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This is a bunch of nonsense. Actual banks are corporations like Facebook and they're far scarier.

toomuchtodo 7y ago
Banks are heavily regulated [1]. Facebook is not. EDIT: If Facebook wants to come to the finance party, I welcome them accepting the regulatory burden imposed by federal regulators and the finance industry itself. Disclaimer: I work in financial services, specifically interfacing with regulatory bodies. [1] https://www.fdic.gov/regulations/laws/rules/ https://www.fdic.gov/regulations/laws/rules/ (Example FDIC Laws, Regulations, and Acts, none of which currently apply to silicon valley corporations, but all of which apply to banking institutions)
- staunch 7y ago
  Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. The banks own the regulators. If regular people can just have a safe place to keep their money, without being actively exploited, that would be a huge improvement.
  - toomuchtodo 7y ago
    You will need to construct a more targeted argument than, "All banks bad, all banks hurt people". The majority of Americans store their money in banks safely (and while the unbanked and underbanked is a huge problem, it is out of scope for this comment), protected either by FDIC insurance (banks) or NCUSIF (credit unions). The majority of banks behave responsibly (I don't work at BoA, Wells, JPMC, or someone else who has committed fraud). You don't even have to use a bank! That is what your local credit union is for [1]. Some banks have behaved badly. All cryptocurrency is a scam (see: SEC ICO determinations, outright ICO/token fraud, etc). With fiat, you have recourse with regulators and the legal system. With crypto, you have none ("oops! someone cloned your SIM and you've lost your entire nest egg. better luck next time!"). Your arguments don't make the case for cryptocurrencies; you make the case for more regulation and oversight of the banking and financial services industry (which I agree with entirely, not because it's my job, but to keep the hard earned assets of banking customers of all income and asset brackets safe). [1] https://www.mycreditunion.gov/about-credit-unions/credit-union-locator https://www.mycreditunion.gov/about-credit-unions/credit-uni...
    - shadowfiend 7y ago
      You will need to construct a more targeted argument than, “All cryptocurrency is a scam” if you want others to construct more targeted arguments than “all banks bad” (the difference being you had to paraphrase GP, while I got to directly quote you). Cryptocurrency is infrastructure, while you are arguing against it as a replacement for all players in the current financial system. I would argue that's a shortsighted and under-informed perspective.
      - toomuchtodo 7y ago
        https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/ https://www.wired.com/story/theres-no-good-reason-to-trust-b... (Bruce Schneier: There Is No Good Reason To Trust Blockchain Technology) https://www.dailycal.org/2018/03/09/father-internet-vint-cerf-speaks-bitcoin/ https://www.dailycal.org/2018/03/09/father-internet-vint-cer... (Vint Cerf: "In addition to discussing the history and advancement of internet technology, Cerf talked about cryptocurrency. When asked about bitcoin, Cerf said his first response was to “run the other way.” On the topic of blockchain, he struck a more moderate tone but cautioned about its applications.") https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on-blockchain-despite-having-most-patents.html https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on... (Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it) https://www.fnlondon.com/articles/breaking-the-blockchain-major-projects-shelved-as-hype-fades-20180911 https://www.fnlondon.com/articles/breaking-the-blockchain-ma... (Breaking the blockchain: Major projects shelved as hype fades) https://www.bloomberg.com/news/articles/2019-05-29/blockchain-settlement-was-slow-costly-in-trial-weidmann-says https://www.bloomberg.com/news/articles/2019-05-29/blockchai... (Bundesbank: Blockchain Settlement Was Slow, Costly in Trial, Weidmann Says: “The blockchain solutions did not fare better in every way: the process took a bit longer and resulted in relatively high computational costs,” Weidmann said in Frankfurt on Wednesday. “Similar experiences have been made elsewhere in the financial sector. Despite numerous tests of blockchain-based prototypes, a real breakthrough in application is missing so far.”) Distributed ledgers, blockchain, and cryptocurrency are solutions looking for a problem, overly complicated and underperformant infrastructure. They attempt to solve for trust with technology solutions in a world governed by human regulation and legal frameworks (which always take precedence). A database will work just fine. Everything else is snake oil.
  - navigatesol 7y ago
    >Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. I can agree with the fact that some of the bank fees for such services are ridiculous, but how is a customer using their overdraft or bouncing a check the bank's fault? How is it "stealing"?
