5 ms·

Debanking small accounts isn't something that I'd heard of before. But debanking "undesirables" is certainly a problem. Over here (Belgium) we have legalized p

by elric 1y ago

Debanking small accounts isn't something that I'd heard of before. But debanking "undesirables" is certainly a problem. Over here (Belgium) we have legalized prostitution, but it's very hard for sex workers to open a bank account. There's some legislation that forces banks to offer them a basic bank account (at a steep fee) if they can prove that they've been rejected by N banks. Which is a start, I suppose. Banks have basically become an extension of law enforcement, tax collectors, anti-terrorist operations, and morality police. Which is ironic, given how many banks brazenly break laws on the regular, how absolutely depraved parties with bankers are, etc. They're hardly paragons of virtue. Yet they get to gatekeep "virtue".

roenxi 1y ago
I agree; but if we're bank-bashing I'd like it to be comprehensive: What with all the attention they have to put into cooperating with the authoritarians they also aren't particularly good at their theoretical purpose, which is pooling people's money and investing it productively. We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd. The banking system has sticky fingers all over that mess. Then they get political protection through financial crisises where they should be taken out by bankruptcy but the powers that be prioritise having reliable people in what is effectively law enforcement rather then putting good capital managers in charge. So, y'know. Upside is the banks do a great job of shutting down sex workers and political activism. 10/10 mark for reporting what everyone is doing to law enforcement. Downside is that turns out to be a big distraction from all the wealth creation banking can enable.
- soco 1y ago
  If the entire picture was so dark nobody would have used banks for anything, all across history. The banks were created by those having the means to open banks, not by charities, so it should be obvious that they will serve primarily their masters. You could make a similar argument for crypto: it does help some people to send money to the back of Africa, but is mostly enabling scams. My point is, the more there's money involved the darker the picture. If only we cared enough to make it better, but it's all boiling the frog.
- dmurray 1y ago
  Banks are doing a relatively bad job of capital management, but they're also doing less and less of it. Investment funds of all sorts manage the world's money. Your retail bank might originate mortgages, but it almost certainly sells them on. The Fed doesn't want to see an overnight switch to narrow banking, where banks sell you checking accounts and money transmission services and never make decisions about investing the deposits. It has declined to approve banks that would do that. But it seems OK with presiding over a managed decline of banking into that state.
- bluGill 1y ago
  Dictatorships (which is what communism always amounts to in the real world) are always good at big visible projects. they fail because things not on the dictators 'radar' don't get anyones attention as there is no reward for small projects that keep the world running until the dictator notices the lack. If the dictator doesn't notice the lack you have to be really good at marketing yourself if you do them otherwise you will be 'purged' for wasted effort when you do them.
  - ashoeafoot 1y ago
    Usually its just the corrupt dictators uncles 2nd nephew rerouting all the funds so basic maintenance cant be done. New projects are always "planned", there are enormous models, cgi movies of cities on endless loops and thats it. Oh at 6:00 clock the septic truck arrives.
  - fpoling 1y ago
    It is a myth that dictatorships are good at big projects. Just consider the history of atomic bomb. If not the access to the spied US blueprints Soviet Union would be much delayed with own version. Then it took China about 10 years before they could test the atomic bomb even after receiving initially a significant help from Soviet Union. Or consider sending a man to the Moon. Soviet Union eventually abandoned own efforts and was able to create a rocket with similar capabilities as Saturn V only in 1986. Or consider that the best semiconductor production process comes from a Taiwanese company followed by South Corea and US. China is still not able to catch up despite all the efforts. Or consider high speed trains. It was Japan and Europe that developed comprehensive network first, not China. And Soviet Union and later Russia never came close to implementing anything like that.
    - bluGill 1y ago
      I never said that non-dictators cannot do big projects. I said that dictators tend to do them as well as anyone else. Big projects don't always go well for anyone, you can find plenty of big projects that fail in the US. Dictators can lose interest just as much as anyone else. The point is dictators fail most often by ignoring things they consider small and not letting someone else take care of it.
- stephen_g 1y ago
  Retail banks actually don’t ‘pool people’s money and invest it’, and for good reason. Investment banks are different from regular retail banks for a reason (which is that that creates way too much risk to deposits for everyday banking). The main business of banking is actually leveraging the capital of their owners (shareholders) to lend. Deposits are not the main game, and are there for two reasons - firstly that lending produces deposits, so banks may as well be able to hold deposits just for that reason, but also because deposit inflows create the liquidity banks need to lever up their capital. This is the real reason why banks pay interest on deposits - to encourage people to transfer money in and not transfer as much out. Actually just having the deposits sitting there doesn’t do much for the bank, so the bank more wants you to transfer money in to increase your balance and not just hold it.
  - gruez 1y ago
    >Retail banks actually don’t ‘pool people’s money and invest it’, >deposit inflows create the liquidity banks need to lever up their capital Aren't these basically the same thing? There's complicated capital structure around how much tier 1 capital banks have to hold, and what deposits have to be backed by, but at the end of the day banks are taking money from depositors and investors, and using it to buy assets. More importantly if you deposit a dollar, that's not sitting around in a vault somewhere, it's used to buy treasuries or whatever. Most people would characterize that as "pool people’s money and invest it".
    - roenxi 1y ago
