Comment by alexey-salmin
1 year ago
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.
That previous comment is a "tell me you've never been declined for a financial service before without telling me" kind of thing; I had to shop for a week to find a bank that would give me a checking account.
Not sure what you mean, I got declined by a dozen of banks. And where I live (France) it's illegal for me to receive my salary in cash or to pay rent in cash: both are above the limit for cash transactions. Even if I personally was open to breaking the law, my employer and my landlord obviously aren't.
To compensate for that there's a "right for an account" law but it doesn't work that well.
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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.
I have a multi-year titre de séjour, the problem is the Russian citizenship. I guess banks don't want to figure out who's sanctioned and who's not, refusing service is safer.
The first wave of account closures in 2022 was absurdly wide and even affected some French citizens. It was a scandal that got some coverage in the news [1][2][3]. I suspect the filter was the birthplace which is known to the bank, even though some media speculated it was about names. IMO names would be insane even for a bank, however I can imagine a name being one of the inputs for an opaque ML risk-scoring model.
French citizens that I know of got their accounts reinstantiated, but foreign nationals continue to struggle to this day. There's a collective lawsuit going on but it will take years to achieve anything withhin the french justice system.
[1] https://www.lepoint.fr/societe/comptes-bancaires-bloques-en-...
[2] https://www.nouvelobs.com/entreprises/20220726.OBS61366/des-...
[3] https://www.lesechos.fr/finance-marches/banque-assurances/en...
Sounds like a case of being in the right is not enough. The law in theory prevents this kind of stuff, but it might not have done enough of a job here.
Since my wife is Russian and we have lots of Russian friends we're not blind to these checks, but in all cases they were resolved by submitting residence documents. Success rate was 100%.
Of folks that were not residents however or that did not manage to prove their residence, very few got their accounts re-instantiated. We also had a case of someone who was not able to keep their account until they stopped receiving a Russian salary.
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patio11 himself has mentioned in many podcasts that the sanctions following the Russian invasion of Ukraine may have affected Ukrainian persons or businesses as they include territory currently occupied by Russia (perhaps more so than Russian persons or businesses themselves).
Many western financial institutions simply won't keep track of who holds Nikopol or Enerhodar and will close account held by Ukrainian people or business.
(and when you think about the possibility of the account holder lying, it gets worse)
The person I replied to is in the EU where rather strict rules exist that prohibit this kind of nonsense.
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No citizenship is a major factor. For example, Syrians are a very red flag in many countries and many banks outright denies them service. If you are from North Korea, you'd be delusional to think that you can just show up at a "western" bank and walk out with a bank card.
A debit bank account is a line of credit. It effectively is a loan.
You're not participating in a good faith discussion. Yes, it is technically a line of credit but it's not the reason why you're being refused service. Overdraft risks for a personal account are small and can easily be accounted-for in the service fee or via insurance (which is the same in the end).
The reason for account closure is the fear of anti-AML laws and sanctions that have nothing to do with loans. Banks in fact love offering small loans and it's not uncommon to have your account closed while having a pre-approved loan at the same time — these are different bank divisions in action.
And in any case, turning personal debit accounts into credit accounts is not something that was asked for. I lived long enough to have used Visa Electron and Maestro cards that made most of overdraft scenarios impossible. It was the banking industry decision to get rid of them.
The entire article is about why that isn't true in the cases he's talking about.
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