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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

#471

Post by astrange »

krupan wrote: post #391
astrange wrote: post #359

Earlier quoted context omitted.

"Addresses" are personally identifiable information if you're associated with one, or if you use an exchange, which you'd want to because most people providing goods and services (and also your local tax authority) want the local currency. If you're claiming these upgrades made Bitcoin anonymous in 2021, that's obviously not true, since multiple people who stole billions of dollars of bitcoins from exchanges have bee…

From the linked article, "James Zhong committed wire fraud over a decade ago" He definitely wasn't using Schnorr signatures 10 years ago.

He was caught based on recent transactions.

Re: Why banks are suddenly closing down customer accounts

#472

Post by peterlk »

advael wrote: post #162

I'm somewhat surprised no one here views this as an automated decisionmaking problem It's increasingly clear that automating important decisions like this is causing a lot of harm while removing most forms of recourse available to those affected. Coupled with the way automated decisions are used to perform and then launder fraud on a massive scale, maybe we should target laws at the automation itself: Require decisio…

Sounds like a kind of software engineering license. If you have one, you can make big money, but you’re also on the hook for failures. Really increases the incentive to not fuck up these systems. If there was a business decision that caused this, it is up to the engineer(ing team) to be able to audit the system and directly point blame; otherwise, they are liable

Re: Why banks are suddenly closing down customer accounts

#473

Post by patmcc »

quickthrower2 wrote: post #360
patmcc wrote: post #172

Earlier quoted context omitted.

Ok; can we do the same to your industry? Would you enjoy being required to serve incredibly unprofitable customers until you can (very expensively!) take them to court? If being banked is so critical (and it is, in modern society) then it shouldn't be handled solely by private enterprise. Government needs to step in and offer basic services.

Banks are a special case. If you are going to apply the “they are just a regular business like my local bar” to them by logical extension any business should be able to create new money and transmit it. Nothing special eh! Banks have special rules because they are infrastructure. A cafe needs a bank but not vice versa.

I agree, banks should have rules and regulations specific to their industry, just like cafes should industry-specific rules (food handling, tip distribution, etc.).

I don't think "you can't fire a customer" is a good one though.

There's also a distinction between not being able to use a particular bank and not being able to use any bank. It's important that everyone be able to use some bank, but not that everyone can use Chase, but it's tough to regulate that. Again, this is why I see a government option as necessary.

Re: Why banks are suddenly closing down customer accounts

#474

Post by patmcc »

BirAdam wrote: post #262
patmcc wrote: post #72

Earlier quoted context omitted.

>>>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.

In the USA, all of the large banks are part of the Federal Reserve System and the FFIC insures all accounts up to a certain amount. I would say this nullifies their claim to refuse the public as a largely publicly funded institution… the government, however, doesn’t care about the hoi polloi so this situation isn’t likely to ever change.

The FDIC isn't publicly funded, it's funded by premiums paid by the banks themselves (and the customers thereof, of course).

Re: Why banks are suddenly closing down customer accounts

#475

Post by staunton »

zlg_codes wrote: post #433
raincom wrote: post #130

Earlier quoted context omitted.

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…

Wrt keeping multiple accounts, what is the benefit of that compared to the overhead of monitoring and managing them? Is it just a contingency? Banks in particular have no real reason to give you your money back or respect your privacy. Why would I put my money in an institution that I can't trust?

In this context, the implied reason is that your still have a bank account if one of the banks decides to close or freeze your account. If you can do without an account altogether (how??), good for you, I guess.

Re: Why banks are suddenly closing down customer accounts

#476

Post by Sylamore »

bandrami wrote: post #407
Sylamore wrote: post #185

Earlier quoted context omitted.

I don't have Cash App, Venmo, Zello or any of those other micro payment apps because every single time that I sign up for one, I get automatically blocked on my 1st transaction. Zello is even offered directly by my bank so it's automatically linked to my banking info. Calling customer service leads nowhere. It all works out for me in the end because if I can't Apple Pay or Paypal someone I probably don't need their p…

OTOH Paypal is an absolute crapshoot. Something like fifteen years ago they just decided I shouldn't be able to use Paypal anymore. No indication of why. It took them six months to cut me a hard check for the $100 I had in my account at the time. Complete BS system.

