If you don't want that, and you want the banks not to refuse any legal transactions, that's easy. They then don't refuse to process any transactions at all.
If you do want them to refuse illegal transactions, and they're allowed to refuse legal transactions, that makes it easy for the bank because then they just refuse anything marginal even if it's totally legitimate. This is what we have now. It's not a problem for the bank but it's a big problem for the people getting unjustly locked out.
Expecting the bank to process no illegal transactions and all legal transactions is an impossible burden, because nobody actually knows what that means. The meaning of a lot of laws isn't even settled until they get litigated in court and set a precedent. It would require the bank to be infallible, and know everything about everybody's business, because a mistake in either direction would incur penalties.
So which one do you want? (The first one actually looks pretty good when you consider the alternatives. Let the police be the police and the bank be the bank.)
You're describing your state banking regulator. Also, like a bajillion federal banking regulators.
The article talks about credit card networks. I'm referring to banks. Banks are highly regulated, including with respect to account closures. Credit card networks are much less regulated.
If you want a non-court public venue to dispute your bank on something, anything, you have several such venues. Depending on your state, they can be quite toothsome.
Well, they're doing that but there's also a huge set of things whose legal status is "shmaybe?", and AnthonyMouse's point is that this is where the defaults matter. Currently, banks tend to merge that third category into "illegal" set. They could merge it into "legal" set instead, which would arguably be better for society.
I’m not defending porn as a grand corner of free speech but I don’t like banks deciding who can and cannot be paid.
The alternative that might work is charging businesses fees that vary according to the risk of their transactions being illegal. Which sounds good on paper, but also runs the risk of leaving the bank in the position of making a large amount of fees from illegal activity, which rarely goes over well in court. Better, perhaps, to have a unified fee schedule and just refuse any business that could be unprofitable from liability.
I think the banker would have a strong point here. They're not in a place where these are always easy calls to make - transactions don't come with an evil bit. The constraints placed on them don't leave them a lot of viable choices.
So bank should be held liable if they:
- do not collect evidence
- do not act on evidence
- if they act without evidence
The bank should face appropriate penalties for making misjudgments in both directions. For example, you should have a right to sue bank for refusing to provide a service. The court could judge whether bank had sufficient grounds to refuse to conduct the business with you.
The bank should also provide the evidence to law enforcement to trigger investigation into alleged illegal misconduct. If the judicial systems clears you, then again, you should be able to compel bank to provide the basic financial services.
There is regulation like that for individuals in EU. Banks are obliged by the law to provide basic financial services (bank account and identification services if I recall correctly) to EU residents as part of the European Single Market.
While offering a "Basic bank account" is a legal requirement, they have no requirement to offer that service to any specific person. In reality, it typically means that they're offered to people in debt, but not to people the bank doesn't like, american citizens, prisoners, etc.
From DIRECTIVE 2014/92/EU CHAPTER IV, Article 16:
2. Member States shall ensure that consumers legally resident in the Union, including consumers with no fixed address and asylum seekers, and consumers who are not granted a residence permit but whose expulsion is impossible for legal or factual reasons, have the right to open and use a payment account with basic features with credit institutions located in their territory. Such a right shall apply irrespective of the consumer’s place of residence.
Member States may, in full respect of the fundamental freedoms guaranteed by the Treaties, require consumers who wish to open a payment account with basic features in their territory to show a genuine interest in doing so.
Member States shall ensure that the exercise of the right is not made too difficult or burdensome for the consumer.
From: https://europa.eu/youreurope/citizens/consumers/financial-pr...
If you are legally resident in an EU country you are entitled to open a "basic payment account".
When banks can refuse you a basic payment account
You can be refused an account if you do not comply with EU rules on money laundering and terrorist financing.
In some EU countries, you may be refused a basic bank account if you already have a similar account with another bank in the same country.
If you're applying for a basic payment account outside the country where you live, banks in some EU countries may also want you to prove a genuine interest for doing so – for example if you live in one country but work in another.
You can imagine a similar model for payments. The bank can’t just indefinitely say “umm not sure”, it has to go one way or the other.
It seems reasonable to just make the fines small, and the bank can try to minimize them by having their policies match what a court will find for those which are taken to court.
For example, can you buy alcohol in Delaware? Well, not if it's Sunday. How about a weekday? Not if it's between 1am and 9am.
Can you buy alcohol in New Jersey on Sunday? Sure, well not if you're in Bergen County.
That's one product. How do you propose these companies codify the entire world's regulations? It would require thousands of people to maintain the rule engine.
Next, TESLA eula will forbid you from going to questionable establishments, and the car will shut off if you arwle going to a strip club.
USSR couldn't dream of this level of surveillance, turns out the trick was to privatise it.
Only it won't be delivered by AI, but by a compliance script tied to geo-blocked locations. It will get extra tricky for cars to navigate when their owners are child molesters and have to stay 10 miles away from houses with children in it.
Onwards to our glorious future!
Right. But banks are regulated by the US Federal government. And according to US federal law[0], possessing and selling cannabis is just as illegal as possessing and selling methamphetamine or heroin.
As such, unless and until that changes, the banks aren't going to involve themselves in what the US Federal government deems a felony, regardless of what the several states do.
All transactions have some likelihood of fraud, so it's a fuzzy line.
Basically a pubic service PSP with loss financed by govs. I'm not holding my breath, and I can't see a single action I could take that would bring us even a millimeter closer to this goal. It's depressing.
Basically a pubic service PSP with loss financed by govs. I'm not holding my breath, and I can't imagine what could realistically be done at our level to be even an inch closer to that ideal. It's depressing.
I want the same thing from web service providers - if the content is legal then Amazon, etc. should not be permitted to refuse service.
Twitter should not be permitted to have its own terms and conditions, rather they should follow the law - it's either illegal, and ban the person, or it's legal and they must leave it up.
Maybe put a limit like: If your number of registered users is at least 5% of the US adult population, then a new set of rules kicks in.
There are some details I don't have answers for: What if someone posts things that are legal, but offtopic for the location? I don't want to prevent moderators from removing that kind of thing, but I also don't want them using it as a false reason.
I'm sure there are other edge cases I have not thought of.
And if what you say is right, how can the parent propose requiring banks to process any legal transaction?
If it's legal then banks should have no choice but to handle it.