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Cautionary tale on using Chase bank for indie business

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Re: Cautionary tale on using Chase bank for indie business

#261

Post by throwaway2037 »

tadfisher wrote: post #213
pdonis wrote: post #199

Earlier quoted context omitted.

> the Bank may close your Accounts at any time...the Account Rules do not require the Bank to provide you with advance notice of the termination of the Accounts I assume most of the big banks probably have similar language, which would be a huge red flag to me for a small business account. But what about banks like Mercury Bank, mentioned in the article as being more supportive of small businesses? Do their terms of…

https://en.wikipedia.org/wiki/Bank_Secrecy_Act "A financial institution is not allowed to inform a business or consumer that a SAR is being filed, and all the reports mandated by the BSA are exempt from disclosure under the Freedom of Information Act." (not speaking on behalf of my employer)

Note: SAR = Suspicious Activity Reports

Roughly, if you deposit more than 10K USD in cash, they will need to file this form with the OCC. And, a bunch of other activities qualify. There is no guarantee that this will result in account closure, not does it directly indicate illegal activity. This seems to be a myth online. In the industry, the SAR is regarded as a "get of jail free card" for poorly staffed compliance departments. "When in doubt, file a SAR!", then the bank cannot be so easily sanctioned for allowing illicit activities.

Re: Cautionary tale on using Chase bank for indie business

#262

Post by throwaway2037 »

benzible wrote: post #145
mijoharas wrote: post #127

Earlier quoted context omitted.

> I've opened another business account and a personal travel credit card with Chase Out of interest, why would you do that after your previous experience with them?

The Chase Sapphire card was rated as the best travel card. I had no idea that I had been flagged personally at the time I applied. I can't remember why I chose them for a business account. At the time I was working under the assumption that this was a "lightning strike" type of event which could have happened with any bank. I'm more inclined to believe it's Chase-specific now, or at least more likely with Chase, esp.…

For all of the complaining about banking majors in the US here on HN, why don't more people bank _intentionally_ with credit unions, or at least local banks? When you open your account, make sure that the branch manager knows who you are and what your pattern of business will be. Open your account wearing good clothes (suit, if possible), and share a business card with your account rep and branch manager. Think old school, like it is the 1950s, and it will be much harder for them to terminate your accounts.

Re: Cautionary tale on using Chase bank for indie business

#263

Post by developerDan »

throwaway2037 wrote: post #260
benzible wrote: post #9

About 10 years ago a startup I co-founded had about $3M in a Chase account. We received a notification that they were closing our account within 30 days. We weren't able to get any information but I assume this was a KYC false positive. The only thing I can think of is that we had some investors from the Middle East. We had no problem withdrawing our funds but since then, I've opened another business account and a pe…

> I've opened another business account and a personal travel credit card with Chase, both of which were shut down within weeks This pattern repeats itself frequently here on HN. My questions / advice are always the same. Did you send written letters to Chase to ask for an explanation? In parallel, CC the same letter (yeah, by snail mail, and tell Chase you are doing it) to your local and national banking regulators.…

In regards to your question -

Credit cards typically come in two flavors: cash back and travel. Cash back is self explanatory, travel cards reward points instead (cash equivalent of 1 point is $0.01 at least for the US). These points can be transferred to other accounts to take advantage of things like reward seats on airlines.

Re: Cautionary tale on using Chase bank for indie business

#264

Post by developerDan »

throwaway2037 wrote: post #262
benzible wrote: post #145

Earlier quoted context omitted.

The Chase Sapphire card was rated as the best travel card. I had no idea that I had been flagged personally at the time I applied. I can't remember why I chose them for a business account. At the time I was working under the assumption that this was a "lightning strike" type of event which could have happened with any bank. I'm more inclined to believe it's Chase-specific now, or at least more likely with Chase, esp.…

For all of the complaining about banking majors in the US here on HN, why don't more people bank _intentionally_ with credit unions, or at least local banks? When you open your account, make sure that the branch manager knows who you are and what your pattern of business will be. Open your account wearing good clothes (suit, if possible), and share a business card with your account rep and branch manager. Think old s…

> why don't more people bank _intentionally_ with credit unions, or at least local banks

Simply put, national access to those banks. Traveling business owners who deal with cash will have access to physical banking locations all over the country. You cannot deposit cash in San Francisco for a bank that is local to only NYC.

Re: Cautionary tale on using Chase bank for indie business

#265

Post by benzible »

throwaway2037 wrote: post #260
benzible wrote: post #9

About 10 years ago a startup I co-founded had about $3M in a Chase account. We received a notification that they were closing our account within 30 days. We weren't able to get any information but I assume this was a KYC false positive. The only thing I can think of is that we had some investors from the Middle East. We had no problem withdrawing our funds but since then, I've opened another business account and a pe…

> I've opened another business account and a personal travel credit card with Chase, both of which were shut down within weeks This pattern repeats itself frequently here on HN. My questions / advice are always the same. Did you send written letters to Chase to ask for an explanation? In parallel, CC the same letter (yeah, by snail mail, and tell Chase you are doing it) to your local and national banking regulators.…

> I cannot believe you will get zero response.

Believe it. Our account seems to have been closed due to a KYC issue, and the bank, by law, cannot tell you any details. See this comment: https://news.ycombinator.com/item?id=41333832

And, yes: we tried every avenue to get more information, including having an attorney write a letter. As you can imagine, this was quite concerning for our company. We wanted to understand if there was some piece of information that might lead other banks to close our account. As I mentioned in another comment, none of our other accounts were closed - only this Chase account.

