[HN Gopher] Why banks are suddenly closing down customer accounts
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Why banks are suddenly closing down customer accounts
Author : ljosa
Score : 61 points
Date : 2023-11-05 12:35 UTC (10 hours ago)
(HTM) web link (www.nytimes.com)
(TXT) w3m dump (www.nytimes.com)
| ValentineC wrote:
| https://archive.ph/2023.11.05-111811/https://www.nytimes.com...
| meisel wrote:
| Do they just lose all their money in those accounts?
| RecycledEle wrote:
| The law says the bank must give them their money. But banks are
| above the law. I know when PaPal codes and account, PayPal
| usually steals the money. Most traditional banks eventually
| give you your money if you hire a lawyer, that is, they give
| the money to the lawyer who keeps it.
| edmundsauto wrote:
| How do you know Paypal usually keeps the money, is there a
| public accounting of this situation? Would be interesting to
| analyze - please share any info you have on the data.
| wolverine876 wrote:
| The article says they get the money, but sometimes weeks later.
| dv_dt wrote:
| Sounds like a strong danger of applying a modern form of red
| lining & financial deplatforming. If you're a higher risk, of
| course any financial products that you can access will cost more
| in fees and interest. Who is considered a higher risk by the
| impersonal algorithms and bank systems being applied?
| wolverine876 wrote:
| You can be barred from flying (is that still true?) and now
| banking, without trial or evidence.
|
| It's already highly anti-democratic, but imagine what an
| aggressive, oppressive government will do with this power.
| sitzkrieg wrote:
| as shown in the article!
| raybb wrote:
| Yup. Reminds me about how Madison Square Garden was using
| facial recognition to ban its owners enemies
|
| https://www.nytimes.com/2022/12/22/nyregion/madison-square-g...
| sneak wrote:
| 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 subject
| to surveillance and seizure/freezing without evidence or
| probable cause. Cash has none of these problems.
| noSyncCloud wrote:
| Cash is absolutely subject to freezing/seizure. Try carrying
| $25,000 and letting the police search your vehicle.
| Scoundreller wrote:
| > letting the police search your vehicle.
|
| Good idea to decline those
| smokeydoe wrote:
| Good luck with that. There are multiple reasons cops use
| to do a search if they want to. Probable cause can range
| from seeing something sticking out from under your seat,
| speeding, suspicion of being under influence, or being in
| proximity of another crime. Pair that with the incentive
| of civil forfeiture profits and it's not looking like a
| good idea to travel with 25k
| Ajay-p wrote:
| I am convinced that if the American police forces wish to
| detain, arrest, or take your money, they will find a
| reason to do so, or create one where none was there
| before. Assets forfeiture, detainment, and arrest without
| legitimate judicial reason is deeply unfair. Regardless
| of innocence that may be found and adjudicated later, the
| damage to ones reputation, employment, and even banking
| can be disastrous. Recourse is often costly or non-
| existent.
| comte7092 wrote:
| I mean, why would you ever "let" them do that? Either they
| are doing a compulsory search or they aren't getting
| permission.
| almatabata wrote:
| 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.
| SllX wrote:
| If they issue you a check you can take it to the banking
| institution listed on the check and they will honor it. The
| downside is, now you're dealing with cash (and some
| companies went DD only a long time ago).
| sneak wrote:
| If a company wants to hire you, they will figure out a way
| to pay you. That's an implementation detail. Paychecks are
| still a thing.
| macintux wrote:
| Most people are not so desirable that a company will bend
| over backwards to work around something like this.
|
| Especially since they would likely assume that the person
| earned this punishment and thus is a risk to employ.
| rkagerer wrote:
| I'm not sure I would agree that banking is optional in
| today's society.
|
| Canada has laws[1] intended to ensure access to banking, with
| $10M fines for violations. Not familiar with them myself and
| wondering how effective they are, and whether anyone has sued
| and won. It's maybe a bit ironic considering how the
| government here improperly locked a lot of people out of
| their funds during the trucker protests (the inquiry found
| collateral damage where people completely uninvolved were
| affected).
|
| [1] https://www.canada.ca/en/financial-consumer-
| agency/services/...
| cjalmeida wrote:
| Banking is _not_ optional in today 's advanced societies, and
| the sooner we recognize that, the sooner we'll have proper
| regulations mandating a minimum level of banking service, eg.