      It seems like a reasonable objection, AFAIK the argument would boil down equivalently to money being a unit of measurement therefore the language is wrong - it is a bit like saying "pool people's meters" - meters are a unit of measurement as opposed to a thing. Can't pool meters, can pool meters of cloth. Especially since we don't hold the amount of wealth measured by a unit of currency steady it doesn't make sense to talk about "pooling money". In this case though I said banking system, not retail banking system and I think the fairest reading given the ambiguity is just to treat it as "pool people's wealth" and shift to talking about the real economy.
- ToucanLoucan 1y ago
  > We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd. I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years. I'm curious if you would feel the banks are more responsible, and if so, how? Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist, alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes.
  - AnthonyMouse 1y ago
    > I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years. Federal Receipts as a Percent of GDP: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S There is not any kind of material long-term discontinuity initiated in the Reagan years. It has been approximately flat since the end of WWII, which implies a growth in real government revenue per capita consistent with the growth in real GDP per capita. This chart is only federal receipts, not state; the total of the two in the US is ~30%. Countries that have taxpayer-funded healthcare systems have a higher total on paper because the cost of the healthcare system is then in the accounting as government revenue rather than private insurance premiums, not because they're doing significantly more non-healthcare government spending. In reality the US government spends more on non-healthcare government expenditures than most other countries because it runs such large deficits. > Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist What's really going on here is that the government is already extracting approximately the amount of money from the economy that maximizes medium-term government revenue given the trade off between revenue extraction and GDP growth. But the government is thoroughly captured by lobbyists, so every dollar the government spends on something that actually benefits the population is a dollar that isn't going to a well-connected government contractor or a union that wants a wasteful boondoggle and can shift enough votes for a representative in a vulnerable district that the party will sell out the general public to secure that seat, or to vote buying from retirees that has now reached the point that US Government spending on retirement benefits consumes more than half of all federal receipts and goes disproportionately to affluent retirees. Which makes it hard to pass useful programs because you have to fight the incumbents for the money. > alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes. This is also a mischaracterization of the change that happened during the Reagan years. If you look at nominal tax rates, on paper they went down under Reagan, but then you look at federal receipts and in 1979 they were 17.6% of GDP whereas in 1989 they were... 17.6% of GDP. As opposed to today, where over the last five years it has been in the range of 16% to 18.8%. Or the 1960s and 70s where it was in the range of, well, ~16% to ~18% of GDP. It really hasn't materially changed at all. What changed under Reagan is that prior to that, tax avoidance was much easier. People were deducting everything. When they lowered the nominal tax rates, they also closed so many loopholes that the effect of the rate reduction on government revenue was zero. Which is to say, the amount of tax dodging is much lower now than it was historically.
- Kim_Bruning 1y ago
  > We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists If I still had a fortune file, this would go in it!
verisimi 1y ago
> Banks have basically become an extension of law enforcement, tax collectors, anti-terrorist operations, and morality police. Which is ironic Not ironic at all. This is the design.
throwaway2037 1y ago
> Over here Where? NZ/AU?
- elric 1y ago
  Belgium. Edited the post to make that clearer, thanks for pointing that out.
  - throwaway2037 1y ago
    I thought EU has a civil right to a basic bank account. (Please correct me if wrong.) Literally, if you are a convicted violent criminal, they cannot deny you for basic bank account (after released from jail). If sex work is legal and these rejections are actually happening (this is the Internet after all), I cannot believe that a Belgian law firm has not taken the case on pro-bono to sue a bunch of national banks that refuse to open accounts for sex workers. Again, if the rejections were true, it would be easy to build a case. Sure, you might be rejected at lower court levels, but then you can climb (after many years) to the European Court of Justice. I am sure they will agree: These legal sex workers have the civil right to bank in any EU jurisdiction where they are a legal resident. I just Googled for: sex workers denied bank accounts in belgium And found this: https://www.coe.int/en/web/commissioner/blog/2024/-/asset_publisher/aa3hyyf8wKBn/content/protecting-the-human-rights-of-sex-workers https://www.coe.int/en/web/commissioner/blog/2024/-/asset_pu... > Since summer 2023, a new law has extended labour rights also to sex worker employees, including rules around working hours and payment, the right to refuse clients and the mandatory availability of emergency buttons in every room. The new law also decriminalises third parties, who will no longer be penalised for opening a bank account for sex workers or renting out accommodation, and it allows sex workers to advertise their services. To be fair: Your comment was true in the past. It looks like there has a been a recent turn of events.
wvh 1y ago
Top 1% vs bottom 1%. Amazing what one day in the shoes of another could teach a person. Well, hopefully.
FrustratedMonky 1y ago
"legalized prostitution" If legal, then why do banks have a problem offering an account. No risk of a bad actor, because it is legal. It would be like a small business or contractor.
- ativzzz 1y ago
  Probably because it's one of those industries where legalizing it still attracts a large enough black market (human trafficking is a huge thing) that it's easier to just blanket ban it than try to separate the legal from the illegal
  - hulitu 1y ago
    sigh Cum-ex sigh
neves 1y ago
I've heard that in Uruguay, where marijuana is legalized, it's very hard for a legal dealer to have access to financial services.
- EasyMark 1y ago
  Same in states where weed has been legalized in the USA due to it technically still being illegal because of Federal statutes
EasyMark 1y ago
How would they know someone is a sex worker? Surely any database of such is not publicly accessible, even by banks?
- elric 1y ago
  As a consequence of banks effectively being responsible for enforcing some laws, they are required to know where their customers' money comes from. They present new customers with a very long list of questions, including what your profession is. I guess that means that banks, in a way, have a database of sex workers.