    - toomuchtodo 7y ago
      In the case of overdraft fees, over 30 banks were ordering transactions in a punitive way, charging up to six overdraft fees per day, and not providing a way to decline charges when an overdraft (and related fee) would result. It also resulted in the Federal Reserve instituting overdraft protection regulations in 2010. It was predatory, plain and simple, and hundreds of millions of dollars in collective fines were paid. https://www.seattletimes.com/business/chase-reaches-settlement-to-pay-110-million-in-overdraft-fee-case/ https://www.seattletimes.com/business/chase-reaches-settleme...
    - pault 7y ago
      Ordering transactions from large to small so you are hit with the maximum number of penalties. It can easily end up costing you many multiples more than ordering chronologically.
    - xrd 7y ago
      Do a Google search for Wells Fargo and overdrafts.
  - lurker458 7y ago
    Facebook is not even a safe place for your cat pictures. Why would they do a better job when it comes to your money ?
- camjohnson26 7y ago
  At best regulations act as a moat keeping competition away the entrenched banks. As soon as the government comes up with rules the smart people at the banks find a way to get around it and make money. Startups don’t have the legal expertise and can’t compete.
  - jakelazaroff 7y ago
    If that's the case, why do banks consistently push to loosen regulations? Can you point to an instance of banks lobbying for increased oversight and restrictions? Making a bank should be hard. I don't want some unknown startup to come in to "move fast and break things", because "things" in this case means "people's savings".
    - camjohnson26 7y ago
      Well there’s the CEO of Bank of America saying “Dodd-Frank is fine, None of us are trying to touch it”. The big banks could push a lot harder against regulation than they do. https://www.economicclub.org/sites/default/files/MoynihanExcerpts.pdf https://www.economicclub.org/sites/default/files/MoynihanExc...
  - sp332 7y ago
    Regulations can raise barriers to entry. But "at best", banks haven't just gambled away all the deposits leaving customers with no recourse lately. Wells Fargo has been defrauding a lot of people, but at least they're paying billions in fines for it. It's not enough to keep them from doing it I guess, but I'd argue that fewer regulations would probably make that situation worse and not better.
    - camjohnson26 7y ago
      How do you know that regulations are why the banks haven’t gambled away all the money? There’s no law against me gambling away my savings but that doesn’t mean I’ll do it. There’s other incentives in the system, for example the desire to avoid an angry mob of depositors burning your bank to the ground. Some regulations are good but the ones we have are overburdensome. Even huge startups like Robinhood can’t get it right and the laws around what constitutes a security for ICO offerings are so vague that no one actually knows if they’re breaking the law or not.
- gridlockd 7y ago
  Facebook also isn't becoming a bank. If anything, Facebook is becoming a payment processor (not really, but close enough). Why trust your money with Paypal, but not Facebook? When given the choice between a monolithic corporation and some kind of cryto-based federation, why choose the former? How is any of this worse than what we already have?
elliekelly 7y ago
Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time. And I have never said a nice thing about BoA in my life. What’s scarier to me is that Facebook is deliberately and admittedly targeting the unbanked - the people most in need of a bank but also the people most at risk of being taken advantage of. I’m afraid this will be the silicon valley version of a prepaid debit card/check cashing business run by Facebook instead of Wal-Mart.
- cjslep 7y ago
  It's a whole new avenue for predatory lending practices such as payday loans, too.
- nickbauman 7y ago
  I was just thinking exactly that: this is a check-cashing "bank" that preys on the poor and disenfranchised especially.
  - gridlockd 7y ago
    Yeah, we should totally leave that business to the payday loan shacks, right?
    - nickbauman 7y ago
      Right, and let Facebook do it _at scale._ What could possibly go wrong?
- logfromblammo 7y ago
  I would stake Bank of America through the heart, bind it with chains until sunrise, vitrify the dust, and then dump the evil slag into an ocean trench, and I'd still bank there long before trusting Zuckerberg's Facebook with my money.
- gridlockd 7y ago
  > Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time Facebook isn't pretending to be bank. Facebook is pretending to be a payment processor. What's the big deal? Nobody is telling you to put all your savings into a centralized cryptocurrency, especially considering you're a US citizen with access to relatively good banking system.

