from Hacker News

Why banks are suddenly closing down customer accounts

by ljosa on 11/5/23, 12:35 PM with 872 comments

  • by neonate on 11/5/23, 10:32 PM

  • by ArabicBaklava on 11/6/23, 6:51 AM

    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 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.

    - 3 days before i received a transfer from my brother (6k usd) to pay for tuiton and new place

    - no unusual transactions, never reported any fraud before, just was hit with the "per our agreement we can close your account without notification." and they provided me the balance 1 week later.

  • by raincom on 11/5/23, 7:24 PM

    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).

  • by kylehotchkiss on 11/5/23, 11:08 PM

    Protip to anybody who wants to spend an extended amount of time overseas - you’re looking at a strong opportunity to join the list of people who have their accounts closed. Red flags include quantity of overseas debit card transactions, setting a PO Box (this one apparently is a very big red flag to banks) or a PMB as your bank address, lots of wire transfers.

    Open multiple bank accounts at different banks, use services like wise.com for transfers, and limit your overseas spending with American cards to only a credit card issued with a bank that isn’t the same as your primary accounts.

    Yay, patriot act. Glad we have so much energy focusing on legit bankers instead of the crypto that is actually funding multiple US adversaries at this very moment

  • by Ajay-p on 11/5/23, 10:45 PM

    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.

  • by dboreham on 11/6/23, 7:14 AM

    I didn't get de-banked, but I had a similar wacky experience last year with Wells Fargo. I was buying a car from a guy in Salt Lake City. Not a terribly expensive car. I live in Montana but at the time I was physically in Northern California on a trip. I'd driven to SLC and looked at the car, met the seller, and done various things to ensure I knew his identity (e.g. he used his work email and he had a medium profile media job so was listed on his employers' web site with a picture). (for people in other countries: banks in the US make it impossible for regular people to electronically transfer money to someone else, at least not car-sized sums of money) So I initiated a wire transfer to the guy online. Note: his bank account, the wire destination was also a Wells Fargo account. A few minutes later I receive a call from a lady saying she is from Wells Fargo, asks if I initiated a wire. I say yes I did. She asks do I know the recipient. I say yes, and provide some background on how I know him, and how I know he's not a Nigerian Prince. I also mention that his account is at Wells Faro so if they have any concerns, why not pop open his records and check him out. She says that's all great, thanks, good bye.

    <hours elapse> guy emails me asking if I sent the wire because it's not in his account. I say sure did, but let me check if the funds have departed my account. This is when I discover that WF locked all my online account access. And of course they did not send the wire.

    This whole mess took nearly the entire day to resolve and required me to go into a WF branch to prove I was myself. And when I did that the helpful WF manager I worked with ended up exasperated at the WF department that had locked my account. She said they ended up suspecting that she was a bad actor, even though she was calling on an internal line!

    This all makes me suspect that in addition to bad ML filtering, banks also have plain moron/assholes working in their fraud departments.

    (Yes I got the car eventually and my bank accounts back)

  • by krupan on 11/5/23, 11:00 PM

    The crazy thing to me in all this is that the types and amounts of transactions you make with your money and the bank is not criminal and never could be. It could however be a technique used to hide things that are criminal like fraud or theft. Somehow somewhere along the way we as a society decided we were ok with criminalizing the types of transactions that can be used to hide crime. That to me should have been a clear step in the wrong direction. "Money laundering" (however that is defined) should not be a crime. Theft, fraud, etc. should be.

  • by dv_dt on 11/5/23, 4:27 PM

    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?

  • by xbmcuser on 11/6/23, 2:54 AM

    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.

  • by cwillu on 11/5/23, 5:46 PM

    It's remarkable how totalitarianism seeps in.

  • by ciabattabread on 11/5/23, 5:09 PM

    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.

  • by vfclists on 11/5/23, 8:35 PM

    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.

  • by RockRobotRock on 11/5/23, 11:01 PM

    So many restaurants in my city are credit/debit only. That should be illegal.

  • by kyc_sucks32 on 11/6/23, 10:40 AM

    Lloyds bank did this to me. It took three calls over 3 weeks to customer services to get it reversed - each over 30min. I explicitly asked and was told it was half driven by algorithm and half by people. When it reversed I was basically told it was a bug.