by elric 1y ago

roenxi 1y ago

I agree; but if we're bank-bashing I'd like it to be comprehensive: What with all the attention they have to put into cooperating with the authoritarians they also aren't particularly good at their theoretical purpose, which is pooling people's money and investing it productively. We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd. The banking system has sticky fingers all over that mess. Then they get political protection through financial crisises where they should be taken out by bankruptcy but the powers that be prioritise having reliable people in what is effectively law enforcement rather then putting good capital managers in charge. So, y'know. Upside is the banks do a great job of shutting down sex workers and political activism. 10/10 mark for reporting what everyone is doing to law enforcement. Downside is that turns out to be a big distraction from all the wealth creation banking can enable.

soco 1y ago
If the entire picture was so dark nobody would have used banks for anything, all across history. The banks were created by those having the means to open banks, not by charities, so it should be obvious that they will serve primarily their masters. You could make a similar argument for crypto: it does help some people to send money to the back of Africa, but is mostly enabling scams. My point is, the more there's money involved the darker the picture. If only we cared enough to make it better, but it's all boiling the frog.
dmurray 1y ago
Banks are doing a relatively bad job of capital management, but they're also doing less and less of it. Investment funds of all sorts manage the world's money. Your retail bank might originate mortgages, but it almost certainly sells them on. The Fed doesn't want to see an overnight switch to narrow banking, where banks sell you checking accounts and money transmission services and never make decisions about investing the deposits. It has declined to approve banks that would do that. But it seems OK with presiding over a managed decline of banking into that state.
bluGill 1y ago
Dictatorships (which is what communism always amounts to in the real world) are always good at big visible projects. they fail because things not on the dictators 'radar' don't get anyones attention as there is no reward for small projects that keep the world running until the dictator notices the lack. If the dictator doesn't notice the lack you have to be really good at marketing yourself if you do them otherwise you will be 'purged' for wasted effort when you do them.
- ashoeafoot 1y ago
  Usually its just the corrupt dictators uncles 2nd nephew rerouting all the funds so basic maintenance cant be done. New projects are always "planned", there are enormous models, cgi movies of cities on endless loops and thats it. Oh at 6:00 clock the septic truck arrives.
- fpoling 1y ago
  It is a myth that dictatorships are good at big projects. Just consider the history of atomic bomb. If not the access to the spied US blueprints Soviet Union would be much delayed with own version. Then it took China about 10 years before they could test the atomic bomb even after receiving initially a significant help from Soviet Union. Or consider sending a man to the Moon. Soviet Union eventually abandoned own efforts and was able to create a rocket with similar capabilities as Saturn V only in 1986. Or consider that the best semiconductor production process comes from a Taiwanese company followed by South Corea and US. China is still not able to catch up despite all the efforts. Or consider high speed trains. It was Japan and Europe that developed comprehensive network first, not China. And Soviet Union and later Russia never came close to implementing anything like that.
  - bluGill 1y ago
    I never said that non-dictators cannot do big projects. I said that dictators tend to do them as well as anyone else. Big projects don't always go well for anyone, you can find plenty of big projects that fail in the US. Dictators can lose interest just as much as anyone else. The point is dictators fail most often by ignoring things they consider small and not letting someone else take care of it.
stephen_g 1y ago
Retail banks actually don’t ‘pool people’s money and invest it’, and for good reason. Investment banks are different from regular retail banks for a reason (which is that that creates way too much risk to deposits for everyday banking). The main business of banking is actually leveraging the capital of their owners (shareholders) to lend. Deposits are not the main game, and are there for two reasons - firstly that lending produces deposits, so banks may as well be able to hold deposits just for that reason, but also because deposit inflows create the liquidity banks need to lever up their capital. This is the real reason why banks pay interest on deposits - to encourage people to transfer money in and not transfer as much out. Actually just having the deposits sitting there doesn’t do much for the bank, so the bank more wants you to transfer money in to increase your balance and not just hold it.
- gruez 1y ago
