5 ms·

This bit is downright scary: "the bank cannot explain why SARs [Suspicious activity reports] triggered a debanking, because disclosing the existence of a SAR is

This bit is downright scary: "the bank cannot explain why SARs [Suspicious activity reports] triggered a debanking, because disclosing the existence of a SAR is illegal. 12 CFR 21.11(k) Yes, it is the law in the United States that a private non-court, in possession of a memo written by a non-intelligence analyst, cannot describe the nature of the non-accusation the memo makes. Nor can it confirm or deny the existence of the memo."

metacritic12 2y ago
Absolutely, it's one of the most undemocratic, potentially violative of 1st amendment laws that is out there. This is from the point of view that money laundering as a law is essentially thoughtcrime. The police state has done an orwellian job of normalizing not privacy, but instead telling the government the reason you are doing every transaction. Then, any attempt to not tell the government is "money laundering". Of course, if you are the state, the powers of this tool are alluring. Imagine if the state could compel citizens to write down what they're thinking, and compel justifications for everything they do in life. Think of how many crimes we could solve! Think of how many bad folks we can catch ahead of time!
- TacticalCoder 2y ago
  > ...is essentially thoughtcrime > The police state has done an orwellian job... > Then, any attempt to not tell the government is "money laundering". Exactly. But the really most shocking is the number of people that'll find excuses for such a dystopian system. Now of course very few bite the hand that feeds them: when you literally work on software facilitating the handling of SARs, you need to do post-fact rationalization of your acts and life choices. I hope the new administration burns that profoundly nightmarish system to the ground.
_fat_santa 2y ago
I get why this is insane but I also get why the law is there which leaves me in a wired spot. Part of me wants to say something along the lines of "make SAR's disclosable / viewable to American citizens or legitimate users" but you can't really do that because the bad guys will quickly exploit any escape hatches like this. What do others think about this? Because I'm kinda stuck in the middle about them.
- metacritic12 2y ago
  The middle ground seems to be allowing SARs (which are analogous to tips to police officers), but not requiring banks keep them secret from the customer. The bank could decide to do so, but also could decide not to, like any other speech.
  - hiatus 2y ago
    What is the incentive to divulge the information if they don't have to? Customer service? "We're the one bank that will tell you why we are dropping you as a customer"?
    - metacritic12 2y ago
      Probably some amount of customer service. Banks are at their distrection then on whether they want to tell you or not -- just like for any other reason for dropping you as a customer. I guess more important than empirically whether banks tell you, it's that it should be their right to tell you if they want.
- hiatus 2y ago
  When a case is brought to court, they have to outline the methods used to determine the perpetrator. Why is it okay to do that for things like murder and other crimes but not for banks?
  - mandevil 2y ago
    SAR's can be discussed when criminal charges are filed. The most famous case I know of that stems from a publicly available SAR is former Speaker of the House Denny Hastert (R-Il) after his retirement from the House, when he was a lobbyist. He was being blackmailed by someone for his previous sexual assaults from his days as a high school teacher and wrestling coach three decades earlier, before he went into politics. He went to a bank to withdraw a bunch of cash to pay his blackmailer, and the bank started to fill out the form they do whenever you withdraw over $10,000 in cash (not a SAR, just a regular form). He saw the form being filled out, and decided he didn't want a paper trail with the government showing he was being blackmailed. So instead he stood in line hundreds of times at the bank, withdrawing $5,000 each time. This was why a SAR was filed, because he was clearly doing something called "structuring" which is setting up transactions deliberately to avoid those disclosure rules. After the FBI investigated, they decided that they couldn't get him for child sexual abuse, because it had been so long ago that the statue of limitations had expired. But they could get him for structuring, to which he plead guilty and served 15 months in jail. Besides the fact that knowing about when they are filed would tip off criminals, there is also the fact that oftentimes they are filed for perfectly innocuous reasons, and are never investigated and don't go anywhere. Not ideal to have publicly available "this guy did something suspicious" flags that have not been investigated further looming over you and haunting the rest of your life. Since SAR's are not shared with other financial institutions, they won't follow you the same way.
miohtama 2y ago
I have a friend that is constantly being debanked and his wires getting lost because he has the same name as politically exposed Russian person. Banks do not negotiate. They just kick him off and sometimes even lose his money. There is nothing he can do, even though everyone who would look the issue would figure out it's just a shitty automatic system flagging it because of an unrelated person 's name. It would cost too much time and money for banks to fix this mistake, so giving a boot is cheaper.
- sroussey 2y ago
  I’m surprised there is no redress number like for plane flights.
- nick3443 2y ago
  Sounds like a big inconvenience, did he try to change his legal name? Edit: I have no idea why this legitimate question is being down voted. I'm not suggesting that he should change his name or even that such a solution is an acceptable state of affairs. And the replies received re:past names are furthering discussion.
  - voxic11 2y ago
    Apparently AML/KYC programs do consider past names so that people can't simply change their name to avoid sanctions. But one would think if they were going into that much detail they would be able to tell that you aren't the same person as the sanctioned entity.
    - elric 2y ago
      KYC is a joke. Source: I worked on a KYC system.
RobotToaster 2y ago
How does that not violate the due process clause? It's pretty clear they're acting "under color" of the state.
- happyopossum 2y ago
  Due process is related to legal proceedings - this is a commercial relationship.
- advisedwang 2y ago
  "No person shall ... be deprived of life, liberty, or property, without due process of law" A SAR does not deprive you of life, liberty or property.
  - lmm 2y ago
    It de facto describes you of property if you have to carry all your wealth as cash, which is then (at least stochastically) subject to civil forfeiture and/or everyday crime.
TacticalCoder 2y ago
Of course it is scary. This is totalitarianism plain and simple. Secret laws. Secret rules. All these do exist (not necessarily only for SARs, where the law is not necessarily secret) when they definitely should not. The excuse "(but) This is very much the law." isn't much of an excuse. Last I checked the numbers estimated that, worldwide, KYC/AML costs on business where more than $180 bn while only $12 bn of funds were frozen. And frozen do not mean confiscated: a part of these are unfrozen and rightfully returned to their owners. So that whole totalitarian, dystopian, system is a gigantic net loss. And for what? To please bureaucrats who can do nothing else but push papers, create laws and rules and put ever more burden on everybody else. But the worse of it all is that it gives a perfectly valid excuse for banks to debank anyone they don't like: seen that they don't need to justify anything they can just say "we're sorry we cannot say anything". Wait, no, that's not the worst of it all. In several countries in the EU like France and Belgium the local IRSes do basically run ads explaining how you can denounce your neighbor. I've heard a number floating in floating (devs in charge of these systems do talk): 25% of all the self-employed people have had at least one SAR. On my LinkedIn I see people proudly posting 3rd-reich stuff like "The previous chief compliance officer said there were weeks where they had zero SAR". Basically implying that the previous dude was not filling enough reports and that he was so happy to get the job so that he could run those numbers up. Burn that entire system. Just burn it to the ground. There is no moral justification to freezing the bank accounts of truckers in Canada. I don't care that "this is the law". Laws should be about justice. This has absolutely nothing to do with being just.
greyface- 2y ago
What's more: if you exhibit knowledge of the SAR requirement to a banker, they're supposed to file a SAR on you just for this, even if nothing else about your transaction trips the SAR threshold.

