Comment by _fat_santa
1 year ago
I get why this is insane but I also get why the law is there which leaves me in a wired spot. Part of me wants to say something along the lines of "make SAR's disclosable / viewable to American citizens or legitimate users" but you can't really do that because the bad guys will quickly exploit any escape hatches like this.
What do others think about this? Because I'm kinda stuck in the middle about them.
If there is evidence against you, you surely have the right to know of it and to contest it! That's pretty fundamental to any reasonable justice system.
But the SAR itself, from how it sounds in the OP, is not the trigger that makes a person/business unbankable across the entire banking system - only at that single bank.
The OP article makes a reasonable point that administration officials can and do exert pressure on banks to withhold services to certain industries like debt collectors. And there indeed is a slippery slope there, and one that VCs with significant exposure to crypto are motivated to highlight.
But “withholding evidence,” and the SAR secrecy specifically, doesn’t seem to be a mechanism by which that happens. I’m far more concerned with what might cause an individual to lose access to all banks than what might cause them to lose access to one.
We are headed towards very few monolithic banks in the near future. I imagine that if one debanks a client, they will all do so for the same reasons.
You have no right to a banking relationship, so there is no justice involved.
It's not scary until everyone stops accepting cash.
Maybe that was a true when a bank was a private business and you could reasonably live without it. Today they are effectively a branch of the government and your life would be seriously impaired.
For example, where does your employer setup direct deposit? How do you apply for a mortgage and demonstrate assets?
If society relies on technology then you need it to participate. Yes you can still breathe without access to transportation, but you can’t work in the economy. In 1940 car or bus access was a luxury because normal people got along fine without one. That’s why it’s misleading to say increasing car access is an better standard of living. It’s actually an increase in the cost to participate in life.
So yes banking must be a right. Or alternatively we could strengthen cash rights (reduce technology) with legal protections to qualify for loans, etc. But that won’t happen.
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It can be incredibly stressful even right now. I had my bank freeze my accounts because they believe I deposited a fraudulent check (I hadn't). They were incredibly unhelpful during the entire process necessitating hours on hold, going to the branch multiple times and eventually they threatened to close all my accounts. Took about a week to get sorted while I had no access to my funds, including direct withdrawal bills like my mortgage payment.
And you are correct... I had no rights. They had all the power, and they knew it and acted accordingly.
It is already scary, many governments mandate that large purchases are only made through the banking system. Not to mention the private-sector pressure (how do you get paid for work?).
But then we have to pay taxes on any amount of cash money above ~650 EUR in the Netherlands. They WANT to steer us towards cash-less, and MANY shops in the Netherlands have already stopped accepting cash. It's where we're going - ultimate control. No right on banking, but also it's a necessicity soon. So.... Too bad?
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Countries in EU have a hard limit on cash transactions. Buying a car for over a few grand and it has go through bank. Renting a flat, even if you pay monthly, the tax man considers the whole duration as one big business deal, so the rent has to go through a bank
Which is the root problem, and the solution is a constitutional amendment guaranteeing an inalienable right to an electronic money account one can send and receive money from.
“Banks” don’t really have a point in a cashless society (the government can operate a database just as well), but it seems the government wants to the ability to persecute selected people or populations with plausible deniability. So they use the ability to get banned by big business as a proxy.
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But debanking is not a criminal charge. The US has thousands of banks, surely one of them would take your business.
You’ve stipulated that the debanking was ok but that not disclosing why was problematic?
How about this:
1. Corporations are highly regulated legal constructs. Being given an extraordinary right (immunity for shareholders) they should be expected to return significant value to society. I propose that value should be “lack of freedom of association” - eg I don’t think corporations should be allowed to stop doing business with, or refuse to do business with, anyone citizen, except after conviction in a court of law for behavior directly related to that business.
2. Government should not be able to use their secret monitoring to prevent anyone from doing anything. No lists, secret orders, etc. If government wants someone debanked, take it to court.
Finally, if corporations can’t debank people, how do they handle unusual cost/risk? With pricing, of course. If porn and crypto transactions pose extraordinary financial risk, then allow pricing based on actual financial risk.
>Finally, if corporations can’t debank people, how do they handle unusual cost/risk? With pricing, of course. If porn and crypto transactions pose extraordinary financial risk, then allow pricing based on actual financial risk.
