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So guilty whenever the bureaucrat wants you to be? Is this an actual stance that you hold?

by djbebs 5y ago

efdee 5y ago
That's pretty much what a regulator does. Using the pejorative "bureaucrat" doesn't change that.
- drdeca 5y ago
  Regardless of what you call the person, doesn’t that seem a bit on the “rule of man” side (as opposed to the “rule of law” side) ? I recognize that in the end decisions need to be made by people, but, under the principle of the rule of law, it should be feasible to understand the laws relating to your likely activities to a sufficient degree that one can determine what things won’t get one in legal trouble? (Of course, some things might be somewhat ambiguous, but, still.), right?
  - salawat 5y ago
    That is Administrative Law sadly. One of the saddest realizations of my life. Congress ceded fine-grained lawmaking to executive agencies established under statute for that purpose. It's just how it works. Regulators won't ruin your day during onboarding, unless you're not even trying to be legit. Even then, they'll evaluate where you are at, and help you develop a compliance roadmap consistent with best practices. Now if you fail to meet that or drag your feet...
Zigurd 5y ago
The flip side of that it is: Allowable as long as no specific law spells out it is illegal. That's great for civil liberties of individuals. In finance, that's how crashes happen.
- AnthonyMouse 5y ago
  In finance, crashes happen because large numbers of people are putting their money into something without realizing that it's overvalued, and then they all find out at once. The 2008 housing crisis was caused by banks buying insurance against borrowers defaulting. They used a bunch of banking words to make it sound complicated, but that was it. Just nobody thought about what it would do to the bank's incentives. Not the insurance companies, not the regulators. So the banks lent money to a bunch of uncreditworthy people because they were insured, and inflated a housing bubble. Then when they all started to default, the bubble popped and bankrupted the insurance companies and therefore the banks. The Savings and Loan Crisis in the 1980s was caused by the government propping up failed banks. The banks were then insured by the government (sound familiar?) so they took on a bunch of bad risks because if they paid off they made money and if they didn't it was the taxpayer on the line. The theme here isn't banks doing creative accounting, it's moral hazard. They do just what you'd expect them to do if you insulate them from risk. But importantly, none of this has anything to do with KYC/AML regulations, which aren't supposed to prevent financial crashes. They're high cost low benefit regulations that don't even do the thing they're intended to do: https://www.icij.org/investigations/fincen-files/ https://www.icij.org/investigations/fincen-files/
salawat 5y ago
This is... how Administrative Law works. Don't shoot the messenger. I don't like it, but it is what it is. If it's any comfort, I don't find it comforting or desirable at all. Unfortunately, this is just the way Congress settled on doing things at the Federal level.

So guilty whenever the bureaucrat wants you to be? Is this an actual stance that you hold?

by djbebs 5y ago

So guilty whenever the bureaucrat wants you to be? Is this an actual stance that you hold?

efdee 5y ago

That's pretty much what a regulator does. Using the pejorative "bureaucrat" doesn't change that.

drdeca 5y ago
Regardless of what you call the person, doesn’t that seem a bit on the “rule of man” side (as opposed to the “rule of law” side) ? I recognize that in the end decisions need to be made by people, but, under the principle of the rule of law, it should be feasible to understand the laws relating to your likely activities to a sufficient degree that one can determine what things won’t get one in legal trouble? (Of course, some things might be somewhat ambiguous, but, still.), right?
- salawat 5y ago
  That is Administrative Law sadly. One of the saddest realizations of my life. Congress ceded fine-grained lawmaking to executive agencies established under statute for that purpose. It's just how it works. Regulators won't ruin your day during onboarding, unless you're not even trying to be legit. Even then, they'll evaluate where you are at, and help you develop a compliance roadmap consistent with best practices. Now if you fail to meet that or drag your feet...

Zigurd 5y ago

The flip side of that it is: Allowable as long as no specific law spells out it is illegal. That's great for civil liberties of individuals. In finance, that's how crashes happen.

AnthonyMouse 5y ago
In finance, crashes happen because large numbers of people are putting their money into something without realizing that it's overvalued, and then they all find out at once. The 2008 housing crisis was caused by banks buying insurance against borrowers defaulting. They used a bunch of banking words to make it sound complicated, but that was it. Just nobody thought about what it would do to the bank's incentives. Not the insurance companies, not the regulators. So the banks lent money to a bunch of uncreditworthy people because they were insured, and inflated a housing bubble. Then when they all started to default, the bubble popped and bankrupted the insurance companies and therefore the banks. The Savings and Loan Crisis in the 1980s was caused by the government propping up failed banks. The banks were then insured by the government (sound familiar?) so they took on a bunch of bad risks because if they paid off they made money and if they didn't it was the taxpayer on the line. The theme here isn't banks doing creative accounting, it's moral hazard. They do just what you'd expect them to do if you insulate them from risk. But importantly, none of this has anything to do with KYC/AML regulations, which aren't supposed to prevent financial crashes. They're high cost low benefit regulations that don't even do the thing they're intended to do: https://www.icij.org/investigations/fincen-files/ https://www.icij.org/investigations/fincen-files/

salawat 5y ago

This is... how Administrative Law works. Don't shoot the messenger. I don't like it, but it is what it is. If it's any comfort, I don't find it comforting or desirable at all. Unfortunately, this is just the way Congress settled on doing things at the Federal level.