| Limited deposits, withdrawals, debit/secured cards.
| Gibbon1 wrote:
| Solution, bring back post office banking or banking through
| the social security admin. Turn 18 you get a banking and
| benefits card. Do that and most people won't ever have to
| do business with a private bank, ever.
| sneak wrote:
| Millions of people live normal lives without bank accounts.
|
| The solution to the problem is not to force retail banks to
| extend their terrible customer service to all of society,
| it's to ensure the utility of cash. Cash works great even
| if the banks (or the state) hate you.
| wolverine876 wrote:
| > Banking is optional
|
| I believe it's optional for you, but not for the great
| majority of people. Lack of access to banking services
| specifically holds back a lot of people (look up 'unbanked').
| fragmede wrote:
| it's almost as if _power_ doesn 't want to do things
| democratically. who cares if it's the government with it's boot
| on my neck, or a corporation with a boot on my neck, either
| way, I'm getting trod on!
| Ajay-p wrote:
| You can also have your money and property seized without charge
| or conviction by police, while sitting on the side of the road.
|
| https://www.theatlantic.com/politics/archive/2015/05/the-gla...
| ciabattabread wrote:
| At minimum, there needs to be a law that requires banks to
| identify to the customer the specific transactions that led to
| the closing of the account. And if there's no prosecution related
| to these transactions after a year, the ban gets lifted.
| slovette wrote:
| 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, this is likely a narrow lens statement. The problem
| is more complex around governments/judicial systems
| incentivizing banks to behave like governments. In reality, our
| regulatory agencies need to do their jobs: regulate/enforce and
| be held accountable when they don't (instead of passing that
| enforcement on to banks through threat of liability).
| nickff wrote:
| 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 aims (see operation Choke Point).
| fragmede wrote:
| The law says the opposite, in fact. If a bank teller reveals to
| you that you are the subject of an SAR, it could have sever
| consequences to them, so they're very disincentivized to reveal
| that there's even been a suspicious transaction, never mind
| which one it was.
| cft wrote:
| Eventually more and more use cases for Bitcoin will emerge, as
| the government becomes less competent and more reckless with its
| fiat. It costs $35,000 for a reason.
| euroderf wrote:
| Someone's social credit score went negative, for no
| comprehensible reason.
| pauldenton wrote:
| https://youtu.be/B9IrNcv_OdM Nigel Farage brought a lot of
| attention to the Debanking scandal
| pipes wrote:
| And the regulator pretty much said it is all fine, nothing to
| see here!
| cwillu wrote:
| It's remarkable how totalitarianism seeps in.
| jonahbenton wrote:
| 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.
| wrycoder wrote:
| The actors know their lines well, they don't need direction.
| In German, it's called Gleichschaltung.
| BlueTemplar wrote:
| 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 debanked !
| salawat wrote:
| >There is no centralization/dictatorial dynamic for this in
| the US, at all.
|
| You are incredibly incorrect on that assertion. There is, in
| fact, a centralization/dictatorial dynamic at play, and it's
| called the Bank Secrecy Act.
|
| Now it doesn't _read like it_ , which most acts of american
| legislature don't, but on further observation of what it
| actually _does_ , the intent becomes clear. There is one
| financial system in the U.S., you will play by it's rules or
| be excluded, it won't tell you why, it will not be a dumb
| pipe either. It is directly coupled to law enforcement, and
| the Federal Government, and yes, there is a Master list that
| if you get on it, will lock you out of withdrawing from (but
| not depositing into!) every U.S. bank.
|
| Part of why I no longer do finance work. Once you see how the
| sausage is made, there is no shower hot enough to slough off
| the slimey feeling.
| CamperBob2 wrote:
| Read the comments on the article at the NYT, as well. Notice
| how many people take the banks' side.
|
| Whatever happens to you is fine and dandy as long as it doesn't
| happen to them... and it probably won't happen to them.
| linusg789 wrote:
| https://ghostarchive.org/archive/jEBXz
| robbywashere_ wrote:
| I have a crazy idea that might just work. What if we could create
| something that has the privacy of cash, is uncensorable like cash
| but could also be digitally transmitted like electronic payments?
| jowea wrote:
| > What if we could create something that has the privacy of
| cash,
|
| Unless you're implying Monero I don't think so.
