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Ehm. No. Innocent until proven guilty, not guilt until proven innocent. Being de-platformed from financial infrastructure is tantamount to being economically

Ehm. No. Innocent until proven guilty, not guilt until proven innocent. Being de-platformed from financial infrastructure is tantamount to being economically jailed and instantly forced into life altering poverty. This isn’t some silly app you’re getting banned from… Banks shouldn’t be allowed to ban anyone. They should need a court order to lock up/ban someone from access/mobility of their own property. That said, this is likely a narrow lens statement. The problem is more complex around governments/judicial systems incentivizing banks to behave like governments. In reality, our regulatory agencies need to do their jobs: regulate/enforce and be held accountable when they don’t (instead of passing that enforcement on to banks through threat of liability).

nickff 3y ago
The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Anti-money-laundering (AML) and so-called risk management regulations make it unprofitable and complicated to provided a mount services to many people. The government (and its regulatory bodies) use this ‘flexibility’ to achieve their aims (see operation Choke Point).
- acdha 3y ago
  I’d say “better regulation” rather than “less” - things like fraud and money laundering are important to fight (consider how bad ransomware would be if the attackers didn’t have to convince their victims to make a cryptocurrency transaction first) but we sacrificed due process to get there. It shouldn’t be impossible to have better regulations but the national security ratchet effect is pretty strong, as I’m reminded every time the TSA scrutinizes my sandals.
  - BirAdam 3y ago
    You assume that the point of regulation is the stated one. I do not think this is a valid assumption. Regulatory capture has occurred consistently throughout US history as has bribery, collusion, and monopoly building (with explicit government support). What makes you believe that regulation would then be helpful in some area when it hasn’t elsewhere?
- lmm 3y ago
  > The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Banks are creatures of government, they're never going to be private competitive businesses. The solution is to recognise this and subject them to the same oversight that government is: FOIA, the equal protection clause, all of that good stuff.
- MrVandemar 3y ago
  > the solution is lighter regulation of banks, Seriously? Nope. Nope. Nope. No. Remember 2008.
  - BirAdam 3y ago
    One could argue that mortgages given out sub 2.5% became a problem when the fed funds rate went to 2.5% by mid-June. Additionally, a US deregulation wouldn’t explain house bubbles elsewhere at the same time. The truth is that when interest rates are low, debt is more attractive but when/if rates rise, many borrowers and lenders will suffer. This became especially problematic when Fannie Mae and Freddie Mac were able to compete very strongly with government money and gain massive swaths of the market. The other lenders were then pushed into rather unsafe behavior. Thing is, how do you regulate subprime lending? If the answer is just to refuse the “dirty poors” you’ll eventually have an extremely angry and desperate underclass, hence the creation of Fannie and Freddie in the first place. If you outlaw derivative markets you’ll be outlawing an avenue for legitimate hedging, and you’d end up with even greater consolidation of many markets into the hands of even fewer participants. While deregulation did directly lead to the consolidation of the banking system after the crisis, and certainly didn’t help prevent the crisis, I wouldn’t consider it a primary cause.
patmcc 3y ago
>>>Banks shouldn’t be allowed to ban anyone. This gets pretty tricky - telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. I think the government should provide a basic bank account to anyone who wants one though.
- toast0 3y ago
  Postal banking could be an option, but otherwise, the federal government seems to not want to deal with the customer service involved in running a banking operation. It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations. Nobody would be happy, but hold all deposits for a long period, so that they fully clear. Possibly restrict the sources of funds; maybe a basic bank account can only accept payroll and government deposits, maybe a limit of N unique payers per unit time. Etc. Social security and state benefit programs have specialized accounts for people without other bank accounts, because it works better than sending checks in the mail, maybe one of those programs could be slightly more generalized. Allow a bank to refuse to service an otherwise qualifying basic banking customer only if the bank goes through a court process and/or is accompanied by actual criminal charges filed.
  - patmcc 3y ago
    >>>It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations. Yeah, I'd be ok with this. Require banks to provide some MVP 'bank account' to anyone that isn't already declared banking-persona-non-grata by the courts.
- 015a 3y ago
  > telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. So, the legal system? The only reason regulated banks should be able to deplatform someone is if they also have a legally actionable case, and they do legally action it, and the person is found guilty.
jopsen 3y ago
Or you need better digital ID systems to reduce risk of fraud? Example: In the EU all internet transactions require a second factor, it's annoying -- but typing in a credit card number is already crappy UX. But making identify theft harder could also reduce risk of keeping clients with abnormal patterns. Since the bank will have more confidence that the customer isn't subject to identity theft. Obviously, there are more options. Maybe, banks should be held more accountable. But increasing the bar for fraud by having a strong online identity system could probably raise the bar a lot.

