[HN Gopher] What Happens When Your Bank Isn't a Bank and Your Mo...
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       What Happens When Your Bank Isn't a Bank and Your Money Disappears?
        
       Author : gnicholas
       Score  : 14 points
       Date   : 2024-07-09 18:01 UTC (5 hours ago)
        
 (HTM) web link (www.nytimes.com)
 (TXT) w3m dump (www.nytimes.com)
        
       | Night_Thastus wrote:
       | _And it 's gone!_
        
       | gumby wrote:
       | I'm considering using Mercury,* which is allegedly quite popular
       | with startups. They do have all the usual KYC etc of a bank.
       | 
       | Like the ones discussed in the article, Mercury also keeps
       | customer funds in Evolve, among other banks (I guess they claim
       | to spread your money around so you don't have more thank 250K in
       | any one basket). So if I understand correctly, the problem is
       | that I have no visibility to the back end, so if Mercury keels
       | over I'll have trouble getting my money?
       | 
       | * I used SVB for 25 years, but over the past few years their
       | service declined and First Republic poached a lot of their good
       | guys, so I switched to FRB. With a track record like that,
       | perhaps Mercury should reject me?
        
         | gnicholas wrote:
         | I wondered about this also. Seems like the virtualization that
         | allows for spreading risk also introduces opacity, and risks of
         | its own.
         | 
         | In another article currently being discussed, [1] Mercury has
         | said they may be affected by a breach at Evolve. Yikes.
         | 
         | 1: https://news.ycombinator.com/item?id=40916260
        
         | jellicle wrote:
         | "Mercury is a fintech company, not an FDIC-insured bank.
         | Banking services provided by Choice Financial Group and Evolve
         | Bank & Trust (r); Members FDIC. Deposit insurance covers the
         | failure of an insured bank." - from their website
         | 
         | What they're trying to say here is YOU ARE NOT INSURED IN ANY
         | WAY IF MERCURY STEALS YOUR MONEY.
         | 
         | I hope this makes it more clear to you.
        
           | gnicholas wrote:
           | But if the money is deposited in an FDIC-insured account and
           | is stolen (by an external hacker or Mercury) isn't it insured
           | against that loss?
        
       | jjwtieke wrote:
       | http://archive.today/LWmgP
        
       | jellicle wrote:
       | In a properly regulated world, all of these clowns would be shut
       | down today and some of them would go to jail.
       | 
       | Instead we do no regulation, these "not-banks lying and claiming
       | your money is safe" get to harm a lot of people, and the public
       | further loses trust in everyone involved.
       | 
       | To anyone reading this who has money in any business that claims
       | not to be a bank but instead your money is super-safely stored in
       | a real bank somewhere and so there's no risk to you: run away,
       | run away fast. Get your money out and close your account. You're
       | in a Ponzi scheme and you don't realize it.
        
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       (page generated 2024-07-09 23:02 UTC)