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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

#541

Post by pas »

BlueTemplar wrote: post #24
jonahbenton wrote: post #17

Earlier quoted context omitted.

It's interesting, it really isn't totalitarianism, actually the opposite, in a way that 20th C writers were simply not able to imagine. There is no centralization/dictatorial dynamic for this in the US, at all. It is all decentralized, at best these outcomes fall into the "unintended consequences of regulation" category, which is rather well studied, but in a much more simplified world model than we face today.

How is it not ? > If the bank has filed a SAR, it isn’t legally allowed to tell you, and the federal government prosecutes only a small fraction of the people whom the banks document in their SARs. Sounds worryingly similar to an effective violation of habeas corpus ? P.S.: To make the matters worse, it looks that trying to rely more on cash as an insurance against getting debanked, raises your risk of getting debank…

that's not totalitarianism. it's a shitty system with a ridiculously bad trade off (catching some money launderers versus fucking innocent customers)

the problem is that banks can't handle this requirement well. if they think something is suspicious, sure file the SAR/CTR, and then if they think there's a need for KYC, tell the customer that. the customer provides information about the transaction, the bank then can chill the fuck out. if this keeps going on they can eventually tell the customer that okay, it's too much work for them, please close the account in 1 month.

but no, they immediately switch into this crusader mode, because it's just easier for them, and customers have no recourse.

Re: Why banks are suddenly closing down customer accounts

#542

Post by creer »

YawningAngel wrote: post #535
creer wrote: post #533

Earlier quoted context omitted.

Isn't this where documentation of actual KYC would come in? "Flagged for reason X; Overridden by local manager - follows 10 lines of CYA justification"? Normally that's good enough for administrations. The second time it's flagged for reason X+1, include 10 lines from rank 2 manager.

That probably would be acceptable but it's not clear it is worth the bank's while to do that

It seemed in these reports that the local manager was surprised. ... But it may be that they were only "suprised", i.e. not about to say that the system did prompt them but they ignored the prompt. Possible. It is also possible that the bank only prompts the local manager if the client has enough estimated net worth or estimated lifetime client business value. The kind of thing that might make sense but wouldn't be disclosed until there is a lawsuit.

Re: Why banks are suddenly closing down customer accounts

#543

Post by michaelt »

KRAKRISMOTT wrote: post #477
gnicholas wrote: post #411

Earlier quoted context omitted.

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/digit…

> 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.

"Expats" is also used for elderly retirees moving to the Costa Del Sol, so IME it's not a particularly high-income or white-collar term.

Now, if you were talking about "non-doms" that would be a different matter :)

Of course, I agree that a bank accustomed to dealing with expatriates would probably be understanding of someone spending a lot of time in another country.

Re: Why banks are suddenly closing down customer accounts

#544

Post by mcny »

trompetenaccoun wrote: post #523
ArabicBaklava wrote: post #494

Earlier quoted context omitted.

Well, this happened in 2017.. fast forward to this account closure effect on my life: I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad…

Horrible. I've heard similar stories but this one's the worst by far. This shouldn't be allowed to ever happen again, such sudden closures without warning need to be illegal. The issue is banking is highly regulated but a lot of the regulation is about AML, terrorism screening and such. Not actually protecting customers from abuse but rather the other way around - banks are taking precautions to protect themselves fr…

> There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance.

I want the pendulum to swing the other way. Everybody gets and gets to keep forever an account at the Reserve Bank.

> self-hosted Ethereum wallet

I'm sorry. The technology might be fine But I simply do not trust the people involved with cryptocurrency. Not just the scammers such as SBF, I don't trust the "victims" to make wise choices. They see this as a get rich quick scheme. They are not "victims". They are money hungry speculators. Most don't even host a full node. Even people who have a means to do so Such as this guy tech deals on YouTube. The miners want to turn a good profit when they should be happy to just break even. The transaction costs are still too high. It should be very close to if not exactly zero dollars. The block chain should not be a place to make huge profits. The prices should not go "to the moon". In fact, you shouldn't even be thinking of the price of your cryptocurrency with respect to the US Dollar. This already means we lose if we constantly compare Bitcoin oh sorry ethereum and the dollar.

Re: Why banks are suddenly closing down customer accounts

#545

Post by mcny »

neonsunset wrote: post #518
ArabicBaklava wrote: post #494

Earlier quoted context omitted.