    My belief is their is some data science team responsible for this. They are ruining people's lives with their false positives. I hope those people read this message and realise what they are doing.

    I was lucky. I would've got a marker put against me that could've had every other bank close my account. I only escaped this because of my persistence in calling them and getting lucky with a customer service rep who went the extra mile.

  • by ValentineC on 11/5/23, 4:19 PM

  • by dsign on 11/6/23, 1:54 PM

    Let's call this what it is: streaks of totalitarianism.

    Beyond the specifics of closed bank accounts, what are we are seeing is the following pattern:

    - Government pushes regulation on banks to monitor their customers for X, Y, Z

    - Banks, on behalf of the government, collect data on individuals for X, Y, Z.

    - When banks are not satisfied, they either de-bank their customers or file a report with the government.

    Banks, which are supposed to work for their customers, instead end up being coerced to watch their customers on behalf of the government.

    Because more and more transactions are digital, the net result if that the government has found a new venue for (totalitarian?) surveillance of almost all economic transactions of their subjects. Back in the day, the KGB would have dreamed of having something like this.

    Of course, one needs to live to see how bad it will get, and if people will get more accustomed to holding cash[^1] in a hidden safe.

    [^1]: Or a cash equivalent. In certain places, there is talk to make do without any cash at all.

  • by elzbardico on 11/6/23, 8:18 PM

    Banks should close accounts for administrative reasons only, with ample notice period, and give full disclosure of the reason. Balance should be made available as soon as possible once the customer present an alternative account, or he should be able to get a check.

    For regulatory reasons, only the government should be able to mandate closure and for that it should be backed by a judicial order.

    I don't fucking care about idiots mumbling about "muh, terrorism! money laundering", fuck you and your safetyism. We live in a democracy, and nobody should be punished except after a judicial procedure with ample defense rights.

    Banks regulatory requirements should stop at making sure they collect all the required information and report suspicious activity to the government. They are not in the business of policing people, investigating, judging and punishing people. They don't have this mandate.

  • by 1letterunixname on 11/6/23, 1:55 AM

    It's the intersection of Kafkaesque social credit by corporations and security theater spilling over from Snowden-revelations of government overreach by ancillary watch lists with millions of names. Have a family member who hangs out with "shady people" or live somewhere a criminal lived, and be guilty by association and discriminated against by algorithm without being aware of it and without any recourse except to waste the target's time and money with layers of bullshit. Such scoring and grading by correlation with arbitrary datapoints and secret evidence determines if a customer is treated well, charged more, or fired. "Know your customer" but entirely lacking in a human in the loop to avert significant automated harm.

    Widespread disenfranchisement risks a quiet, at first, socioeconomic apartheid, instability, and more homeless people.

    The root cause is the oligopolic concentration of power by too few corporations and regulatory capture leading to little-to-no oversight to civically murder or banish a person arbitrarily.

    A number of potential remedies include:

    1. Decentralization (credit unions, breaking up corporations that are too big)

    2. Regulation (antitrust, consumer protection, and algorithm standards)

    3. Public utilities for essential services (postal banking which already occurs partially in the US with money orders)

    Closely-related book Three Felonies A Day: How the Feds Target the Innocent by Silverglate.

  • by gainda on 11/6/23, 8:53 PM

    i worked in the field for seven years and saw some of this firsthand. i was the guy at the desk making the call and relaying the bad news from the back office. it always seemed deeply unfair & quite rich seeing as almost all of these institutions are busted for far more egregious behavior than what they suspect of the customers they de-bank.

    one additional scenario that always stuck with me as to how wacky banks can stretch their power: i had a woman who had her own sole-owned accounts, a joint account with her mother, and her mother had her own accounts. the mother had overdrafted her sole account a few hundred dollars, and per the bank agreement, they took money from the joint account & the daughters sole-owned account to offset the balance. she was completely blindsided & distraught once it all became clear as anyone would be. how is that fair? this was in 2015. hopefully things have changed.

  • by jmyeet on 11/6/23, 1:20 AM

    Here's what companies are trying to do: replace people with "AI". Why? Because people are annoying. They demand wages, breaks, medical care and so on. Of course what happens to companies when there's no one left being paid to afford their services never enters the picture.

