4 ms·

That'd make US law contradictory. The reason the number of unbanked keeps going up is that post-9/11 the USA kept tightening anti-money laundering requirements

That'd make US law contradictory. The reason the number of unbanked keeps going up is that post-9/11 the USA kept tightening anti-money laundering requirements. These require banks to refuse to bank with clients who they suspect might be criminals, on pain of the banker becoming a criminal themselves. That means once people fall out of the banking system for whatever reason and have to live in the cash economy for a while, they cannot prove where their income came from and are thus presumed guilty by default. To fix that you'd need to make US AML laws much less punitive. No political appetite exists to do that.

nradov 8y ago
You can prove where your income comes from by just showing a couple months worth of pay stubs. The actual reason that people are most commonly denied new bank accounts is due to bouncing multiple checks on a previous account. https://www.nerdwallet.com/blog/banking/blacklisted-by-chexsystems-what-to-know/ https://www.nerdwallet.com/blog/banking/blacklisted-by-chexs...
- gonzo41 8y ago
  God cheques are an anachronism. I can't believe they persist in this day.
  - linsomniac 8y ago
    It feels like checks are barely hanging on. I started using Simple 4 years ago when I switched jobs, partly because it seemed like more and more places were posting signs that they didn't take checks. Since Simple doesn't really have checks, except ones you have them send by using the website, that seemed ok. In the 4 years since, I've had a few instances where I needed checks. I have a plumber I like, but he isn't really a businessman, and so he wants cash or a check when he's done with work. The only tradesman I've dealt with that wasn't happy with me sending a check from Simple. He does good work though. I have some bills I pay via check, like the yearly pool membership, that I can just use Simple to send out. I've been pretty happy to not have a check book. Especially after I had a $45 check I sent someone that got stolen from their mailbox and cashed for around $2,000 each, twice at different branches of my bank. Thankfully, I noticed within a day or two, and it was only a big hassle.
    - ataturk 8y ago
      They're not--we write dozens of checks a year with two kids in school. $25 this, $50 that, music lessons, camps...
- sambull 8y ago
  Some people can. Some people being criminals will be told they forged all that.
- veidr 8y ago
  So, give them bank accounts without checks. I haven't used a check in... maybe a decade? Despite being a citizen of America, one of the few places where check's are still a (marginal, fading) thing.
ellius 8y ago
US AML laws are already contradictory in and of themselves. The problem is that they serve two contradictory goals. From a sanctions and geopolitical perspective, Washington wants to shut bad actors out of the US banking system, which means they punish banks that retain "bad" customers. But from a law enforcement perspective, typically investigators much prefer accounts be kept open, as that is effectively a running financial wiretap on a target. When you close the account, you give up on new information and potentially alert the target (a good example was that without even closing the account, Paul Manafort walked away from his Bank of Cyprus accounts after merely being questioned by a bank officer). So the contradiction exists not just between AML and other US bank laws but within AML regulations themselves. Frankly as someone who used to work in the field I found this insanely frustrating and would constantly hate that I was forced to get rid of customers who I wasn't positive had done anything wrong to protect the bank, and if they HAD done something wrong I was basically destroying law enforcement's lead and possibly alerting the target. But that's the current effect of the laws. They definitely need to be fixed not just for broader goals like banking inclusion but to effectively do what they're supposed to do in the first place.
- AnthonyMouse 8y ago
  It's not only that, the entire concept of anti-money laundering as an anti-terrorism tool is basically a farce. The anti-money laundering laws came out of domestic organized crime. After the feds got Al Capone on tax evasion the mobsters started paying their taxes but the feds still wanted to go after them that way, so the concept of "money laundering" was created from whole cloth. The problem is it never really worked once the crime bosses had an accountant on payroll. And organized crime itself was primarily an artifact of Prohibition and the Depression and has been on the decline ever since. The WoD is probably the only reason it still exists at all, but unlike Prohibition, that is international. Which means the criminals can export the money from the US as cash or precious commodities and don't have to deal with the US banking system at all. With terrorism it's even worse. If some prince in the middle east is using oil money to fund terrorism, the money is never even in the US to begin with. It's the textbook example of a law whose costs outweigh its benefits but no one wants to fix it because they don't want to look soft on drugs/terrorism.
deleted 8y ago
[deleted]