metacritic12 2y ago

Absolutely, it's one of the most undemocratic, potentially violative of 1st amendment laws that is out there. This is from the point of view that money laundering as a law is essentially thoughtcrime. The police state has done an orwellian job of normalizing not privacy, but instead telling the government the reason you are doing every transaction. Then, any attempt to not tell the government is "money laundering". Of course, if you are the state, the powers of this tool are alluring. Imagine if the state could compel citizens to write down what they're thinking, and compel justifications for everything they do in life. Think of how many crimes we could solve! Think of how many bad folks we can catch ahead of time!

TacticalCoder 2y ago
> ...is essentially thoughtcrime > The police state has done an orwellian job... > Then, any attempt to not tell the government is "money laundering". Exactly. But the really most shocking is the number of people that'll find excuses for such a dystopian system. Now of course very few bite the hand that feeds them: when you literally work on software facilitating the handling of SARs, you need to do post-fact rationalization of your acts and life choices. I hope the new administration burns that profoundly nightmarish system to the ground.

_fat_santa 2y ago

I get why this is insane but I also get why the law is there which leaves me in a wired spot. Part of me wants to say something along the lines of "make SAR's disclosable / viewable to American citizens or legitimate users" but you can't really do that because the bad guys will quickly exploit any escape hatches like this. What do others think about this? Because I'm kinda stuck in the middle about them.

