Why banks are suddenly closing down customer accounts

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 from customers. Some of the regulation is also the result of decades of lobbying efforts by major players, making it extremely hard for new ones to compete. Banks are rarely held accountable because for some reason most regular people are fine with this or don't understand it.

There is a solution - not sure if everyone's ready to hear it yet: Decentralized finance. Good luck to a bank trying to shut down your self-hosted Ethereum wallet. Banks provide important services and will continue to exist, but giving them full unchecked control over our life savings and finance is mad. There are a lot of other issues with the current system, and many people don't really understand the contracts they're signing, including that they don't legally own "their money" in the bank account in most cases (they're creditors). But the question of effective control over ones own funds is the most crucial one to me.

Soon we will have to stop having sympathy for people who get screwed by the banks as the alternative is just too easy and obvious.

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 able to advocate for themselves in an effective manner or make logical decisions in the moment.

I say this from personal experience. Small stuff like this, in particular gatekeeping kafkaesque stuff, absolutely kills my life in a way that is not logical or explainable. It effectively shuts my brain down. I've lost many years of my life due similar issues, where in the end someone else could have handled them as a minor annoyance.

All this idiocy could have been prevented by a communication stating "come here before one week or we will close your account". They simply do not care about people.

He got stuck for about a week and a half with his money all locked up in an account he couldn't access. It was early enough in the month that rent and bills etc. wasn't an issue, we just ended up helping him out buying food for a few days while he sorted out another account and got an advance on his salary.

I remember the range of excuses and explanations for delays from the bank left us all gobsmacked.

This happened to me a decade ago (not in the US), and I was surprised to find that every bank in the country had similar provisions in place. I'd be surprised if yours doesn't too.

The main thing is any company can start denying you service whenever they want as long as it's not for a protected reason, and then it's up to you to prove in the court of law (or arbitration) that they didn't specifically screw you over in any particular way, which is usually not worth the hassle.

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.

Unverifiable, untraceable money arriving into your account does not work well with AML regualations.

The case one should worry about these banks is this: you deposit a $500K check, or you got a wire for $500K; check was cleared on the sender's side. Now Chase/Big Bank holds your funds, saying that this check is fraudulent, and that bank closes your account after finding you risky (risky because of this $500k and by looking back at your account history). Now $500K is in Chase's hands, your account is closed by Chase, and Chase doesn't want to give $500K, nor does Chase want to return $500K to the original bank/sender. This is where you should file a complaint with CFPB right away. Without CFPB complaints, the fraud department at Chase, its Bank employees just give you run around for months. File CFPB complaint right away, if any bank holds your funds after 10 business days; don't listen to these employees at all.

CFPB can't force banks to reopen your accounts. Just to get your funds, file a complaint with CFPB right away, and don't trust any bank employee on getting your funds.

The problem is what you are describing is not exactly legal. You are acting as a money transmitter for your mother; and this might even trigger for you some complex tax obligations.

What you should do is open a Chase bank account for your mother. You already bank with the agency.

"19 Republican states accuse JPMorgan of closing bank accounts and discriminating against customers due to their religious or political beliefs" [1][3]. Of course, this site is not favorable to conservatives and their views. Some left activists' accounts are closed as well [2].

[1] https://www.businessinsider.com/republican-states-accuse-jpm...

[2] https://nitter.cz/OccupyWallStNYC/status/1674022837084991489

[3] https://www2.cbn.com/news/us/chase-bank-cancels-nonprofits-b...

Chase is will known for this in many political circles

At least, that is the charitable interpretation.

(Interac is the Canadian debit card system, owned by a network of banks, which has also branched out into person-to-person money transfers between bank accounts because we don't have Venmo/Zelle/etc here).

Many phone systems have a thinly veiled threat about zero tolerance policies, to treat staff with respect, and in the case of certain government agencies here in the UK, that they will refer cases to the police. The same is repeated on written posters in eg doctors and dentist offices

Just a coincidence I’m sure but I find employees (especially on the phone) even more condescending and unhelpful these days

Let's not forget Crypto mining has a not insignificant energy footprint, and is a driver of climate change. Really, detrimental to society from the get-go.

