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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

#871

Post by raincom »

elzbardico wrote: post #840
raincom wrote: post #796

Earlier quoted context omitted.

Two things: (a) Banks can be vague in their SAR filings with “transaction with no apparent economic, business or lawful purpose” (b) What BSA manul says: "No bank, and no director, officer, employee, or agent of a bank that reports a suspicious transaction may notify any person involved in the transaction that the transaction has been reported." [1] This deadly combination is enough for banks to NOT disclose. That's…

The manual says that customer should not be informed for the reasons of reporting. But it doesn't say the banks should close the accounts.

Since the first SAR is filled with “transaction with no apparent economic, business or lawful purpose”, subsequent transactions from the same account would become "transactions with no apparent economic, business or lawful purpose". So, Banks are on the hook to file subsequent SARs. Banks exit customers after a couple of SARs in the name of de-risking.

One way to avoid getting out of this trap is to join the club of "private banking" services provided by big banks. It is like Airline's first class vs. economy class customers. Banks put different resources for private banking clients such as: (a) manual override by humans (b) reduce false positives by algorithms by tweaking parameters (c) specialized representatives, cust service folks.

Re: Why banks are suddenly closing down customer accounts

#872

Post by TwoHeadedBeast »

nly wrote: post #676
ArabicBaklava wrote: post #481

Bank of america did this to me, in the same weekend i was moving out. All my stuff was in the car, it was a friday at 3PM and i was in the gas station. I couldn't fill up my gas. Called and they told me to come to the bank with two forms of ID. When I arrived to the bank the fraud department was operating in NY (3hrs ahead) and they were closing, so they told me to come next tuesday (it was a long weekend). I went ho…

This is why you should always have more than 1 bank account and credit card.

And with different banks.

Re: Why banks are suddenly closing down customer accounts

#873

Post by eru »

BobaFloutist wrote: post #863
eru wrote: post #516

Earlier quoted context omitted.

> Especially as there is no gold standard so you would presumably back these by some asset for example this note is worth 1% of our fleet cars or something. I would expect private issuers in eg the US to denominate their notes in USD. Or if USD were to abolished tomorrow, they would probably denominate in Euro. Failing that, I would expect a return to denomination in gold before denomination in car fleets. Backing is…

I mean that sounds like stocks, which do exist, and people do use to pay other people.

No.

Stocks are (in practice, effectively) denominated as fractions of company.

What I am describing is closer to bonds. They are denominated in currency, but still backed by the value of the company.

Bonds (or something equivalent to bonds) are used all the time to pay people. Eg someone who gets paid at the end of the month accrues something like a bond throughout the month. The company owes her more and more of something denominated in currency, not in stocks. At the end of the month, the company redeems that IOU by transferring currency.

Paying people in stocks is much rarer.

Importantly, the base pay of most people from one month to the next is fixed in terms of currency, not in terms of a specific number of stocks.

Re: Why banks are suddenly closing down customer accounts

#874

Post by x-complexity »

FireBeyond wrote: post #331
x-complexity wrote: post #230

Earlier quoted context omitted.

> How can I pay my bills with bitcoin while being debanked? Acting as an alternative to krupan's Bitcoin-centric answer: - There are other crypto rails other than Bitcoin that could be used in its place. USDC & stablecoins in general is going to be the medium-term winners in this space, as more services are set up to help people pay their bills with stablecoins. Here are 2 services that I've found within a few minute…

From just one of those L2 networks: > Optimism is an EVM-equivalent Optimistic Rollup chain. I’ll be right back, I need to explain this one to grandma.

> > Optimism is an EVM-equivalent Optimistic Rollup chain.

> I’ll be right back, I need to explain this one to grandma.

Term by term:

- EVM-equivalent: The Ethereum Virtual Machine (EVM) is the part that allows smart contract code can be run on the network. EVM-equivalency means that you can just drop in your smart contract code, and it has to run as it would on Ethereum itself.

- Optimistic Rollup: A Rollup is the current consensus for scaling up the network, by outsourcing compute to other networks, and pushing the important end state back into Ethereum. Optimistic rollups do this by assuming that there'll be at least 1 person to challenge a proposed block whenever that block's invalid. This setup however has the shortcoming of needing there to be a challenge window for other participants in the network to have time to respond.

Re: Why banks are suddenly closing down customer accounts

#875

Post by dale_glass »

krupan wrote: post #765
dale_glass wrote: post #502

Earlier quoted context omitted.