And you're absolutely certain that powerful and vocal crypto people won't claim that this special pricing is discrimination as they're doing now with debunking ?
Look at the mortgage and credit card markets.
Most lenders don't discriminate via pricing - they accept or deny individual applications. The market discriminates via pricing, as higher-cost providers are willing to loan to customers who pose more significant credit risks.
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> I don’t think corporations should be allowed to stop doing business with, or refuse to do business with, anyone citizen, except after conviction in a court of law for behavior directly related to that business.
I would quit contracting on the spot if that became the law.
Some clients deserve to be fired or avoided.
Don't incorporate. Make an LLC.
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The middle ground seems to be allowing SARs (which are analogous to tips to police officers), but not requiring banks keep them secret from the customer. The bank could decide to do so, but also could decide not to, like any other speech.
What is the incentive to divulge the information if they don't have to? Customer service? "We're the one bank that will tell you why we are dropping you as a customer"?
Probably some amount of customer service. Banks are at their distrection then on whether they want to tell you or not -- just like for any other reason for dropping you as a customer.
I guess more important than empirically whether banks tell you, it's that it should be their right to tell you if they want.
You should see the rules about discussing SARs you are asked to respond to, as an employee of a bank, with your colleagues and managers...
When a case is brought to court, they have to outline the methods used to determine the perpetrator. Why is it okay to do that for things like murder and other crimes but not for banks?
SAR's can be discussed when criminal charges are filed.
The most famous case I know of that stems from a publicly available SAR is former Speaker of the House Denny Hastert (R-Il) after his retirement from the House, when he was a lobbyist. He was being blackmailed by someone for his previous sexual assaults from his days as a high school teacher and wrestling coach three decades earlier, before he went into politics. He went to a bank to withdraw a bunch of cash to pay his blackmailer, and the bank started to fill out the form they do whenever you withdraw over $10,000 in cash (not a SAR, just a regular form). He saw the form being filled out, and decided he didn't want a paper trail with the government showing he was being blackmailed. So instead he stood in line hundreds of times at the bank, withdrawing $5,000 each time. This was why a SAR was filed, because he was clearly doing something called "structuring" which is setting up transactions deliberately to avoid those disclosure rules. After the FBI investigated, they decided that they couldn't get him for child sexual abuse, because it had been so long ago that the statue of limitations had expired. But they could get him for structuring, to which he plead guilty and served 15 months in jail.
Besides the fact that knowing about when they are filed would tip off criminals, there is also the fact that oftentimes they are filed for perfectly innocuous reasons, and are never investigated and don't go anywhere. Not ideal to have publicly available "this guy did something suspicious" flags that have not been investigated further looming over you and haunting the rest of your life. Since SAR's are not shared with other financial institutions, they won't follow you the same way.
The law seems to be punishing people based on secret judgements over sealed "non-accusations".
Sorry, but no, I can't see why a country would want a law like this.
Honestly, my country had a dictator impose a Constitution that made sure every person had access to banks over 200 years ago (we haven't had a democracy at that point, but nobody even discussed it since, because nobody disagrees). I also can't understand how come the US treats that system so frivolously.
This is all tied to the war on drugs and laundering of drug money (post-9/11 it become about terrorism as well, but again, more on drug money being funneled into terrorist groups)
There are enough people in the US that think that the mere existence of drug users is an indictment of society, so any action taken to limit the ability of people who sell drugs is justified. You also see this with asset forfeiture laws.
So the reason these laws exist is the people against drugs, unable to see that the war on drugs has been lost for over 20 years at this point, want to impose more and more draconian restrictions around them which just fuels the power of cartels and criminal gangs selling drugs.
If the war on drugs worked then why can you get them in every high school and prison in the US?
You fight money laundering by letting people use the banks, have the banks record everything, and using the records on court to get the money back.
You may have something about limiting international transfers, but forcing people out of the banks is contrary to the goals of a criminal investigation.
> What do others think about this?
Stop with the Al Capone, totally dumb, angle: instead of arresting him for his actual crime, they arrested him because he didn't pay his taxes. Something dumb like that. And everybody applauds as if it was so brilliant. It's not.
What I think is: arrest people for the actual crime they commit... and leave honest people the fuck alone.