    Here's what companies should be doing: using AI to easy the work of their workers.

    What's the difference? Well, in this case, closing an account is a serious action. It should always require human review. Mistakes do happen. Bugs happen. So, automated systems should simply allow one person to review many more accounts and/or to require less time to review such actions.

    Companies should always be responsible for the consequences of these automated actions including all damages plus punitive damages. Want to know how this can go (and has gone) horribly wrong?

    Hertz had an automated system that was falsely reporting rental cars as stolen [1]. People were charged and spent time in jail for this (eg [2]).

    This should never happen. Any police report like this should require human review where the human is responsible for the consequences of that. Automated system or not, Hertz made false police reports. That's a crime. Or it should be if it isn't.

    We are rapidly heading towards a dystopian future where ordinary life is impossible and nobody knows why because none of these systems explain why you're being imprisoned and your money has been seized.

    [1]: https://www.npr.org/2022/12/06/1140998674/hertz-false-accusa...

    [2]: https://www.cbsnews.com/news/former-marine-arrested-charged-...

  • by gadders on 11/6/23, 10:26 AM

    Has anyone got a copy of that Stone Toss rolling boulder cartoon?

    People were happy when it was only "fascists" getting debanked but now it's happening to normal people they don't like it.

    Wait until it starts happening to everyone that attended a pro-Palestinian rally.

  • by Spare_account on 11/6/23, 10:08 AM

    >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?

  • by robbywashere_ on 11/5/23, 7:10 PM

    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?

  • by okokwhatever on 11/6/23, 12:13 PM

    Banks business is not people anymore. It's quite easy when you understand the business of small cash operations are not attractive for the industry and also fintech has been the new player since a decade managing mostly every transaction online. The situation is gonna be weird whenever CBDCs are gonna be imposed and the ban will be executed by the government. Good luck with your complains to the gov.

  • by linusg789 on 11/5/23, 6:26 PM

  • by Kalium on 11/6/23, 5:19 AM

    > “And in this scenario, you can’t really negotiate,” he said. “You aren’t talking with a person who has the power to tell you what went wrong and what didn’t go wrong.”

    I find this one of the most telling bits of this entire article. It says the quiet part out loud - people are often not looking purely to understand. People want information so they can negotiate, reason, or argue with the decisions.

  • by pjmorris on 11/6/23, 2:10 AM

    I moved from <large national bank> to a local credit union back in ~2007 and remain glad I did for an ever renewing fountain of benefits, rooted in separation from the class of large national banks.

  • by rosmax_1337 on 11/6/23, 11:57 AM

    Either we completely get rid of the idea that everyone has a bank account which they use for everyday transactions, going back to cash as default. Or we guarantee everyone an account which can not be closed for any reason whatsoever, at a state run bank. What we have right now, is untenable and a true sign of a society which has lost it's bearings completely.

    A bank account nowadays is not some kind of privilege which can only be granted citizens which hold the correct political beliefs and have never upset whatever stupid algoritm they have in place to check for "money laundering". A bank account nowadays is simply a modern prerequisite.

    Let me be clear, if the bank "freezes" someones account, I think they are in moral right to use violence against bank officials in self defense. The bank has attacked the individual in a meaningful way, akin to digital sabotage, but way worse.

  • by pauldenton on 11/5/23, 5:36 PM

    https://youtu.be/B9IrNcv_OdM Nigel Farage brought a lot of attention to the Debanking scandal

  • by DoingIsLearning on 11/6/23, 7:11 AM

    > According to Thomson Reuters, banks filed over 1.8 million SARs in 2022

    > The algorithmically generated alerts are reviewed every day by human employees.

    At 1.8M reports either banks employ an army of reviewers or there is fuck all of a review.

    > or wire transfers with banks in high-risk countries.

    Sounds like something ripe for discrimination against immigrants.

  • by euroderf on 11/5/23, 5:26 PM

    Someone's social credit score went negative, for no comprehensible reason.

  • by patwolf on 11/6/23, 1:28 PM

    I do wonder if the problem lies with the banks or with the amount of federal regulation that makes certain customers unattractive.

    I had a small business bank account, and one day I got a call from the bank asking to go through my transaction list and provide explanations for all the transactions. Fortunately they didn't close the account, but given the fact that it was costing them to investigate my account, it did make me wonder if they would have closed it if it wasn't profitable enough.