If you want better service, there are two ways. One is to be an ultra high net worth individual. But the threshold for that is pretty high - from what I recall, real private banking nowadays starts around $5M to 10M in assets with a single institution. The term "millionaire" doesn't mean as much as it did in the 1990s.

The other option is to go with a small local bank or a credit union. If you're in a CU with 10,000 members, it's a lot easier to resolve problems or discuss unique circumstances.

That being said, if you know when are are leaveing,.where you are going, and when you will be home, you can often put a vacation note on your account, and then the bank will know you are on vacation. That is what I did when I spent this summer in Japan, using.my bank debit card because it has no foreign transaction fees, the whole time.

I’ve had zero problems. I think we’re all getting excited about anecdotes.

Keep your US address on there and VPN (though frankly I’ve never needed to for anything other than Charles Schwab) and you often glide through unnoticed.

What all the people profiled in the article have in common is that they were depositing money in "suspicious" ways.

I am just average white US citizen who was working on oil rigs but most likely some of my whatsapp/facebook/iMessage contacts were related to families involved in dissidence against the Saudi government (because the oil region of Saudi is populated by a minority Shia group that is severely underrepresented in governance). Their mosques also had individuals with mental health issues who occasionally try to bomb the mosques in a very, very similar parallel to school shooters back home here in USA.

0: https://en.m.wikipedia.org/wiki/Secondary_Security_Screening...

Crypto today is the only way how you can take control of your own funds.

What use is the money in your Bank account if the ruling political party can label you an ultra-right extremist and retroactively lock all your money down, just because of a single 1$ donation you did to a cause you believed to be right, like Canada did?

Maybe if you're talking about Monero or another currency with the key security property of untraceability. Otherwise it's only a matter of time until cryptocurrency exchanges require documentation about the sources of money, which will likely resemble a parallel blockchain that carries wallet metadata.

Make sure to hold my bag for me.

He's not wrong

Banks are about to lose more trust, and money. I'll be doing some research into my credit union as well. Can't trust these institutions, man.

The onus should not be on us to fit their model, but on them to fit their model to reality.

That alone exceeds the requirement of “minimal” as there’s now a need to hire staff for fraud monitoring, handle disputed transactions, chase fraudulent transfers, deal with those who forgot their passwords to electronic banking, had their passwords stolen, etc.

What are the new revenue channels that will pay for all that extra staff (and considering it’s USPS, their pensions)?

Are you talking about a specific law, or about the clause in your constitution?

If the latter: the postal clause merely gives congress some powers, but does not require them to do anything.

Except, unless cryptocurrencies are tied to some brain implant so you cant lose the keys. There will be a need for a custodian for the average joe's key...and banks 2.0 here we come.

But that's not true. If it's not a deliberate attempt to hide fraud/theft but otherwise looks like actual money laundering, then it is still a crime, at least according to current KYC/AML laws. That's the real problem with this all. That's what makes the debanking problem (which you agree is bad) so easily ignored by law makers and law enforcement.

Anyway, wasn't the tax evasion also an actual crime? It's not like you get a pass on the tax evasion because you're also strongly suspected of committing much worse crimes, is it?

Al Capone was guilty of running a massive criminal organisation responsible for many many crimes (very difficult to prove due to structures of organised crime). He was also guilty of massive tax evasion (a crime carrying serious jail time), because it turns out it's hard to pay the right tax bill when you're trying to hide the income from your massive criminal enterprise.

The Capone tax case wasn't some made up crime to try pin him. He committed serious tax evasion, which would also carry severe penalties if you or I did it at that scale with legitimate income.

Deputizing the banks to spy on me just makes those banks obligated to the same rules.

Money laundering is a crime predicated on the idea that the money I rightfully own is something they should be able to confiscate from me on hypothetical crimes, and they're attempts to seize it often cause people to try to make it less suspicious to the government. It's bizarre.