Banks are heavily regulated [1]. Facebook is not. EDIT: If Facebook wants to come to the finance party, I welcome them accepting the regulatory burden imposed by federal regulators and the finance industry itself. Disclaimer: I work in financial services, specifically interfacing with regulatory bodies. [1] https://www.fdic.gov/regulations/laws/rules/ https://www.fdic.gov/regulations/laws/rules/ (Example FDIC Laws, Regulations, and Acts, none of which currently apply to silicon valley corporations, but all of which apply to banking institutions)

staunch 7y ago
Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. The banks own the regulators. If regular people can just have a safe place to keep their money, without being actively exploited, that would be a huge improvement.
- toomuchtodo 7y ago
  You will need to construct a more targeted argument than, "All banks bad, all banks hurt people". The majority of Americans store their money in banks safely (and while the unbanked and underbanked is a huge problem, it is out of scope for this comment), protected either by FDIC insurance (banks) or NCUSIF (credit unions). The majority of banks behave responsibly (I don't work at BoA, Wells, JPMC, or someone else who has committed fraud). You don't even have to use a bank! That is what your local credit union is for [1]. Some banks have behaved badly. All cryptocurrency is a scam (see: SEC ICO determinations, outright ICO/token fraud, etc). With fiat, you have recourse with regulators and the legal system. With crypto, you have none ("oops! someone cloned your SIM and you've lost your entire nest egg. better luck next time!"). Your arguments don't make the case for cryptocurrencies; you make the case for more regulation and oversight of the banking and financial services industry (which I agree with entirely, not because it's my job, but to keep the hard earned assets of banking customers of all income and asset brackets safe). [1] https://www.mycreditunion.gov/about-credit-unions/credit-union-locator https://www.mycreditunion.gov/about-credit-unions/credit-uni...
  - shadowfiend 7y ago
    You will need to construct a more targeted argument than, “All cryptocurrency is a scam” if you want others to construct more targeted arguments than “all banks bad” (the difference being you had to paraphrase GP, while I got to directly quote you). Cryptocurrency is infrastructure, while you are arguing against it as a replacement for all players in the current financial system. I would argue that's a shortsighted and under-informed perspective.
    - toomuchtodo 7y ago
      https://www.wired.com/story/theres-no-good-reason-to-trust-blockchain-technology/ https://www.wired.com/story/theres-no-good-reason-to-trust-b... (Bruce Schneier: There Is No Good Reason To Trust Blockchain Technology) https://www.dailycal.org/2018/03/09/father-internet-vint-cerf-speaks-bitcoin/ https://www.dailycal.org/2018/03/09/father-internet-vint-cer... (Vint Cerf: "In addition to discussing the history and advancement of internet technology, Cerf talked about cryptocurrency. When asked about bitcoin, Cerf said his first response was to “run the other way.” On the topic of blockchain, he struck a more moderate tone but cautioned about its applications.") https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on-blockchain-despite-having-most-patents.html https://www.cnbc.com/2019/03/25/bank-of-america-skeptical-on... (Bank of America tech chief is skeptical on blockchain even though BofA has the most patents for it) https://www.fnlondon.com/articles/breaking-the-blockchain-major-projects-shelved-as-hype-fades-20180911 https://www.fnlondon.com/articles/breaking-the-blockchain-ma... (Breaking the blockchain: Major projects shelved as hype fades) https://www.bloomberg.com/news/articles/2019-05-29/blockchain-settlement-was-slow-costly-in-trial-weidmann-says https://www.bloomberg.com/news/articles/2019-05-29/blockchai... (Bundesbank: Blockchain Settlement Was Slow, Costly in Trial, Weidmann Says: “The blockchain solutions did not fare better in every way: the process took a bit longer and resulted in relatively high computational costs,” Weidmann said in Frankfurt on Wednesday. “Similar experiences have been made elsewhere in the financial sector. Despite numerous tests of blockchain-based prototypes, a real breakthrough in application is missing so far.”) Distributed ledgers, blockchain, and cryptocurrency are solutions looking for a problem, overly complicated and underperformant infrastructure. They attempt to solve for trust with technology solutions in a world governed by human regulation and legal frameworks (which always take precedence). A database will work just fine. Everything else is snake oil.
- navigatesol 7y ago
  >Among many other great crimes, U.S. banks have stolen hundreds of billions of dollars from the poorest people through overdraft and bounced check fees. I can agree with the fact that some of the bank fees for such services are ridiculous, but how is a customer using their overdraft or bouncing a check the bank's fault? How is it "stealing"?
