to transact is su…

I cannot get paid by my company without a bank account. No company would pay me my salary in cash. A bank account is no longer optional if you want to live a normal life.

I vaguely remember this guy:

https://www.reviewjournal.com/news/employers-gold-silver-pay...

Re: Why banks are suddenly closing down customer accounts

#125

Post by djangpy »

kylehotchkiss wrote: post #78

Protip to anybody who wants to spend an extended amount of time overseas - you’re looking at a strong opportunity to join the list of people who have their accounts closed. Red flags include quantity of overseas debit card transactions, setting a PO Box (this one apparently is a very big red flag to banks) or a PMB as your bank address, lots of wire transfers. Open multiple bank accounts at different banks, use servi…

Staying overseas, I also got my account locked last month when I invoiced a consulting client. Seemingly out of nowhere because the previous 22 invoices cleared without an issue. But I am properly set up for this. We initiated a refund, and then I invoiced them through another EU business I set up just for this type of scenario. Then I issued a B2B invoice to my business in Europe, from my LLC in Asia; which then paid it out to me as a salary. Fees are steep, but tax is low; so that balances out.

Re: Why banks are suddenly closing down customer accounts

#126

Post by 015a »

patmcc wrote: post #72
slovette wrote: post #29

Earlier quoted context omitted.

Ehm. No. Innocent until proven guilty, not guilt until proven innocent. Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from… Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property. That said, t…

>>>Banks shouldn’t be allowed to ban anyone. This gets pretty tricky - telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. I think the government should provide a basic bank account to anyone who wants one though.

> telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh.

So, the legal system? The only reason regulated banks should be able to deplatform someone is if they also have a legally actionable case, and they do legally action it, and the person is found guilty.

Re: Why banks are suddenly closing down customer accounts

#127

Post by xrd »

RockRobotRock wrote: post #71

So many restaurants in my city are credit/debit only. That should be illegal.

I know a few coffee shops that were robbed so they stopped accepting cash. That was a much safer option for employees. But your point is still valid, there just isn't a better alternative right now, sadly.

Re: Why banks are suddenly closing down customer accounts

#128

Post by lmm »

nickff wrote: post #32
slovette wrote: post #29

Earlier quoted context omitted.

Ehm. No. Innocent until proven guilty, not guilt until proven innocent. Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from… Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property. That said, t…

The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Anti-money-laundering (AML) and so-called risk management regulations make it unprofitable and complicated to provided a mount services to many people. The government (and its regulatory bodies) use this ‘flexibility’ to achieve their…

> The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more.

Banks are creatures of government, they're never going to be private competitive businesses. The solution is to recognise this and subject them to the same oversight that government is: FOIA, the equal protection clause, all of that good stuff.

Re: Why banks are suddenly closing down customer accounts

#129

Post by 2-718-281-828 »

krupan wrote: post #109
zb3 wrote: post #90

Earlier quoted context omitted.

How can I pay my bills with bitcoin while being debanked?

Lots of discussion in the comments here about how ingrained banks are into our current system. I do honestly see Bitcoin as a way out of that, but at this early stage of it, you'd probably have to get help from someone who is not debanked in order to interact with our heavily banked system. If you are honestly interested in this, take a close look at Strike.

BTC or BCH?

Re: Why banks are suddenly closing down customer accounts

#130

Post by raincom »

creer wrote: post #107
unyttigfjelltol wrote: post #76

Earlier quoted context omitted.

The article demonstrated over and over that in some instances branch managers really did know their customers, and that knowledge was ignored by an algorithm run amuck. Monitoring transactions should not be sufficient to satisfy KYC. Perhaps this article demonstrates that the largest banks are unable to know their customers and truly act on that information. And, perhaps having those banks engage in self-destructive…

No such thing as "an algorithm run amuck" - more like "another department run amuck". Someone programmed the thing, someone is running it deliberately.

Regulators fined Chase and other big banks for "weak controls". One way to show that these big banks have "strong controls" is to change parameters for these algorithms. Many legitimate transactions fall under structuring, layering, smurfing, laundering. After all, any goal of money laundering is to make their transactions appear "legitimate". Now almost all transactions (except for big businesses and people with few bills and pay stubs) come under scrutiny.

Strong controls = more false positives, more account closures, more SAR reports. That's what regulators want, and politicians don't want to rein on these regulators either by amending laws or by reducing "too much discretion" given to regulators. Of course, those affected by debanking (ordinary citizens and small businesses) don't have that kind of lobbying power to bring any such changes.

Big businesses instead can own small banks in fly over states, and run their transactions through those banks. Maybe, it is time to bank with local credit unions, as the latter allow mobile deposits. Once FedNow takes hold across credit unions, better switch to credit unions.

Another lesson: every one should have at least three checking accounts (one or two big banks; one or two credit unions).

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