|
| > is uncensorable like cash
|
| Uncensorable until you get sanctioned like Tornado Cash? Or
| this is also about Monero?
|
| > but could also be digitally transmitted like electronic
| payments?
|
| At the same speed, convenience, security and efficiency level?
| RockRobotRock wrote:
| Just say crypto. Stop being a sarcastic ass and just say crypto
| raincom wrote:
| Banks hide behind Bank Secrecy Act and other regulations in order
| to debank people. Chase closed my account, and the reason Chase
| gave: "Financial institutions have an obligation to know our
| customers and monitor transactions that flow through our
| customers' accounts. After careful consideration, we decided to
| close your account because of unexpected activity on these or
| another Chase account."
|
| I didn't dispute any transactions, nor did I deposit any
| fraudulent checks, no check bounces, no overdrafts, no cash
| deposits, no wires, not an instance of disrespecting any Chase
| employee either on phone or in person. Yes, I used Zelle often, I
| deposited checks often. When people complain about debanking,
| many folks defend these banks, saying that there are good reasons
| for these banks to close (some transaction, etc).
|
| Banks are heavily regulated, I understand. Regulators want to see
| a certain number of SAR and CTR filings based on the size of
| bank. If a bank has 1M accounts, regulators want to see a certain
| number of SAR/CTR filings, a certain number of account closures;
| regulators go hard on financial institutions, if the latter don't
| follow the industry average (#SARs, #CTRs, #closures). This has
| created a vicious loop: banks use machine-learning/AI to flag
| accounts; then, back office employees 95% of the time just close
| these accounts.
|
| Welcome to the new debanking world. Chase and many others also
| monitor your political activity, social media, protests, etc. If
| they don't like you, they can close your account by simply
| stating that "we have an obligation to know our customers; after
| careful consideration, we decided to close your account". When
| banks decide to close your checking accounts, beware that they
| also close your credit cards (esp Chase is notorious for this).
| fyzix wrote:
| I'm usually a crypto sceptic but your story scares me, because
| it'll only get worse with time.
| krupan wrote:
| Just a tip, stick with Bitcoin, not crypto.
| vfclists wrote:
| The real issue here is a human rights issue.
|
| It is wonderful to hear politicians and the UN speak of our
| wonderful human rights, but clearly that does not extend to our
| ability to trade our skills, good and services in a legal manner,
| in our common currencies.
|
| Now how is that for our much vaunted human rights?
|
| Is anyone going to propose a constitutional amendment that makes
| banking a human right not subject to the whims and caprices of
| anonymous secretive unaccountable govt and banking officials?
|
| Of course we could trade in cash, at the risk of having some "law
| enforcement" officials seizing our cash and asking us to prove we
| acquired it legally, subject to time wasting and expensive legal
| process which usually costs more than the amount seized. Habeas
| corpus doesn't apply to the cash which is why the court cases
| read State of New York vs $28,777 rather than State of New York
| vs John Doe.
|
| In the EU some countries have placed limits on the size of
| payments which can be made in cash.
|
| As for the US one has to wonder why the $10000 deposit
| notification limit which was made in 1970 has not been adjusted
| to account for inflation, which according to Google it is about
| $79,000 in 2023.
|
| Those officials must have been ecstatic at the introduction of
| computers which makes tracking such transactions so easy.
|
| Anyone to campaign for the adjustment of the $10000 figure to
| account for inflation? We want to party!!
|
| Think of how it would improve the liquidity of banks. So much
| money would come flowing in in full knowledge that it wouldn'tbe
| subject to needless checks from nosy make busy bank and IRS
| officials.
| darawk wrote:
| If only there were some sort of technological method for
| disintermediating banks without sacrificing their advantages.
|
| Ah well, nevertheless.
| neonate wrote:
| https://web.archive.org/web/20231105205756/https://www.nytim...
| Ajay-p wrote:
| Debanking is deeply unfair but more so in our society that is
| moving increasingly towards a cash-less society. A person can be
| debanked for no fault of their own and that causes them to be
| unable to pay rent, bills, etc. Like being arrested - there is
| little recourse without great expense or effort.
| petermcneeley wrote:
| If only there was a means to transact money digitally without the
| need for an interstitial.
| RockRobotRock wrote:
| Yes, if only there was a practical way to do so.
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(page generated 2023-11-05 23:01 UTC)