  >Retail banks actually don’t ‘pool people’s money and invest it’, >deposit inflows create the liquidity banks need to lever up their capital Aren't these basically the same thing? There's complicated capital structure around how much tier 1 capital banks have to hold, and what deposits have to be backed by, but at the end of the day banks are taking money from depositors and investors, and using it to buy assets. More importantly if you deposit a dollar, that's not sitting around in a vault somewhere, it's used to buy treasuries or whatever. Most people would characterize that as "pool people’s money and invest it".
  - roenxi 1y ago
    It seems like a reasonable objection, AFAIK the argument would boil down equivalently to money being a unit of measurement therefore the language is wrong - it is a bit like saying "pool people's meters" - meters are a unit of measurement as opposed to a thing. Can't pool meters, can pool meters of cloth. Especially since we don't hold the amount of wealth measured by a unit of currency steady it doesn't make sense to talk about "pooling money". In this case though I said banking system, not retail banking system and I think the fairest reading given the ambiguity is just to treat it as "pool people's wealth" and shift to talking about the real economy.
ToucanLoucan 1y ago
> We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists; it is absurd. I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years. I'm curious if you would feel the banks are more responsible, and if so, how? Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist, alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes.
- AnthonyMouse 1y ago
  > I personally would lay far more of the blame at the feet of the slow-but-steady disassembly of a proper tax code which has rendered our Government all but unable to function from a fiscal perspective since the Reagan years. Federal Receipts as a Percent of GDP: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S There is not any kind of material long-term discontinuity initiated in the Reagan years. It has been approximately flat since the end of WWII, which implies a growth in real government revenue per capita consistent with the growth in real GDP per capita. This chart is only federal receipts, not state; the total of the two in the US is ~30%. Countries that have taxpayer-funded healthcare systems have a higher total on paper because the cost of the healthcare system is then in the accounting as government revenue rather than private insurance premiums, not because they're doing significantly more non-healthcare government spending. In reality the US government spends more on non-healthcare government expenditures than most other countries because it runs such large deficits. > Everything I've read on the subject over the years pretty squarely lays it at the austerity movements that have utterly crippled most western countries but none more thoroughly than the United States, where the notion seemingly of spending any public money on anything no matter how needed that isn't Defense spending is Communist What's really going on here is that the government is already extracting approximately the amount of money from the economy that maximizes medium-term government revenue given the trade off between revenue extraction and GDP growth. But the government is thoroughly captured by lobbyists, so every dollar the government spends on something that actually benefits the population is a dollar that isn't going to a well-connected government contractor or a union that wants a wasteful boondoggle and can shift enough votes for a representative in a vulnerable district that the party will sell out the general public to secure that seat, or to vote buying from retirees that has now reached the point that US Government spending on retirement benefits consumes more than half of all federal receipts and goes disproportionately to affluent retirees. Which makes it hard to pass useful programs because you have to fight the incumbents for the money. > alongside of course the general (and consequential of that) transfer of wealth from the working class to the extremely wealthy who dodge more taxes than ever before, perhaps in all of history of the practice of collecting taxes. This is also a mischaracterization of the change that happened during the Reagan years. If you look at nominal tax rates, on paper they went down under Reagan, but then you look at federal receipts and in 1979 they were 17.6% of GDP whereas in 1989 they were... 17.6% of GDP. As opposed to today, where over the last five years it has been in the range of 16% to 18.8%. Or the 1960s and 70s where it was in the range of, well, ~16% to ~18% of GDP. It really hasn't materially changed at all. What changed under Reagan is that prior to that, tax avoidance was much easier. People were deducting everything. When they lowered the nominal tax rates, they also closed so many loopholes that the effect of the rate reduction on government revenue was zero. Which is to say, the amount of tax dodging is much lower now than it was historically.
Kim_Bruning 1y ago
> We're watching an ongoing capital crisis in the West where we've been out-invested by nominal communists If I still had a fortune file, this would go in it!