  • by egberts1 on 11/6/23, 11:20 AM

    Only an idiot savant would say "let's add AI to the banker's automated decision making process of rejecting a customer".

  • by pard68 on 11/6/23, 12:09 AM

    Get an account with a FCU. Not saying it'll solve this out right, but it's nice to be a human and not an account number.

  • by rafaelero on 11/6/23, 12:23 AM

    Buy Bitcoin.

  • by dandy23 on 11/7/23, 10:31 AM

    It's funny how the banks say the reason is that they must know their customers, but they clearly show they do not.

    They probably know equaly bad the customers whis accounts they do not close.

    Both banks and the banking regulation is a joke. They could certainly do some more manual verification of suspected cases to clear out the obvious mistakes, but they only care about the bottom line and to not be fined.

  • by cft on 11/5/23, 5:25 PM

    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.

  • by irusensei on 11/6/23, 9:58 AM

    Even if you are one of those people who thinks surveillance is okay to prevent crimes, wouldn't it make sense instead to tip the authorities and silently watch the transaction patterns until an actual crime is proven and its structures dismantled? Who thinks is the right thing to ban criminals to financial systems like cryptocurrencies where tracking is difficult?

    Banks obviously! Crime and corruption departments are costly. If you are an actual millionaire they will make a 40 pages report on your political views before kicking you but if you are a small customer paying rent that happens to have a funny name or withdraw cash too frequently its better to just kick you out of the platform... and have you talk to the algorithm.

    Think of it. If government wants to efficiently catch financial crimes they can instead setup a digital-nomad-crypto-friendly-bank-with-minimal-kyc-plus-eresidency-and-offshore-companies and just follow the money. I suspect this will be a lot more efficient than the current framework.

    Banks are locking the capacity of an individual or group of people to interact with society and their access to basic living needs while making a mockery of the concept of innocent til prove guilty we built our societies on. The burden to prove you are not a criminal is on you.

    And while vast majority of people are vocal against xenophobia and racism when its the banks ruining someone life because they have the wrong passport color some people will applaud and justify the systems protecting their sweet homeland from dirty barbarians from the east and south.

    But even if you think AML laws are a force for good you need to agree this whole situation is very fucked up. I'm normally very against regulation but bank accounts in current digital society should be granted as a basic right.

  • by zb3 on 11/5/23, 11:18 PM

    AML laws do more harm than good.

  • by averageRoyalty on 11/6/23, 4:45 PM

    > Instead, a vast security apparatus has kicked into gear, starting with regulators in Washington and trickling down to bank security managers and branch staff eyeballing customers.

    Despite the article and the comments, this isn't an American thing. There are stories on line that are near identical to these from all over the world.

  • by ultrahax on 11/7/23, 8:30 AM

    Citibank did this to me. Venmo'd my architect for some work he was going on my house, kablammo, account closed, no notice. Was just lucky it was an account set up specifically for work on that house and not my that's-where-my-paycheck-goes account.

  • by AnonCoward42 on 11/6/23, 10:08 AM

    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.

  • by tmaly on 11/6/23, 3:22 AM

    "Multiple SARs often — though not always — lead to a customer’s eviction."

    Justice is never applied evenly.

  • by lacrimacida on 11/6/23, 1:54 PM

    This could easily kill small business in favor of big players. Let’s not accept the status quo here. Banks should be only allowed to close accounts with proper investigation and transparency, not rely on some dumb algo or poor thought out process.

  • by xyst on 11/6/23, 12:54 AM

    > Banks dislike any patterns that look like scams and will shut down behavior that seems suspicious.

    Yet, Chase did not do anything against Bernie Madoff for decades [1]

    https://www.reuters.com/article/us-jpmorgan-madoff-deal-idUS...

    central banks suck. rich get the benefit of doubt. everyone else gets rugged capitalism treatment.

  • by cobbaut on 11/6/23, 9:28 AM

    I didn't get de-banked, but did have my card blocked by the bank once, so since then I have two banks, and use them both about equally. So if there is a problem with one bank, then I can still get food and stuff.

