Comment by alexey-salmin
1 year ago
I haven't seen any proof that it's a basic feature of bank accounts.
Some specific services (checkbooks, embossed and offline-chip cards, visa/mc acquiring) can require a credit-worthy account, but these services can be denied without denying the account itself.
Does your envisioned product allow someone to direct deposit a paycheck? Then congratulations, it is a credit account, because a) we expect to spend paychecks including very soon after receiving them but b) payroll companies sometimes screw up payroll and can in some cases pull the money back.
Can you reference a law saying that the bank is obligated to force an overdraft on a non-overdraft account when the transaction is reversed? This was a screw up by neither the bank nor their client, I see all reasons to bounce it back and let the wrong party figure it out. Furthermore I saw that exact case IRL in another country and the payroll company had to settle it with the employee (not with the bank) in court.
I understand that US banking can be very different here but neither googling nor chatgpt was able to provide any specific proofs.
Some people claim online that a bank can never refuse an ACH transaction but it's obviously false, they do it easily when the account is closed, blocked or overdrawn beyond a certain limit.
This is in the article.
https://f16c0eccd54007287fb794f9a3d05f2a.cdn.bubble.io/f1698...
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Allowing payroll companies to pull money back is a design choice, not an immutable fact of nature, as is pretending to clear instantly. Other choices are possible. (Obviously not crypto nonsense; RTGS settling in <3 days is boring, mainstream bank plumbing in many countries. You know this)
It is the design choice of the system we have now. The post doesn't claim that it is the only possible design choice. The post doesn't even claim that the banking system was never weaponized for political reasons; it makes clear that has in fact happened. What it is at pains to point out is that the complaints of crypto-magnates about the system being recently weaponized against them are dubious, because their complaints center around longstanding properties of our system that other businesses routinely trip over.
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