  - toomuchtodo 7y ago
    In the case of overdraft fees, over 30 banks were ordering transactions in a punitive way, charging up to six overdraft fees per day, and not providing a way to decline charges when an overdraft (and related fee) would result. It also resulted in the Federal Reserve instituting overdraft protection regulations in 2010. It was predatory, plain and simple, and hundreds of millions of dollars in collective fines were paid. https://www.seattletimes.com/business/chase-reaches-settlement-to-pay-110-million-in-overdraft-fee-case/ https://www.seattletimes.com/business/chase-reaches-settleme...
  - pault 7y ago
    Ordering transactions from large to small so you are hit with the maximum number of penalties. It can easily end up costing you many multiples more than ordering chronologically.
  - xrd 7y ago
    Do a Google search for Wells Fargo and overdrafts.
- lurker458 7y ago
  Facebook is not even a safe place for your cat pictures. Why would they do a better job when it comes to your money ?
camjohnson26 7y ago
At best regulations act as a moat keeping competition away the entrenched banks. As soon as the government comes up with rules the smart people at the banks find a way to get around it and make money. Startups don’t have the legal expertise and can’t compete.
- jakelazaroff 7y ago
  If that's the case, why do banks consistently push to loosen regulations? Can you point to an instance of banks lobbying for increased oversight and restrictions? Making a bank should be hard. I don't want some unknown startup to come in to "move fast and break things", because "things" in this case means "people's savings".
  - camjohnson26 7y ago
    Well there’s the CEO of Bank of America saying “Dodd-Frank is fine, None of us are trying to touch it”. The big banks could push a lot harder against regulation than they do. https://www.economicclub.org/sites/default/files/MoynihanExcerpts.pdf https://www.economicclub.org/sites/default/files/MoynihanExc...
- sp332 7y ago
  Regulations can raise barriers to entry. But "at best", banks haven't just gambled away all the deposits leaving customers with no recourse lately. Wells Fargo has been defrauding a lot of people, but at least they're paying billions in fines for it. It's not enough to keep them from doing it I guess, but I'd argue that fewer regulations would probably make that situation worse and not better.
  - camjohnson26 7y ago
    How do you know that regulations are why the banks haven’t gambled away all the money? There’s no law against me gambling away my savings but that doesn’t mean I’ll do it. There’s other incentives in the system, for example the desire to avoid an angry mob of depositors burning your bank to the ground. Some regulations are good but the ones we have are overburdensome. Even huge startups like Robinhood can’t get it right and the laws around what constitutes a security for ICO offerings are so vague that no one actually knows if they’re breaking the law or not.
gridlockd 7y ago
Facebook also isn't becoming a bank. If anything, Facebook is becoming a payment processor (not really, but close enough). Why trust your money with Paypal, but not Facebook? When given the choice between a monolithic corporation and some kind of cryto-based federation, why choose the former? How is any of this worse than what we already have?

elliekelly 7y ago

Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time. And I have never said a nice thing about BoA in my life. What’s scarier to me is that Facebook is deliberately and admittedly targeting the unbanked - the people most in need of a bank but also the people most at risk of being taken advantage of. I’m afraid this will be the silicon valley version of a prepaid debit card/check cashing business run by Facebook instead of Wal-Mart.

cjslep 7y ago
It's a whole new avenue for predatory lending practices such as payday loans, too.
nickbauman 7y ago
I was just thinking exactly that: this is a check-cashing "bank" that preys on the poor and disenfranchised especially.
- gridlockd 7y ago
  Yeah, we should totally leave that business to the payday loan shacks, right?
  - nickbauman 7y ago
    Right, and let Facebook do it _at scale._ What could possibly go wrong?
logfromblammo 7y ago
I would stake Bank of America through the heart, bind it with chains until sunrise, vitrify the dust, and then dump the evil slag into an ocean trench, and I'd still bank there long before trusting Zuckerberg's Facebook with my money.
gridlockd 7y ago
> Our banking system certainly leaves a lot to be desired but I’d take Bank of America over Facebook pretending to be a bank 100% of the time Facebook isn't pretending to be bank. Facebook is pretending to be a payment processor. What's the big deal? Nobody is telling you to put all your savings into a centralized cryptocurrency, especially considering you're a US citizen with access to relatively good banking system.