If they wanted to fight organized crime, the simple way was always to legalize cocaine, meth, and heroin, and sell that shit out of liquor stores in plain retail packages, all manufactured by regulated pharmaceutical companies that would produce it for a fixed, low profit-over-cost, in measured doses and free from unsafe adulterants.

Government causes problems with bad laws, blames the problems on the criminals, then makes more bad laws to punish them for it, causing more problems. As it is now, it's illegal for you to own and possess cash, though they tend to ignore it as long as you don't keep any in tempting amounts (typically less than $1000).

For example, I was living and working in Ukraine and without some sort of.. let's call it instruments... I would not have been able to get my money in the clear and legal into the western bank. Because obviously all money earned in Ukraine could only be made criminally, no way a ukrainian programmer could earn some. Must be a criminal.

One western bank even told me in private: "we do understand stealing a train of coal and laundering bribes from Ukraine, this is common and the risk is clear for us; but we have no idea about your IT stuff and things, it scares us".

Of course, it's getting easier today in some ways but good luck exporting any substantial amount of money from Ukraine into the world and in the clear. Practically impossible without some help of money laundering services.

Now I expect to be downvoted to hell because the everyday reality of being from a third-world country is incomprehensible to American people so it must be me in the wrong.

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.

> 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 !

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.

Until it does ... at which point they'll scream "Bloody Murder!" and ask "How could this happen to me?"

https://en.wikipedia.org/wiki/The_Origins_of_Totalitarianism

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.

Example: In the EU all internet transactions require a second factor, it's annoying -- but typing in a credit card number is already crappy UX.

But making identify theft harder could also reduce risk of keeping clients with abnormal patterns. Since the bank will have more confidence that the customer isn't subject to identity theft.

Obviously, there are more options. Maybe, banks should be held more accountable.

But increasing the bar for fraud by having a strong online identity system could probably raise the bar a lot.

United States currency is legal for all debts public and private (it says so on the notes), but that doesn't mean it's required to be accepted for all debts.

  There is no federal statute mandating that a private business, a person, or an 
  organization must accept currency or coins as payment for goods or services. 
  Private businesses are free to develop their own policies on whether to accept 
  cash unless there is a state law that says otherwise.

Say that officially your steak costs one million dollars, but if you pay electronically, you get a discount down to 20 dollars.

If you want to pay in cash, that will be one million dollars, please.

I wish we could have something like Monero run by the Government backed by gold.

Right, it is incredibly divisive. So is freezing the bank assets of someone, which can endanger their lives at worst and at the minimum causes major distress.

I think it is important to highlight that if you're working at a bank, certainly at a high position, but also everyday clerks, you are lackeys for an organisation that threatens the lives of other people. Those people can choose to retaliate when your organisation gives them no other recourse. It is a fact. Maybe the banks should hire armed private security companies to safeguard the well being of their lackeys?

After all:

- How are you supposed to hire a lawyer to help get your account back when your account is frozen.

- How are you supposed to buy groceries to feed yourself, and your family the within possibly the next few hours. Not everyone has a fully stocked pantry.

- How are you supposed to buy life-sustaining medical supplies to for example a diabetic?

- How are you supposed to pay rent?

Within 1 month, a debanked person will be completely at the whims of being saved by friends and other alternative support networks. They are essentially robbed of everything. 1 month in a bureaucratic context __is nothing__. An issue with frozen bank accounts can take years to resolve, if they are even resolved?! The bank may choose to not give out the money in cash, and may require another bank to receive the funds by wire. What if no other bank takes in this debanked person?!

So when people talk about how divisive it is to mention the absolute animosity that these people will feel towards bank personell of all levels, ask who started it.

And most importantly, if you can't hire a lawyer, you can't buy groceries, you can't pay rent, you can't even buy gas for your car. Your family is standing in line at a homeless shelter, and your kids are crying. What remains other than desperate violence against people you feel are responsible for putting you in this hell of an existence? If you work at a bank, quit now. Don't wait until you've got blood on your hands because you've been a lackey to an inherently anti-human organisation such as a bank. If you continue working for the banks, even as a private contractor which might be the audience of people reading this, you're potentially in the firing line of very desperate people.