nickff 3y ago

The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Anti-money-laundering (AML) and so-called risk management regulations make it unprofitable and complicated to provided a mount services to many people. The government (and its regulatory bodies) use this ‘flexibility’ to achieve their aims (see operation Choke Point).

acdha 3y ago
I’d say “better regulation” rather than “less” - things like fraud and money laundering are important to fight (consider how bad ransomware would be if the attackers didn’t have to convince their victims to make a cryptocurrency transaction first) but we sacrificed due process to get there. It shouldn’t be impossible to have better regulations but the national security ratchet effect is pretty strong, as I’m reminded every time the TSA scrutinizes my sandals.
- BirAdam 3y ago
  You assume that the point of regulation is the stated one. I do not think this is a valid assumption. Regulatory capture has occurred consistently throughout US history as has bribery, collusion, and monopoly building (with explicit government support). What makes you believe that regulation would then be helpful in some area when it hasn’t elsewhere?
lmm 3y ago
> The government is the prime culprit when it comes to financially de-platforming people, if you want more secure access to banking, the solution is lighter regulation of banks, not more. Banks are creatures of government, they're never going to be private competitive businesses. The solution is to recognise this and subject them to the same oversight that government is: FOIA, the equal protection clause, all of that good stuff.
MrVandemar 3y ago
> the solution is lighter regulation of banks, Seriously? Nope. Nope. Nope. No. Remember 2008.
- BirAdam 3y ago
  One could argue that mortgages given out sub 2.5% became a problem when the fed funds rate went to 2.5% by mid-June. Additionally, a US deregulation wouldn’t explain house bubbles elsewhere at the same time. The truth is that when interest rates are low, debt is more attractive but when/if rates rise, many borrowers and lenders will suffer. This became especially problematic when Fannie Mae and Freddie Mac were able to compete very strongly with government money and gain massive swaths of the market. The other lenders were then pushed into rather unsafe behavior. Thing is, how do you regulate subprime lending? If the answer is just to refuse the “dirty poors” you’ll eventually have an extremely angry and desperate underclass, hence the creation of Fannie and Freddie in the first place. If you outlaw derivative markets you’ll be outlawing an avenue for legitimate hedging, and you’d end up with even greater consolidation of many markets into the hands of even fewer participants. While deregulation did directly lead to the consolidation of the banking system after the crisis, and certainly didn’t help prevent the crisis, I wouldn’t consider it a primary cause.

patmcc 3y ago

>>>Banks shouldn’t be allowed to ban anyone. This gets pretty tricky - telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. I think the government should provide a basic bank account to anyone who wants one though.

toast0 3y ago
Postal banking could be an option, but otherwise, the federal government seems to not want to deal with the customer service involved in running a banking operation. It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations. Nobody would be happy, but hold all deposits for a long period, so that they fully clear. Possibly restrict the sources of funds; maybe a basic bank account can only accept payroll and government deposits, maybe a limit of N unique payers per unit time. Etc. Social security and state benefit programs have specialized accounts for people without other bank accounts, because it works better than sending checks in the mail, maybe one of those programs could be slightly more generalized. Allow a bank to refuse to service an otherwise qualifying basic banking customer only if the bank goes through a court process and/or is accompanied by actual criminal charges filed.
- patmcc 3y ago
  >>>It would probably be more reasonable to make some sort of tightly regulated basic bank account that banks would be required to offer in some situations. Yeah, I'd be ok with this. Require banks to provide some MVP 'bank account' to anyone that isn't already declared banking-persona-non-grata by the courts.
015a 3y ago
> telling a bank they need to keep dealing with customers that cost them tons of money and are actively trying to defraud them (and other customers) seems awfully harsh. So, the legal system? The only reason regulated banks should be able to deplatform someone is if they also have a legally actionable case, and they do legally action it, and the person is found guilty.

jopsen 3y ago

Or you need better digital ID systems to reduce risk of fraud? Example: In the EU all internet transactions require a second factor, it's annoying -- but typing in a credit card number is already crappy UX. But making identify theft harder could also reduce risk of keeping clients with abnormal patterns. Since the bank will have more confidence that the customer isn't subject to identity theft. Obviously, there are more options. Maybe, banks should be held more accountable. But increasing the bar for fraud by having a strong online identity system could probably raise the bar a lot.