Comment by csomar
1 year ago
I am sorry but the OP is writing a lengthy article to legitimize his claim?
Here is the point, as I see it and it is very simple: If having a bank account is a requirement to operate legally, a bank can NOT refuse any customer unless they have been barred by a court. It doesn't matter whether you are selling crypto, weed, porn or socks.
This is done in France, and many other countries by the way. The bank has an obligation to service, as your life's obligations requires such a bank account.
Pat went on a dozens of pages of non-sense to avoid this particular point explaining how the banking system work, the bank obligations and other crap. It's just a bunch of filler non-sense that doesn't address the core point.
That doesn't make any sense. As the article points out, it's akin to saying that a lender must loan to you unless they've been barred by a court. The accounts you are thinking about are all, under the hood, lines of credit, even though they don't look like that.
> The accounts you are thinking about are all, under the hood, lines of credit, even though they don't look like that.
You present this statement as though it's an immutable law of nature, rather than a design feature of the US banking system that allows them to offer an excuse for closing accounts that's convenient for those banks. (The fact that someone on HN can read about it and feel smart because they think they understood the deep reality that lesser people don't get is also a convenient design feature).
You can't make a bank account where there is no possible chance a transaction can be reversed. That's what you're asking for.
(Crypto doesn't do this. You can be taken to court and they don't care that it's decentralized and immutable and all that. That's much of the point of his writing.)
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As long as we agree that it's a basic feature of the US financial system I don't think there's much for us to argue about.
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No, it's not akin to that. You can live without loans but you can't leave without a debit bank account.
As the parent points out there's indeed such a law in France but from personal experience I can tell that it doesn't prevent the bank from closing your account without an explanation (the explanation I was given off-record was my citizenship). The law merely forces the bank to open you an account which can later be closed. So definitely the right direction but IMO not far enough.
Given that about 10% of the US has no debit bank account and they aren't dying, that seems like an exaggeration. You can walk into a paycheck cashing service and walk out with a card that can be used anywhere a credit card is accepted without ever opening a bank account. You have to pay to do so, which seems rather regressive considering it's mostly the less affluent who end up in that situation, but it's not life-ending.
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> the explanation I was given off-record was my citizenship
That seems fishy and can’t be right. The only way this would work is if you don’t have residence but not because you have the wrong citizenship.
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A debit bank account is a line of credit. It effectively is a loan.
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Since the Fed is the provider of the liquidity and also sets the rules on what is a collateral and what is not, I say yes, the bank must loan you the money as long as you satisfy the conditions of the loan.
The bank is roughly a re-seller of the Fed liquidity. They shouldn't be an arbiter of who gets to access that liquidity but rather an administrative entity that follows the rules.
That doesn't make sense. When your business account stiffs a bunch of customers who get their ACH transactions reversed, and you're insolvent, your bank has to pay off those transactions. It can't just go to the Fed and say "give me money to cover for this insolvent business".
Your bank is not in fact literally just a front end for the Fed.
It makes perfect sense because of the very bloody obvious point that your account isn't really a line of credit since you gave a full deposit equal to the funds you have available. If the bank wants to lend your money around as part of its fractional reserve process, that's their business, but opening an account with funds you expect to have access to at any time is not the same as asking for a loan. Please.
No, that's not even a little bit how a checking account works. Assume nothing moves instantaneously, everything has a settlement period, everything is reversible, and, apart from the bank's willingness to decline you for an account, none of that mechanism is ever exposed to you. You'll be much closer to the true nature of the system than your belief that, having "fully deposited" money into an account, the bank can safely assume it has custody of that sum of money.
This is the challenge Patrick is up against with a piece like this: most of his readers share the deeply broken assumption you've brought to it.
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