Yeah, how they can claim to "not be a bank" bu act like one all day long baffles me.

Re: Why banks are suddenly closing down customer accounts

#477

Post by KRAKRISMOTT »

gnicholas wrote: post #411
KRAKRISMOTT wrote: post #403

Earlier quoted context omitted.

$75K/$5K per month is a very low threshold for private banking, other banks usually require somewhere in the three digits range.

What's the additional value beyond what you'd get with a standard checking account? As GP said, this is like pseudo-private banking. [1] 1: https://www.us.hsbc.com/checking-accounts/products/premier/

You get priority support for telephone banking and you get a dedicated account manager (not sure if it's a fully accredited banker). You are automatically classified as one of the highest tiered customers for them and can get preferred rates etc. on many other services. Aside from HNW individuals, they also traditionally cater to "expats", which is a fancy British word for high income white collar professionals/digital nomads who either travel frequently or have foreign residencies for business. Your Premier status is global; you can easily create accounts at overseas branches with the same Premier privileges and (possibly credit history transfer too) and fund transfers between accounts are free, though I believe their conversion rates are not necessarily as competitive as a proper brokerage like Interactive Brokers. HSBC's premier service has been around long before the likes of Transferwise.

HSBC operates a bit like a franchise, each country's branch has to abide by domestic regulations but internally customers with Premier status are basically VIPs and get expedited during account opening at overseas branches. If I remember correctly, they generally take into account all of your assets with the bank including e.g. loans and mortgages etc. when banking. They don't only look at your cash assets when conferring Premier status. So if you have a house or car loan with them you can easily attain Premier.

Re: Why banks are suddenly closing down customer accounts

#478

Post by Ridj48dhsnsh »

thsksbd wrote: post #374
Ridj48dhsnsh wrote: post #270

Earlier quoted context omitted.

It's not that simple. There are a lot more details, but at a minimum you will still need to pay US taxes to the extent that the foreign government taxes at a lower rate. You'll also often still need to pay state income taxes.

That brings up very interesting questions: To which state would one owe taxes to since you're no linger a resident? Similarly, Americans abroad vote, but ppl in DC (not a state) cant? Can I avoid state taxes by sojourning in DC before moving abroad?

The answer depends on how your specific state defines tax residency (for example California is notoriously difficult to escape).

Generally the rules will be something like you remain a tax resident of your old state, regardless of how long you stay abroad, until you establish a new permanent tax residency (whether in a new state or country).

What I eventually did is return to the US, sign a 1 month lease in Florida so I could get a drivers license and register to vote, and then return abroad. According to my tax accountant, that was enough.

Re: Why banks are suddenly closing down customer accounts

#479

Post by eswat »

zlg_codes wrote: post #448
zdragnar wrote: post #169

Earlier quoted context omitted.

If you're still an American citizen, don't you technically still owe US to taxes on that "salary"? And since you're paying it as salary, I'm not sure that you're able to deduct any of the fees as expenses from what's owed.

Why is America the only country that taxes people who have citizenship but aren't residents? The only one, guys.

Also Eritrea… uh but only at 2%.

Re: Why banks are suddenly closing down customer accounts

#480

Post by bostik »

xioxox wrote: post #465
maccard wrote: post #373

Earlier quoted context omitted.

> At least in the UK, NatWest debanked Neil Farage's account for his political views. Even its CEO resigned over her lying. No, a subsidiary of NatWest closed Farage's account when he no longer met the investment thresholds for the account he held. The CEO resigned for telling a journalist the above. That's not the same thing, at all.

No fan of Farage, but then why was most of the document the bank produced about what he did as a politician? Farage also claims he never met these supposed thresholds.

Combination of reputational damage[0] and him being a PEP.

I believe the account closure was a business decision, but they definitely had no reason to be public about it. One good thing came out of the debacle, though: it put the spotlight on UK retail banking regulations and how they are allowed to treat customers in the first place.

Financial institutions don't like small-time PEPs. They don't net the banks anywhere near the money dictators and kleptocrats do, but are just as likely to engage in ongoing bribery due to their position in society.

0: Farage had apparently been very vocal about having an account with Coutts, and waving that thing around as a sign of ... something. For the bank, that was negative brand value.

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