Comment by southernplaces7
1 year ago
It doesn't matter how it works in the background. A checking account is marketed as a bank account in which your balance matches what you put into it and unlike a formal, named loan, it's necessary for many very basic transactions of daily living for even ordinary people who participate in no business banking. Thus, being frozen out by some bullshit regulatory "compliance" nonsense or some brainless, fearful risk assessment is at a whole different level than it would be if you ere denied a loan for similar reasons.
Banks that fear risk so much should organize their checking account system better for the full range of their customers, but that requires more effort than simply unbanking people and then communicating with them through grudging hostility about the reasons why as their lives take a major hit, and then being defended for this conduct by someone who gets mealy mouthed about how checking accounts are actually loans, as if they involved a major financial favor by the bank to you as a customer.
It does matter, because it is in fact how the system works, and that system constrains banks. You can be mad at the system and prefer a different system; that's fine. But once you recognize it as the system we do in fact have, you've conceded Patrick's point.
As the article points out, when you scale this problem up to business bank accounts, losses from bad credit decisions to customers can erase all the gains from the entire commercial account line of business at a bank; in other words: to factor risk and credit out of business bank accounts, you're essentially demanding that banks be insolvent.
Checking accounts are credit products.
Yes, I can easily imagine the tears of frustration and loss that bank CEOs and Boards would have to wipe with 100 dollar bills at having to deliver a simple enough product that it doesn't "require" them to debank people arbitrarily.
Why you defend this is beyond me, but it's obvious enough as to barely be worth noting that banks can structure, package and name their checking accounts, and their customer service, in such a way that you as a user can be sure of their reliability, especially after you already fucking deposited the exact funds that you're later hoping to use into said accounts.
Call them credit products if you like, they're not the same as a loan that's given on evidence of solvency but nothing held by the bank directly.
I don't know why you think I'm "defending" anything. I'm discussing the world as it is; like Patrick, I'm making positive claims, not normative ones. That those claims happen to falsify things crypto magnates are saying is a happy accident.
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