metacritic12 2y ago
The middle ground seems to be allowing SARs (which are analogous to tips to police officers), but not requiring banks keep them secret from the customer. The bank could decide to do so, but also could decide not to, like any other speech.
- hiatus 2y ago
  What is the incentive to divulge the information if they don't have to? Customer service? "We're the one bank that will tell you why we are dropping you as a customer"?
  - metacritic12 2y ago
    Probably some amount of customer service. Banks are at their distrection then on whether they want to tell you or not -- just like for any other reason for dropping you as a customer. I guess more important than empirically whether banks tell you, it's that it should be their right to tell you if they want.
hiatus 2y ago
When a case is brought to court, they have to outline the methods used to determine the perpetrator. Why is it okay to do that for things like murder and other crimes but not for banks?
- mandevil 2y ago
  SAR's can be discussed when criminal charges are filed. The most famous case I know of that stems from a publicly available SAR is former Speaker of the House Denny Hastert (R-Il) after his retirement from the House, when he was a lobbyist. He was being blackmailed by someone for his previous sexual assaults from his days as a high school teacher and wrestling coach three decades earlier, before he went into politics. He went to a bank to withdraw a bunch of cash to pay his blackmailer, and the bank started to fill out the form they do whenever you withdraw over $10,000 in cash (not a SAR, just a regular form). He saw the form being filled out, and decided he didn't want a paper trail with the government showing he was being blackmailed. So instead he stood in line hundreds of times at the bank, withdrawing $5,000 each time. This was why a SAR was filed, because he was clearly doing something called "structuring" which is setting up transactions deliberately to avoid those disclosure rules. After the FBI investigated, they decided that they couldn't get him for child sexual abuse, because it had been so long ago that the statue of limitations had expired. But they could get him for structuring, to which he plead guilty and served 15 months in jail. Besides the fact that knowing about when they are filed would tip off criminals, there is also the fact that oftentimes they are filed for perfectly innocuous reasons, and are never investigated and don't go anywhere. Not ideal to have publicly available "this guy did something suspicious" flags that have not been investigated further looming over you and haunting the rest of your life. Since SAR's are not shared with other financial institutions, they won't follow you the same way.

miohtama 2y ago

I have a friend that is constantly being debanked and his wires getting lost because he has the same name as politically exposed Russian person. Banks do not negotiate. They just kick him off and sometimes even lose his money. There is nothing he can do, even though everyone who would look the issue would figure out it's just a shitty automatic system flagging it because of an unrelated person 's name. It would cost too much time and money for banks to fix this mistake, so giving a boot is cheaper.

sroussey 2y ago
I’m surprised there is no redress number like for plane flights.
nick3443 2y ago
Sounds like a big inconvenience, did he try to change his legal name? Edit: I have no idea why this legitimate question is being down voted. I'm not suggesting that he should change his name or even that such a solution is an acceptable state of affairs. And the replies received re:past names are furthering discussion.
- voxic11 2y ago
  Apparently AML/KYC programs do consider past names so that people can't simply change their name to avoid sanctions. But one would think if they were going into that much detail they would be able to tell that you aren't the same person as the sanctioned entity.
  - elric 2y ago
    KYC is a joke. Source: I worked on a KYC system.

RobotToaster 2y ago

How does that not violate the due process clause? It's pretty clear they're acting "under color" of the state.

happyopossum 2y ago
Due process is related to legal proceedings - this is a commercial relationship.
advisedwang 2y ago
"No person shall ... be deprived of life, liberty, or property, without due process of law" A SAR does not deprive you of life, liberty or property.
- lmm 2y ago
  It de facto describes you of property if you have to carry all your wealth as cash, which is then (at least stochastically) subject to civil forfeiture and/or everyday crime.

TacticalCoder 2y ago

Of course it is scary. This is totalitarianism plain and simple. Secret laws. Secret rules. All these do exist (not necessarily only for SARs, where the law is not necessarily secret) when they definitely should not. The excuse "(but) This is very much the law." isn't much of an excuse. Last I checked the numbers estimated that, worldwide, KYC/AML costs on business where more than $180 bn while only $12 bn of funds were frozen. And frozen do not mean confiscated: a part of these are unfrozen and rightfully returned to their owners. So that whole totalitarian, dystopian, system is a gigantic net loss. And for what? To please bureaucrats who can do nothing else but push papers, create laws and rules and put ever more burden on everybody else. But the worse of it all is that it gives a perfectly valid excuse for banks to debank anyone they don't like: seen that they don't need to justify anything they can just say "we're sorry we cannot say anything". Wait, no, that's not the worst of it all. In several countries in the EU like France and Belgium the local IRSes do basically run ads explaining how you can denounce your neighbor. I've heard a number floating in floating (devs in charge of these systems do talk): 25% of all the self-employed people have had at least one SAR. On my LinkedIn I see people proudly posting 3rd-reich stuff like "The previous chief compliance officer said there were weeks where they had zero SAR". Basically implying that the previous dude was not filling enough reports and that he was so happy to get the job so that he could run those numbers up. Burn that entire system. Just burn it to the ground. There is no moral justification to freezing the bank accounts of truckers in Canada. I don't care that "this is the law". Laws should be about justice. This has absolutely nothing to do with being just.

greyface- 2y ago

What's more: if you exhibit knowledge of the SAR requirement to a banker, they're supposed to file a SAR on you just for this, even if nothing else about your transaction trips the SAR threshold.