  • by AndyMcConachie on 11/6/23, 5:58 AM

    Banks deserve nothing less than multiple molotov cocktails through their windows.

  • by bratbag on 11/7/23, 8:06 AM

    My personal experience of this is that you can have direct, hard evidence of someone commiting fraud, and they will still jump on social media screaming that they are being persecuted.

  • by ticviking on 11/6/23, 2:30 PM

    “We must know our customers” The bank will take any approach other than having an account manager who knows each customer individually.

    This is the biggest reason I make it a priority to bank locally and in person.

  • by RagnarD on 11/6/23, 2:09 AM

    Are account balances stolen along the way? How do people get their funds out?

  • by cryptoegorophy on 11/6/23, 1:41 AM

    Not a severe example but my card gets flagged constantly for supplier doing a small under a dollar refund. No matter what notes they put on their back end it still triggers it.

  • by system2 on 11/6/23, 7:39 AM

    I always have cash money on the side just in case this happens. Have at least 3-4 months surviving cash because you never know who will do what.

  • by meisel on 11/5/23, 4:22 PM

    Do they just lose all their money in those accounts?

  • by krick on 11/6/23, 1:04 AM

    Is this about USA, or does it happen, like, in EU?

  • by norswap on 11/7/23, 1:56 PM

    Haters gonna hate, but crypto solves this.

    Recent events show even in our liberal democracies, governments can't be trusted with the power they already have, and the enormous power that technology does and will afford them.

    (The most salient example is the Trudeau government freezing the bank accounts of trucker donators.)

  • by nonford150 on 11/6/23, 3:25 PM

    Exactly why I use multiple financial facilities and keep a good amount of cash on-hand.

  • by nubela on 11/6/23, 2:15 AM

    What can entrepreneurs do about banking alternatives? (Don't mention cryptocurrency)

  • by maxslch on 11/7/23, 12:11 PM

    banking simply shouldn't be in the hands of the rich, corporate and lawyers. Bitcoin solves this.

  • by uconnectlol on 11/7/23, 3:18 PM

    why would a bank just close your account because of a false positive

    i read through most of the article and could not find discussion of such an obvious question

    do you get to re-open your account after they realize they're wrong? does this actually affect credit scores? big if true. i realize this is probably just a bug due to security theater with unwillingness to fix the bug being part of the security theater.

    we already knew the bank polices every single transaction we make (which is absolutely intolerable and should be illegal, along with most of the credit system which is also just surveillance), but closing accounts in any meaningful way would be new.

    and this is another dipshit article that doesn't actually even name the problem. instead they point to unprovable discrimination as usual. NO. the problem is that what someone does with their money is a private matter, like none of your fucking business. there wouldn't be any discrimination if the bank just was a real product and not a one sided """relationship""" which is just code for "we shove our noses into every transaction you make for your own good, loser".

    what i imagine is that in actuality what actually happens is you have to do a bunch of annoying phone calls and "security" crap like going on a website and doing captchas, receiving 6 digit codes through SMS, whatever new security theater fad is current like spinning around in front of a camera, etc then you get your account re enabled.

  • by TacticalCoder on 11/6/23, 12:48 AM

    > The goal is to crack down on fraud, terrorism, money laundering, human trafficking and other crimes.

    Estimated yearly cost of KYC/AML worldwide: $180 bn. Money actually frozen (frozen doesn't even mean it's going to eventually seized): $12 bn. 15x less. Complete, total and utter failure.

    Basically these KYC/AML rules are profoundly unjust and overwhelmingly only affect honest people who did exactly nothing wrong.

    The situation is so bad that there even the EU is now trying to rectify things a bit.

    Here's a recent article I read (in French):

    https://paperjam.lu/article/liste-contacts-ouvrir-compte-b

    The article says this:

    "ABBL a échangé avec la Commission de surveillance du secteur financier (CSSF) pour que la réglementation AML/KYC s’applique de manière proportionnée, en conformité avec les textes. L’obligation de diligence variera dans son intensité selon les risques effectifs que peut représenter une structure."

    Basically: discussions are ongoing to make sure banks use proportionated KYC/AML rules and all the while staying within the letter of the law.

    For the situation has gotten so out of hand that it's an issue for startups and individuals trying to open bank accounts and it's beginning to have a noticeable effect on the economy.