I tried again to get more information when the Chase accounts I opened, for another business and subsequently a personal credit card, were closed, although by that point, the only logical explanation was my connection to the business bank account that had previously been closed and I didn't have much hope that I'd get an answer.

Also: to be blunt I'm not sure what gave you the impression that I'm looking for advice. I was relating an old anecdote that was relevant to the OP, not asking for help. I just stay away from Chase. At this point I know that I'm blacklisted with them. I have no issue with other banks.

> What exactly is a "personal travel credit card"? I never heard that term before.

"Personal" as in: this was a credit card for me personally, not a business credit card. My point is that I seem to be blacklisted by Chase even for _personal_ accounts unconnected to the business whose account the closed. I assume you've heard of a "travel credit card", but if not: https://www.nerdwallet.com/best/credit-cards/travel

Re: Cautionary tale on using Chase bank for indie business

#266

Post by Algemarin »

mistercheph wrote: post #187
Algemarin wrote: post #172

Reading anecdotes like this is just so terrifying, and there appears to be absolutely no recourse. These stories can, and do, happen to anyone at any bank. And what can we do about it? It seems like the answer is a glib 'nothing'.

These days, its best to always travel with a retained team of attorneys, ready to intimidate and threaten litigation against anyone that tries to treat you like a kafka protagonist.

I just feel like the bank has infinitely more resources than I could ever have in terms of hiring more attorney-power.

Re: Cautionary tale on using Chase bank for indie business

#267

Post by mharig »

77pt77 wrote: post #160

Always have your money split between multiple unrelated banks in different jusrisdictions. Always have multiple debit and credit cards between different institutions. If possible avoid the USA banking system, although thats easier said than done if you live there. These are good practices for both professional, company and personal finances.

[dead]

Re: Cautionary tale on using Chase bank for indie business

#268

Post by closeparen »

heavenlyblue wrote: post #258
closeparen wrote: post #210

Earlier quoted context omitted.

If a bank suspects you of money laundering, they cannot discuss it with you. A bank employee could go to federal prison just for leaking the existence of a suspicious activity report (SAR).

But this is bullshit though? if they indeed didn't want you to know of the SAR they would have not closed the account and let you build more of a case to arrest you

Most SARs are innocuous, the feds aren’t going to run a sting operation every time someone is a little too suspicious for a compliance department to touch.

> In the U.S., SARs gather up in piles at the Financial Crimes Enforcement Network (FinCEN). Most are write-once read-never. The dominant way they are actually used is that, when someone comes under criminal suspicion for other reasons, law enforcement runs their name through FinCEN. That will, some of the time, turn up sufficient threads about their money laundering to allow investigators to send letters to the relevant financial institutions to get full account histories.

https://www.bitsaboutmoney.com/archive/money-laundering-and-...

Re: Cautionary tale on using Chase bank for indie business

#269

Post by lisper »

throw101010 wrote: post #257
lisper wrote: post #250

Earlier quoted context omitted.

> having access to the source code of your wallet, and being able to verify the data of Bitcoin's public and open blockchain is obviously much better than blindly trusting your bank and getting cut off from your assets at any point through NO fault of your own. Maybe for you. Not for everyone. The vast majority of people don't have the technical chops to audit a code base. They have to trust someone else to do it for…

> Maybe for you. Not for everyone. Hence why everything tends to be public and open source for Bitcoin, so anyone who is conscientious and capable *can* do this. Trustlessness is a scale, not a binary. It just so happens that in traditional banking you start at the very bottom of the scale and you pretty much stay there. With Bitcoin you get about as high as you can get on this scale for a form of money. > That's a s…

> anyone who is conscientious and capable can do this

Anyone who is conscientious and capable can navigate the traditional banking system too. In fact, that's pretty much what "capable" means.

> in traditional banking you start at the very bottom of the scale and you pretty much stay there

You don't have to any more than you have to with bitcoin. You can even start your own bank, and then you can keep your deposits there and you will have a 100% guarantee that your bank will not screw you. It's not easy, but neither is writing your own bitcoin client from scratch.

A very plausible route to that kind of security is joining the board of a credit union.

> As much as they learn about the meanders of the traditional banking system, it still won't make them more in control of their assets

That's not true. The more you learn about how the system works the more in control you can become. It is exactly the same in both cases. The only real difference is:

> almost constant expanding supply

That is a real difference between fiat and bitcoin (though not crypto in general). But that has nothing to do with control, and it has nothing to do with crypto, it has to do with policy. It's easy to make an inflating crypto currency. You could even fork an inflating bitcoin. You could likewise make a non-inflating fiat currency, e.g. the U.S. dollar during the Great Depression. But there is a reason this isn't done very much -- it's because a return to the Great Depression is not generally considered something to aspire to.

Re: Cautionary tale on using Chase bank for indie business

#270

Post by cultofmetatron »

rglover wrote: post #142
cultofmetatron wrote: post #138

Earlier quoted context omitted.

solana seems t be even better for that tech wise. but yea, bitcoin is incumbant here

Solana is centralized. The network should never go offline/have outages or be vulnerable to bad actors. At best, Bitcoin has the 51% attack problem which would require insane resources and convincing node operators to follow a fork of the network.

> Solana is centralized.

The Solana website itself says its decentralized on the frontpage.

from what I can see, the main difference is that solana is proof of steak the way etheream is going. while there is certainly a place for bitcoin's pow consensus, the electricity costs alone preclude it from being a serious contender to visa.

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