Prior HN discussion about it: https://news.ycombinator.com/item?id=42371476
> Many regular people who get the [bank's] offboarding letter are confused and upset. Most people who get this letter are insufficiently expert in the financial system to understand what is going on. Many of them are (perhaps sensibly) enraged that the bank seems reluctant to offer answers. If they successfully pry answers out of the bank, the answers sound like nonsense or change constantly.
> Here, advocates often say that banks lack fundamental humanity, regard for their customers, or simple competence. I’d tell them that is neither here nor there, but the challenges described in Seeing like a Bank drive far more of this than malice, apathy, or incompetence as such. It is a systems issue.
[...]
> Very soon after making the decision to close your account the bank does not know specifically why it chose to close your account.
> This strikes many people as Kafkaesque. (Me, too!) It is the long-standing practice of banking in the U.S. and allied countries. It is downstream of laws passed by duly elected representatives. It was not capriciously developed as a political tool in the last few years. (We’ll get to those.)
Ok, help me understand here. Like, the laws are passed by governments. The financial institutions complain but comply to some extent. How does this benefit said financial institutions? Or am I missing something here?
Sure, but do you think the government writes them themselves? Without any input from the industry?
> How does this benefit said financial institutions?
One of the best ways to get ahead in finance is to get a regulation passed that's easy for you to comply with but hard for your competitors. That's what drives a lot of the laws.
This I totally agree with, however, the AML/KYC laws are not those kind of laws. They are super expensive for basically every financial institution, for dubious returns. And yet, governments love them. The US basically forced the Swiss to introduce these laws post GFC, which doesn't sound like it was driven by the Swiss financial institutions.
And literally the first paragaph of the Wikipedia article (https://en.wikipedia.org/wiki/Bank_Secrecy_Act) notes that loads of people sued when the act was introduced, suggesting that it wasn't driven by industry pressure.
Like, it's interesting that these laws are the template for all the ChatControl/break encryption type stuff. Governments already have all the financial information and they see no reason why they shouldn't have everything else.