    Basically 180 billions, worldwide, burnt yearly in nothing productive: only pointless administrative work. It's not helping poor people. It's not helping the economy. It's helping nobody. It's leeches leaching all the while making everybody suspicious and scared that their accounts are going to be closed.

    An example: the association of parents at my kid's school wanted a bank account. We're talking about a non-profit with a yearly budget of few thousand dollars. Due to crazy KYC/AML they couldn't.

    That is not "proportionate". And some of the demands were likely not in accordance with the law.

    For example I've had sites, to verify my identity, which asked me to film myself while speaking (AirBnB "conciergerie" / high-end thinggy IIRC. Not sure but that "videos of yourself talking" happened to me on several sites).

    I'm not sure that the EU directives regarding KYC/AML allow the collect of information including videos of people talking.

    When speaking about things needing to stay proportionate, I've had a notary ask me to trace the source of funds up until 2014. Seriously WTF: there should be a limit as to how many years they can go back in time.

    I bought an apartment in 2001 and I now want to sell but I'm concerned because I don't have any trace of the money anymore: it's from nearly a quarter of a century ago. I'm concerned that, before the sale, the notary (who's forced to snitch btw) is going to ask me the source of the funds used to buy that apartment in 2001 (nothing shady: I was writing computer books but I don't have any trace of any royalties payment. I don't even remember through which bank I bought it).

    Another example: I did cancel a private insurance. All that was needed was a proof I moved to another country. Or so I thought. They gave me the full KYC/AML... For cancelling an insurance! Why? I take it because I moved and went living to another EU country: if you move from one country to another, you automatically become someone suspicious.

    Now where it becomes really vicious: these KYC/AML always go back further and further in time but banks do not allow you to go back more than 8 or 10 years (when you want to check older statements). They then bill you hundreds of EUR, per account, per year, to give you your older bank statements. Which is adding insult to injury: the very same clique that is making your life miserable with KYC/AML is making money for the very bank statements they're asking (well, technically it's bank B asking your statements of bank A... But for another person it's going to be bank A asking that person's statements at bank B).

    It's so bad I now have a Git-versioned folder only for KYC/AML with proofs of everything. Any wire transfer of more than 10 K EUR I now save and archive for posterity.

    Another big issue is that none of this KYC/AML nonsense is centralized: so you basically have to do the same fucking paperwork for your insurance, banks, brokers, notary, etc.

    Fuck KYC/AML. Just fuck it. This horrible, pointless waste of time and energy is bane of my existence and needs to die.

    These laws/rules reflect the sick mind of those who wrote them and those who voted them (and they're badly failing at actually freezing and seizing drug/terrorist/trafficker' money).

  • by Night_Thastus on 11/6/23, 7:37 PM

    These kinds of experiences are exactly why I stay with a small, local credit union.

    No bullshit fees. I can get to a real person quickly. No stupid algorithm running in the background ready to banish me the moment something unusual happens.

    There are legitimate reasons to use a bigger bank, but I'd wager that for 90% or more of people, a credit union would be a net improvement.

  • by actuallyrizzn on 11/6/23, 9:53 PM

    Chokepoint 2.0.

  • by moss2 on 11/6/23, 9:28 AM

    USA - The Land of Freedom (from having any rights)

  • by tock on 11/6/23, 11:47 AM

    Reminder: popular stablecoins like USDT, USDC all have something called a blacklist in the contract using which they can block you address.

  • by petermcneeley on 11/5/23, 10:47 PM

    If only there was a means to transact money digitally without the need for an interstitial.

  • by darawk on 11/5/23, 8:58 PM

    If only there were some sort of technological method for disintermediating banks without sacrificing their advantages.

    Ah well, nevertheless.

  • by advael on 11/6/23, 12:24 AM

    I'm somewhat surprised no one here views this as an automated decisionmaking problem

    It's increasingly clear that automating important decisions like this is causing a lot of harm while removing most forms of recourse available to those affected. Coupled with the way automated decisions are used to perform and then launder fraud on a massive scale, maybe we should target laws at the automation itself: Require decisions made by automated systems of any kind to be auditable and explicitly define what human is held responsible and what remedies can be applied

  • by wolverine876 on 11/5/23, 5:08 PM

    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.