And those desperate people are right to be desperate. History doesn't usually change just because someone "filed a complaint", it tends to need to get really bad, and bloody.

[1] https://www.theguardian.com/business/2023/sep/19/nigel-farag...

[2] https://www.reuters.com/business/finance/natwest-meets-quart...

"A Ponzi scheme, or "ponzi" for short, is a type of investment fraud with these five features:

1 People invest into it because they expect good profits, and

2. that expectation is sustained by such profits being paid to those who choose to cash out. However,

3. there is no external source of revenue for those payoffs. Instead,

4. the payoffs come entirely from new investment money, while

5. the operators take away a large portion of this money."

This is great because points 3 and 5 are trivially proved false for Bitcoin and shows that is no more a ponzi scheme than stocks or real estate or any other common investment.

Thank you for the insight.

https://www.investopedia.com/news/what-paul-krugmans-problem...

He also said: " the Internet's Effect on the World Economy Would Be 'No Greater Than the Fax Machines"

I consider Krugeman a clear contra indicator. Bitcon long... :-)

> https://ic.unicamp.br/~stolfi/bitcoin/2021-01-16-yes-ponzi.h...

(The following comment is a copy of what I've already said here: https://news.ycombinator.com/item?id=36951404 )

Points 3, 4, & 5 apply similarly to any investments made in commodities (gold, silver, copper). A direct source of revenue for those commodities themselves is not provided: There are no dividends being paid out just because I hold 1 kg of gold in a safe. Instead, the people that want to use that gold for other purposes is what provides revenue.

Point 1 & 2 can similarly be demanded from commodities as well. The only difference being is that the public market is where I can cash out my 1kg of gold to.

> By that definition, gold too is a ponzi. No, gold clearly fails to satisfy that definition on two counts.

> First, few if any gold investors have expectations of profits. They generally invest in gold as a hedge -- a "store of value" -- that they hope will retain its value in case other assets go sour.

There is no difference between the expectation of profits & stores of value: They're facets of the same diamond - Value. The pursuit of one is a masked notion of the other & vice versa - Expectations of profit are a consequence of wanting to retain & accumulate resources against the eroding forces of inflation & entropy in general, & a desire for stores of value is of similar expectation that the overall value grows faster than the eroding forces themselves.

> Second, as a commodity, gold HAS a source of revenue besides the investors; namely, the purchases by consumers like jewelers and industry, who take gold out of the market (2/3 of the production) for uses other than re-sale. When one buys 1 oz of gold, one gets a chip of a metal that one can sell to those consumers, and thus obtain some money that does not come from other investors.

Again, as stated above, the gold itself doesn't have inherent value: It's value comes from what can be done with it after being transformed/used for something else.

Similarly, digital services have already been shown to be commodifiable via AWS' EC2 Spot Instances & their fluctuating prices as demand changes.

https://aws.amazon.com/ec2/spot/pricing/

The consequence of this logic is that in the long term, such compute can eventually be accessed by anyone from anyone willing to sell it via public markets. HOWEVER, such a public market was not yet feasible due to the possibility of such computations not actually being done & fraudulently being reported as such. The stopgap between that future is what we have now: Centralized companies selling compute under trust-based assumptions that do currently work, but that present significant problems related to control over said compute.

The technology was not there yet, but it's being launched now.

EVM-based & Turing-complete VMs in general will generally be made more verifiable with the rollout & integrations of ZK (0-knowledge) proving systems into said VMs. When such computations can be verified to have been genuinely computed within 1/2^n (n >= 64) of an error rate, the addition of a public market to make such compute sellable to people that want said compute is the next logical step, to which Ethereum, its L2 solutions (zkSync, Polygon zkEVM, Optimism, Arbitrum, etc.), & all Lx (x > 2) markets that will come in the future, have already & will provide.