"For testing purposes, these 10 account numbers should be allowed to remove cash from any of our ATMs. The testers will put the money back." It doesn't sound that nefarious. If you told me this is how ATMs are currently being tested in the industry, I wouldn't be able to contradict you.

"In production, boss?" I don't think so.

That is very nefarious. You can cancel ATM fees but withdrawing unlimited money?

Just deposit the money before withdrawing it.

...A bench test of an ATM probably doesn't involve real money. No one in finance is stupid enough to use real money on production environments for testing purposes.

There is test... And there is PROD. Never do the two meet. Ever.

If someone out there does, please make yourself known so we can get the investigators over there ASAP.

Huh? You're telling me that you think they never test ATMs in prod? That's ridiculous.

You think they're just guessing that the test environment perfectly matches the prod environment?

You can test in production if you have multi-tenancy aware services, where tenancy is some string value like Foo to make sure reads to Foo can only read data that was written to Foo.

That's not testing in production, that's just the same as saying your test VMWare environment is in the same datacentre as your prod VMWare environment.

>If Jamie Dimon asked a developer at the bank "hey can you have Chase ATMs allow these 10 accounts that are in my name to withdraw unlimited funds?" everyone involved would be in jail.

This isn't true

I worked for a large bank. I managed data for their mortgages. We bought another bank and processed their mortgages with our systems. There were several thousand accounts that we called "friends of the <former CEO>" because they had really weird terms.

A noteworthy example is: $10m Home Equity loan, with 2% interest for 40 years, and the owner could refinance any anytime without any fees

In English, this means we can't repossess their loan, they pay a super low monthly payment, and the final amount is never really due.

I fail to see the equivalence. These are just loans with weirdly favorable terms. If the other bank had shareholders, then this would be a breach of the fiduciary duty. Otherwise it's just bad business? Bad business != fraud.

Isn't it fraud if you're telling you're customers you don't and can't do this?

I'm not sure why would that be fraud - who would be the defrauded party there? Offering wildly different conditions or prices to different customers definitely isn't fraud.

The other customers have no standing there, they have no relationship whatsoever that contract between the bank and another customer, they have no legal expectation to get the same conditions or to know what conditions other customers get. If the bank explicitly and intentionally lied that no other customers get so favorable conditions, that might be false advertising but I'm not sure, I'd expect a reasonable court to interpret that a bank "telling your customers you don't and can't do this" is exaggeration/puffery (i.e. permissible) and doesn't have to literally mean that they're not doing that for anyone, it means that they absolutely refuse to do it for you.

No.

A car salesman telling you they can't sell you the new Buick for $42,000, when they sold one to their neighbor yesterday for $41,000 is not fraud.

Yeah but if the salesman told you it's a brand new Buick never been driven that they've actually been lending out to friends and driving around?

In english it means the terms are 40 years to repay the loan at a 2% rate. Not sure how that translates to never really due.

I’m assuming the poster meant refinance with the same terms. So the borrower can get another 40 years to pay back the remaining balance anytime they like.

You're right. I believe the technical term is "recast" where you take all of the outstanding balance and spread it over the course of "the next 40 years" with the same interest rate.

Another fact I omitted is that the interest rate is 2%, but the minimum payment is lower. So the borrower is accumulating owed balance because they are paying less than interesting accruing.

Given the market of the last couple of years they may actually have been able to re-finance that loan with a different bank and gotten better terms. 40 years is a long time.

> and the final amount is never really due.

Yeah??

$10M ona 40 year term and a 2% rate is like $30k/mo in payments. I wouldn't say most people would think of $30k a month a super low payment.

And now that the bank has new ownership they might be able to refinance again and continue to kick the can down the road, but they're less likely to get as favorable of terms I'd imagine.

Your math is right. I forgot to mention than the minimum payment might be less than the interest rate.

And the technical term for the type of refinance is "recast" (iirc) - so the "new bank" honors the terms because it is a part of the originating documents.