verisimi 1y ago

> Banks have basically become an extension of law enforcement, tax collectors, anti-terrorist operations, and morality police. Which is ironic Not ironic at all. This is the design.

throwaway2037 1y ago

> Over here Where? NZ/AU?

elric 1y ago
Belgium. Edited the post to make that clearer, thanks for pointing that out.
- throwaway2037 1y ago
  I thought EU has a civil right to a basic bank account. (Please correct me if wrong.) Literally, if you are a convicted violent criminal, they cannot deny you for basic bank account (after released from jail). If sex work is legal and these rejections are actually happening (this is the Internet after all), I cannot believe that a Belgian law firm has not taken the case on pro-bono to sue a bunch of national banks that refuse to open accounts for sex workers. Again, if the rejections were true, it would be easy to build a case. Sure, you might be rejected at lower court levels, but then you can climb (after many years) to the European Court of Justice. I am sure they will agree: These legal sex workers have the civil right to bank in any EU jurisdiction where they are a legal resident. I just Googled for: sex workers denied bank accounts in belgium And found this: https://www.coe.int/en/web/commissioner/blog/2024/-/asset_publisher/aa3hyyf8wKBn/content/protecting-the-human-rights-of-sex-workers https://www.coe.int/en/web/commissioner/blog/2024/-/asset_pu... > Since summer 2023, a new law has extended labour rights also to sex worker employees, including rules around working hours and payment, the right to refuse clients and the mandatory availability of emergency buttons in every room. The new law also decriminalises third parties, who will no longer be penalised for opening a bank account for sex workers or renting out accommodation, and it allows sex workers to advertise their services. To be fair: Your comment was true in the past. It looks like there has a been a recent turn of events.

wvh 1y ago

Top 1% vs bottom 1%. Amazing what one day in the shoes of another could teach a person. Well, hopefully.

FrustratedMonky 1y ago

"legalized prostitution" If legal, then why do banks have a problem offering an account. No risk of a bad actor, because it is legal. It would be like a small business or contractor.

ativzzz 1y ago
Probably because it's one of those industries where legalizing it still attracts a large enough black market (human trafficking is a huge thing) that it's easier to just blanket ban it than try to separate the legal from the illegal
- hulitu 1y ago
  sigh Cum-ex sigh

neves 1y ago

I've heard that in Uruguay, where marijuana is legalized, it's very hard for a legal dealer to have access to financial services.

EasyMark 1y ago
Same in states where weed has been legalized in the USA due to it technically still being illegal because of Federal statutes

EasyMark 1y ago

How would they know someone is a sex worker? Surely any database of such is not publicly accessible, even by banks?

elric 1y ago
As a consequence of banks effectively being responsible for enforcing some laws, they are required to know where their customers' money comes from. They present new customers with a very long list of questions, including what your profession is. I guess that means that banks, in a way, have a database of sex workers.