4 ms·

I think it's safe to say that Amazon's ambition is unlimited at this point in time. I fully expect them to jump into commercial banking in the near future

dmoy 9y ago
So there are fairly strong regulations on what other things a bank can do. I can't remember exactly what it entails. It's possible Amazon could get around that with holding company structure or something, but I'm not sure. I agree with your general point though, maybe just not the bank part. Edit1: It's not reg W, damn I cannot remember which section describes this. There's too many bank regs in the US. Edit2: ok 12 CFR 225.21 &238.51 we're closer: https://www.law.cornell.edu/cfr/text/12/225.21 https://www.law.cornell.edu/cfr/text/12/225.21 Bank or bank holding can't own anything other than other fin, ag, or family stuff. I'm still at sure to what extent this would stop Amazon from starting their own bank. (IANAL, but this was explained to me years ago by an expert on us federal banking regulation so I have hazy memories of it) Aaaand I just wasted 15 minutes of my morning looking through the CFR on banking regulation, time to stop reading hackernews.
- arenaninja 9y ago
  There's a lot of banking regulations but Amazon has enough money to either buy an existing online solution or develop their own
  - dmoy 9y ago
    Sure I'm not saying Amazon lacks the capacity, but rather that the CFR might actually prohibit a company owning both a bank and a massive commercial retail structure, etc etc.
  - valenciarose 9y ago
    In the US, owning a bank changes the regulatory status of the entire legal entity structure. This cannot be evaded with shell companies, etc. Specifically, “any company that controls a bank” is a Bank Holding Company and is regulated by the Federal Reserve (regardless of where the controlled bank is chartered). Being regulated by the Fed is a big deal and they can and will poke around in your non-bank subsidiaries (which are, after all, assets of the Bank holding company).
    - solarkraft 9y ago
      Would it be legal to somehow partner with an existing bank / found a legally independent one with ties?
      - petra 9y ago
        Amazon is currently partnering with a bank to offer credit to some of the merchants on their platform.
    - earenndil 9y ago
      What if there's one parent company whose subsidiaries include amazon and a bank? Since "amazon" itself isn't controlling the bank, it's not subject to said regulations.
- valenciarose 9y ago
  > wasted 15 minutes I used to work in a securities firm owned by a bank holding company in a role requiring being registered as a securities principal (legally responsible to supervise). It still took me several minutes to remember which regulations to look up. Amazon doesn’t have a snowball’s chance in hell of working around these regulations with the current administration. Trump hates Bezos. With a moderate Republican in power, they might be able to lobby their way to creating the precise loophole they needed (which would require legislation).
  - superioritycplx 9y ago
    Trump will "hate" Bezos until there's a favorable deal to make. It's all a strategy. It worked with NK, it'll work with AMZN.
  - voxadam 9y ago
    Didn't Walmart try to buy itself some sort of bank back in 2006 or so? I have a vague recollection of the venture and it not going Walmart's way.
    - dmoy 9y ago
      Yup 2005: https://mobile.nytimes.com/2007/03/17/business/17bank.htm https://mobile.nytimes.com/2007/03/17/business/17bank.htm

dmoy 9y ago

So there are fairly strong regulations on what other things a bank can do. I can't remember exactly what it entails. It's possible Amazon could get around that with holding company structure or something, but I'm not sure. I agree with your general point though, maybe just not the bank part. Edit1: It's not reg W, damn I cannot remember which section describes this. There's too many bank regs in the US. Edit2: ok 12 CFR 225.21 &238.51 we're closer: https://www.law.cornell.edu/cfr/text/12/225.21 https://www.law.cornell.edu/cfr/text/12/225.21 Bank or bank holding can't own anything other than other fin, ag, or family stuff. I'm still at sure to what extent this would stop Amazon from starting their own bank. (IANAL, but this was explained to me years ago by an expert on us federal banking regulation so I have hazy memories of it) Aaaand I just wasted 15 minutes of my morning looking through the CFR on banking regulation, time to stop reading hackernews.

arenaninja 9y ago
There's a lot of banking regulations but Amazon has enough money to either buy an existing online solution or develop their own
- dmoy 9y ago
  Sure I'm not saying Amazon lacks the capacity, but rather that the CFR might actually prohibit a company owning both a bank and a massive commercial retail structure, etc etc.
- valenciarose 9y ago
  In the US, owning a bank changes the regulatory status of the entire legal entity structure. This cannot be evaded with shell companies, etc. Specifically, “any company that controls a bank” is a Bank Holding Company and is regulated by the Federal Reserve (regardless of where the controlled bank is chartered). Being regulated by the Fed is a big deal and they can and will poke around in your non-bank subsidiaries (which are, after all, assets of the Bank holding company).
  - solarkraft 9y ago
    Would it be legal to somehow partner with an existing bank / found a legally independent one with ties?
    - petra 9y ago
      Amazon is currently partnering with a bank to offer credit to some of the merchants on their platform.
  - earenndil 9y ago
    What if there's one parent company whose subsidiaries include amazon and a bank? Since "amazon" itself isn't controlling the bank, it's not subject to said regulations.
valenciarose 9y ago
> wasted 15 minutes I used to work in a securities firm owned by a bank holding company in a role requiring being registered as a securities principal (legally responsible to supervise). It still took me several minutes to remember which regulations to look up. Amazon doesn’t have a snowball’s chance in hell of working around these regulations with the current administration. Trump hates Bezos. With a moderate Republican in power, they might be able to lobby their way to creating the precise loophole they needed (which would require legislation).
- superioritycplx 9y ago
  Trump will "hate" Bezos until there's a favorable deal to make. It's all a strategy. It worked with NK, it'll work with AMZN.
- voxadam 9y ago
  Didn't Walmart try to buy itself some sort of bank back in 2006 or so? I have a vague recollection of the venture and it not going Walmart's way.
  - dmoy 9y ago
    Yup 2005: https://mobile.nytimes.com/2007/03/17/business/17bank.htm https://mobile.nytimes.com/2007/03/17/business/17bank.htm