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It’s a regulatory requirement. Banks don’t do these things just to piss off their customers.

by tc313 8y ago

projektir 8y ago
It doesn't seem to be that every bank is doing it at the same time. Outside of Bank of America, nobody seems to be doing this. There are also options to do it sanely, without immediately freezing someone's assets. The point is that a bank can randomly freeze your money, and they don't need a regulatory reason to do it.
- VLM 8y ago
  "nobody seems to be doing this" Outside of political signalling, there's only two realistic reasons: 1) The auditors told them this is the cheapest and least expensive way to become compliant with the laws. All the other options are even worse PR or more expensive. Its interesting the decision of how to remain legal was made by a 3rd party accounting consultant but ALL the pr backlash is directed at the bank. Its almost a tradition in American customer service for angry customers to take it out on people who are utterly uninvolved with the decision, from the most trivial supermarket issue to something like this. 2) For financial reasons, investigative journalism only happens to local businesses who fail to invest the correct amount of money in legacy media advertising; odd how the local business scandal of the week is always some independent retailer or contractor who doesn't pay for advertisement, never a profitable chain franchise or a car dealer who buys tons of advertising. So I pull the BoA 2018 1st quarter SEC 10-Q filing, and its RIGHT THERE on page 50, marketing expense 2017 $456M and 2018 $381M. Whoopsie. What we have here is a simple $75M extortion racket; "sure would be a shame to see this story make the front page of the legacy media no one reads anymore or believes in; we could make that PR 'nightmare' go away if you'd just pay up the $75M you 'owe' us based on last years budget". Its pretty blatant extortion in this situation. Something similar happened to Toyota WRT "unintended acceleration" IIRC a couple years back. Yeah yeah I know, no one "does" legacy media anymore, so why bother buying advertising, well, its not like they're gonna take that sitting down, they're gonna fight back. And some suit at BoA figured the PR cleanup would be cheaper than the $75M of protection money they were being charged, so ... here we are.
  - projektir 8y ago
    There's a much simpler reason that's frequently true for various commercial institutions: incompetence caused by lack of care. There is no need to give them the benefit of the doubt.
nkw 8y ago
> It’s a regulatory requirement. Really? Do you have a citation to that regulation?
- lainga 8y ago
  https://sanctionssearch.ofac.treas.gov/ https://sanctionssearch.ofac.treas.gov/ lists some of the various sources of sanctions. The regulatory parts are e.g. from the 2012 Executive Order (EO13599): All property and interests in property of the Government of Iran, including the Central Bank of Iran, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
  - nkw 8y ago
    Where in the OFAC regulations or any IEEPA type executive order is a requirement that a U.S. bank obtain proof of U.S. citizenship from an accountholder?
    - lainga 8y ago
      That's not covered. The OFAC just requires banks to have compliance programs and says that the degree and type of compliance will vary between banks, and to "ask your regulator" about it. As the other comment said, there are less urgent ways to check for US citizenship.
    - JackFr 8y ago
      The regulations don't ask for proof of US citizenship, they require country of citizenship.
- JackFr 8y ago
  https://www.gpo.gov/fdsys/pkg/CFR-2010-title31-vol1/pdf/CFR-2010-title31-vol1-sec103-121.pdf https://www.gpo.gov/fdsys/pkg/CFR-2010-title31-vol1/pdf/CFR-...
reaperducer 8y ago
It’s a regulatory requirement. Banks don’t do these things just to piss off their customers. But banks can comply with requirements without botching the process. It's just a culture of pass-the-buck, bad middle management, and a lack of investment in quality customer service. Send 'em a dodgy-looking letter and freeze the account isn't the only way to accomplish the goal.

It’s a regulatory requirement. Banks don’t do these things just to piss off their customers.

by tc313 8y ago

It’s a regulatory requirement. Banks don’t do these things just to piss off their customers.

It doesn't seem to be that every bank is doing it at the same time. Outside of Bank of America, nobody seems to be doing this. There are also options to do it sanely, without immediately freezing someone's assets. The point is that a bank can randomly freeze your money, and they don't need a regulatory reason to do it.

VLM 8y ago
"nobody seems to be doing this" Outside of political signalling, there's only two realistic reasons: 1) The auditors told them this is the cheapest and least expensive way to become compliant with the laws. All the other options are even worse PR or more expensive. Its interesting the decision of how to remain legal was made by a 3rd party accounting consultant but ALL the pr backlash is directed at the bank. Its almost a tradition in American customer service for angry customers to take it out on people who are utterly uninvolved with the decision, from the most trivial supermarket issue to something like this. 2) For financial reasons, investigative journalism only happens to local businesses who fail to invest the correct amount of money in legacy media advertising; odd how the local business scandal of the week is always some independent retailer or contractor who doesn't pay for advertisement, never a profitable chain franchise or a car dealer who buys tons of advertising. So I pull the BoA 2018 1st quarter SEC 10-Q filing, and its RIGHT THERE on page 50, marketing expense 2017 $456M and 2018 $381M. Whoopsie. What we have here is a simple $75M extortion racket; "sure would be a shame to see this story make the front page of the legacy media no one reads anymore or believes in; we could make that PR 'nightmare' go away if you'd just pay up the $75M you 'owe' us based on last years budget". Its pretty blatant extortion in this situation. Something similar happened to Toyota WRT "unintended acceleration" IIRC a couple years back. Yeah yeah I know, no one "does" legacy media anymore, so why bother buying advertising, well, its not like they're gonna take that sitting down, they're gonna fight back. And some suit at BoA figured the PR cleanup would be cheaper than the $75M of protection money they were being charged, so ... here we are.
- projektir 8y ago
  There's a much simpler reason that's frequently true for various commercial institutions: incompetence caused by lack of care. There is no need to give them the benefit of the doubt.

nkw 8y ago

> It’s a regulatory requirement. Really? Do you have a citation to that regulation?

lainga 8y ago
https://sanctionssearch.ofac.treas.gov/ https://sanctionssearch.ofac.treas.gov/ lists some of the various sources of sanctions. The regulatory parts are e.g. from the 2012 Executive Order (EO13599): All property and interests in property of the Government of Iran, including the Central Bank of Iran, that are in the United States, that hereafter come within the United States, or that are or hereafter come within the possession or control of any United States person, including any foreign branch, are blocked and may not be transferred, paid, exported, withdrawn, or otherwise dealt in.
- nkw 8y ago
  Where in the OFAC regulations or any IEEPA type executive order is a requirement that a U.S. bank obtain proof of U.S. citizenship from an accountholder?
  - lainga 8y ago
    That's not covered. The OFAC just requires banks to have compliance programs and says that the degree and type of compliance will vary between banks, and to "ask your regulator" about it. As the other comment said, there are less urgent ways to check for US citizenship.
  - JackFr 8y ago
    The regulations don't ask for proof of US citizenship, they require country of citizenship.
JackFr 8y ago
https://www.gpo.gov/fdsys/pkg/CFR-2010-title31-vol1/pdf/CFR-2010-title31-vol1-sec103-121.pdf https://www.gpo.gov/fdsys/pkg/CFR-2010-title31-vol1/pdf/CFR-...

reaperducer 8y ago

It’s a regulatory requirement. Banks don’t do these things just to piss off their customers. But banks can comply with requirements without botching the process. It's just a culture of pass-the-buck, bad middle management, and a lack of investment in quality customer service. Send 'em a dodgy-looking letter and freeze the account isn't the only way to accomplish the goal.