Yeah, I've messed with the stuff a bit in the past. I understand the technical details decently well. I don't see any significant difference between Bitcoin and the rest. Bitcoin was just the first thing that stuck but that doesn't grant it any special privileges.

If you can't figure out why Bitcoin stuck and the others didn't then maybe you should put a little more effort into understanding the differences. Or just respectfully stay out of these conversations maybe?

> If you can't figure out why Bitcoin stuck and the others didn't then maybe you should put a little more effort into understanding the differences.

Yeah, inertia, social pressure, and economic incentives. For instance miners are into it for the money, so to them technology doesn't matter. A technologically superior network is of no use to a miner if mining for it makes less money.

> Or just respectfully stay out of these conversations maybe?

Nope.

Re: Why banks are suddenly closing down customer accounts

#876

Post by fennecfoxy »

phil21 wrote: post #660
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 think a lot of folks reading this will immediately be critical and tell you exactly how easy it would have been to solve your problems from spiraling out of control. They are likely largely factually correct. What is not being said is that many folks are operating at the limits of their executive function. Add something like this to an already stressful period of time to such people, and they simply will not be abl…

Well, it's one of those things right.

Everyone's says it's easy to wake up at 4 am for a flight. Just wake up, duh.

But actually doing it is another thing.

Re: Why banks are suddenly closing down customer accounts

#878

Post by silentsea90 »

Reubachi wrote: post #684
silentsea90 wrote: post #261

Earlier quoted context omitted.

I am always surprised how HN folks fall in hook line and sinker for Democratic talking points from senators FAR removed from any understanding of technology and insistent on curbing basic internet freedoms. The previous version of this was the proposal to ban encryption because bad actors can have a private conversation. If you oppose banning encryption but are in support of banning crypto, I would encourage folks to…

Genuine observation incoming: I am always surprised how HN folks like yourself fall in hook line and sinker for party line politics, even here. It's very hard for any layman to gleam even surface level tech info from the news, politicians etc. because any statements from politicians are by definition influenced by lobbyists. Senator XXXX not understanding (or feigning ignorance) of a tech issue has nothing to do with…

I can't edit my comment but happy to include Republicans too. The Democrats have been more vocal about Bitcoin lately but agreed they're all part of the lobby machine. I have no love for either party :)

Re: Why banks are suddenly closing down customer accounts

#879

Post by silentsea90 »

Yizahi wrote: post #681
silentsea90 wrote: post #261

Earlier quoted context omitted.

I am always surprised how HN folks fall in hook line and sinker for Democratic talking points from senators FAR removed from any understanding of technology and insistent on curbing basic internet freedoms. The previous version of this was the proposal to ban encryption because bad actors can have a private conversation. If you oppose banning encryption but are in support of banning crypto, I would encourage folks to…

Because HN folks don't want to live in the anarcho-capitalist libertarian dystopia, where whole world "money" is controlled by a few criminals in the offshores, like Zhao, Giancarlo, Sun, Sam, Alex, etc. and by a small mining cartel controlling every transaction consisting mostly of the same people. They don't want to have their transactions blacklisted (like all those "tainted" bitcoins for example) and don't wasn't…

There is no better fix than Bitcoin. Banks and governments will always try to be fiscally irresponsible by removing a gold standard even if it were brought back. Bitcoin is the easiest way to impose rules on the system. Let me know what you think is a better alternative

Re: Why banks are suddenly closing down customer accounts

#880

Post by dennis_jeeves2 »

coldtea wrote: post #715
ArabicBaklava wrote: post #481

Bank of america did this to me, in the same weekend i was moving out. All my stuff was in the car, it was a friday at 3PM and i was in the gas station. I couldn't fill up my gas. Called and they told me to come to the bank with two forms of ID. When I arrived to the bank the fraud department was operating in NY (3hrs ahead) and they were closing, so they told me to come next tuesday (it was a long weekend). I went ho…

> I went homeless for 1 week with no food. It was my last semester in university and couldn't pay for tuition because my bank acc was locked, so the university dropped my classes and i was not able to graduate, as failing to stay enrolled (international student) i had to go back to my country. Aside from the bank's fault, this is a failure of basic society functioning on so many levels. Dropping you because you could…

> this is a failure of basic society functioning on so many levels.

True it boils down to people really. Society has just a facade of being functioning, in reality it as bad as the govt, banks that it represents.

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