Well, this happened in 2017.. fast forward to this account closure effect on my life: I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad…

I wonder if the bank can be sued for this. That's how random bank managers get found in a river, due to policies like these impacting the innocent.

I got a random call from Wells Fargo fraud department and I refused to give them my information. Escalated and the supervisor also pretended to not understand my concern. In fact, they placed a stupid hold. I went to a bank and the bank manager has to call them back and basically beg these people to remove my holds.

These people in the fraud department don't even deserve to get found in a river.

Re: Why banks are suddenly closing down customer accounts

#546

Post by robertlagrant »

trompetenaccoun wrote: post #523
ArabicBaklava wrote: post #494

Earlier quoted context omitted.

Well, this happened in 2017.. fast forward to this account closure effect on my life: I had to go back to my country, without a degree, was not able to land any job. Unfortunately, good places require degrees. Stayed unemployed, hit with chronic depression as anyone would. Lost 4+ years of professional progress. When covid came, i was able to complete my degree online and graduated in 2021, but because all fresh grad…

Horrible. I've heard similar stories but this one's the worst by far. This shouldn't be allowed to ever happen again, such sudden closures without warning need to be illegal. The issue is banking is highly regulated but a lot of the regulation is about AML, terrorism screening and such. Not actually protecting customers from abuse but rather the other way around - banks are taking precautions to protect themselves fr…

> There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance

Carrying some emergency cash is also a solution for this sort of thing.

Re: Why banks are suddenly closing down customer accounts

#547

Post by mandmandam »

jopsen wrote: post #382
xbmcuser wrote: post #311

Its funny how people made a big hoopla about chinese system of black marking individuals to me this seems to be the same. And from the looks of it in China at least prosecutes you or you know why you have the black mark. In the US you get black mark then are not even told why so not even sure what you did wrong just like the US no fly list. The land of the free.

These things simply don't compare. Any such attempt smells like trolling to me. System that are shitty by accident, do not compare to intentional evil.

> System that are shitty by accident

US banks aren't shitty by accident - how could anyone say such a thing. They deleted millions of mandatory records. They manipulate markets. They fund illegal wars, and people like Epstein. They support dictators and tax dodgers. And that's all just JPM! Look at what GMS have done; look at the Panama papers, look at the 08 bailouts.

Giving banks the benefit of the doubt requires extraordinary, profound naivety.

Re: Why banks are suddenly closing down customer accounts

#548

Post by AnonCoward42 »

I feel like this is the modern version of excommunication. Bank accounts are essential to life in modern societies and if you have none, you are in serious trouble. If there are suspicious activities these should be investigated instead of just closing the account.

Re: Why banks are suddenly closing down customer accounts

#549

Post by Spare_account »

>Mr. Dubrowski, the JPMorgan Chase spokesman, said the bar’s series of deposits was indeed the problem.

>“We must know our customers and monitor the transactions that flow through our bank,” he said. “That includes instances where we see a pattern of cash deposits that are just below federal currency reporting thresholds.”

Later in the article:

>“We must know our customers and monitor the transactions that flow through our bank,” Mr. Dubrowski said, who stressed that the bank was not accusing Mr. Ladipo of any wrongdoing. “That includes instances where we suspect that the transactions involve parties connected to potential scams.”

Is Mr Dubrowski an AI by any chance?

Re: Why banks are suddenly closing down customer accounts

#550

Post by Ridj48dhsnsh »

pas wrote: post #536
Ridj48dhsnsh wrote: post #483

Earlier quoted context omitted.

Is it by accident though? Aren't US regulators intentionally (but quietly) pressuring financial institutions to do the enforcement of policies that they know wouldn't stand up to public scrutiny?

look, US politics is a shitshow, regulators are beholden to politics, lobbying is a very big influence in the US. from the crazy anti-porn, anti-abortion, anti-gay/trans, anti-welfare xenophobic fundamentalist anti-anything lobby to the anti-gun, super-duper-pro-trans, militantly-feminist, pro-eat-the-rich lobby. and during all this banking in the US suffers from all the usual problems, it's 50+ regulatory regimes al…

Are things like Operation Chokepoint [1] still a conspiracy theory?

It appears to me like a sophisticated and coordinated operation, not the accidental result of bureaucracy.

[1] https://en.m.wikipedia.org/wiki/Operation_Choke_Point

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