Frankly as someone who used to work in the field I found this insanely frustrating and would constantly hate that I was forced to get rid of customers who I wasn't positive had done anything wrong to protect the bank, and if they HAD done something wrong I was basically destroying law enforcement's lead and possibly alerting the target. But that's the current effect of the laws. They definitely need to be fixed not just for broader goals like banking inclusion but to effectively do what they're supposed to do in the first place.
The anti-money laundering laws came out of domestic organized crime. After the feds got Al Capone on tax evasion the mobsters started paying their taxes but the feds still wanted to go after them that way, so the concept of "money laundering" was created from whole cloth.
The problem is it never really worked once the crime bosses had an accountant on payroll. And organized crime itself was primarily an artifact of Prohibition and the Depression and has been on the decline ever since. The WoD is probably the only reason it still exists at all, but unlike Prohibition, that is international. Which means the criminals can export the money from the US as cash or precious commodities and don't have to deal with the US banking system at all.
With terrorism it's even worse. If some prince in the middle east is using oil money to fund terrorism, the money is never even in the US to begin with.
It's the textbook example of a law whose costs outweigh its benefits but no one wants to fix it because they don't want to look soft on drugs/terrorism.
Old school mafia are using check cashing places to launder money.
What, charging mobsters with tax evasion? It might still work on the occasional mid-level guy who was dumb enough to not pay his taxes. When was the last time a top-level crime boss was charged with it?
> Old school mafia are using check cashing places to launder money.
Of course they are. That's why the laws against money laundering are harmful. Most of the people you're trying to catch with them are adept at navigating around them, so all they really do is molest honest citizens/businesses and degrade privacy.
https://www.nerdwallet.com/blog/banking/blacklisted-by-chexs...
In the 4 years since, I've had a few instances where I needed checks. I have a plumber I like, but he isn't really a businessman, and so he wants cash or a check when he's done with work. The only tradesman I've dealt with that wasn't happy with me sending a check from Simple. He does good work though. I have some bills I pay via check, like the yearly pool membership, that I can just use Simple to send out.
I've been pretty happy to not have a check book. Especially after I had a $45 check I sent someone that got stolen from their mailbox and cashed for around $2,000 each, twice at different branches of my bank. Thankfully, I noticed within a day or two, and it was only a big hassle.
The reason the number of unbanked keeps going up is that post-9/11 the USA kept tightening anti-money laundering requirements. These require banks to refuse to bank with clients who they suspect might be criminals, on pain of the banker becoming a criminal themselves. That means once people fall out of the banking system for whatever reason and have to live in the cash economy for a while, they cannot prove where their income came from and are thus presumed guilty by default.
To fix that you'd need to make US AML laws much less punitive. No political appetite exists to do that.