nradov 8y ago

You can prove where your income comes from by just showing a couple months worth of pay stubs. The actual reason that people are most commonly denied new bank accounts is due to bouncing multiple checks on a previous account. https://www.nerdwallet.com/blog/banking/blacklisted-by-chexsystems-what-to-know/ https://www.nerdwallet.com/blog/banking/blacklisted-by-chexs...

gonzo41 8y ago
God cheques are an anachronism. I can't believe they persist in this day.
- linsomniac 8y ago
  It feels like checks are barely hanging on. I started using Simple 4 years ago when I switched jobs, partly because it seemed like more and more places were posting signs that they didn't take checks. Since Simple doesn't really have checks, except ones you have them send by using the website, that seemed ok. In the 4 years since, I've had a few instances where I needed checks. I have a plumber I like, but he isn't really a businessman, and so he wants cash or a check when he's done with work. The only tradesman I've dealt with that wasn't happy with me sending a check from Simple. He does good work though. I have some bills I pay via check, like the yearly pool membership, that I can just use Simple to send out. I've been pretty happy to not have a check book. Especially after I had a $45 check I sent someone that got stolen from their mailbox and cashed for around $2,000 each, twice at different branches of my bank. Thankfully, I noticed within a day or two, and it was only a big hassle.
  - ataturk 8y ago
    They're not--we write dozens of checks a year with two kids in school. $25 this, $50 that, music lessons, camps...
sambull 8y ago
Some people can. Some people being criminals will be told they forged all that.
veidr 8y ago
So, give them bank accounts without checks. I haven't used a check in... maybe a decade? Despite being a citizen of America, one of the few places where check's are still a (marginal, fading) thing.

ellius 8y ago

US AML laws are already contradictory in and of themselves. The problem is that they serve two contradictory goals. From a sanctions and geopolitical perspective, Washington wants to shut bad actors out of the US banking system, which means they punish banks that retain "bad" customers. But from a law enforcement perspective, typically investigators much prefer accounts be kept open, as that is effectively a running financial wiretap on a target. When you close the account, you give up on new information and potentially alert the target (a good example was that without even closing the account, Paul Manafort walked away from his Bank of Cyprus accounts after merely being questioned by a bank officer). So the contradiction exists not just between AML and other US bank laws but within AML regulations themselves. Frankly as someone who used to work in the field I found this insanely frustrating and would constantly hate that I was forced to get rid of customers who I wasn't positive had done anything wrong to protect the bank, and if they HAD done something wrong I was basically destroying law enforcement's lead and possibly alerting the target. But that's the current effect of the laws. They definitely need to be fixed not just for broader goals like banking inclusion but to effectively do what they're supposed to do in the first place.

AnthonyMouse 8y ago
It's not only that, the entire concept of anti-money laundering as an anti-terrorism tool is basically a farce. The anti-money laundering laws came out of domestic organized crime. After the feds got Al Capone on tax evasion the mobsters started paying their taxes but the feds still wanted to go after them that way, so the concept of "money laundering" was created from whole cloth. The problem is it never really worked once the crime bosses had an accountant on payroll. And organized crime itself was primarily an artifact of Prohibition and the Depression and has been on the decline ever since. The WoD is probably the only reason it still exists at all, but unlike Prohibition, that is international. Which means the criminals can export the money from the US as cash or precious commodities and don't have to deal with the US banking system at all. With terrorism it's even worse. If some prince in the middle east is using oil money to fund terrorism, the money is never even in the US to begin with. It's the textbook example of a law whose costs outweigh its benefits but no one wants to fix it because they don't want to look soft on drugs/terrorism.

deleted 8y ago

[deleted]