Hoisted From Comments: Banks Supporting the War on Cash

Reader perpetualWAR recounted this experience in comments yesterday:

This site has been bantering around for quite some time about the banks trying to end the use of cash. Got a story I’d like to tell you about.

I decided because of this banter, that I was going to open a new bank account at a local bank (not one of the criminal entities) and I was going to refuse the debit card and refuse checks. I was only going to deposit checks and withdraw cash. After about 4 months of this activity…….depositing checks and only withdrawing cash……NO. OTHER. ACTIVITY. First, the bank branch manager takes me out of the bank line and asks me why I am withdrawing cash over and over. I told him, “Because it’s mine.” And then he said, “We like to get to know our customers, that’s why I’m asking.” I said, “Do you know her?” *pointing to the gal in line before me. He didn’t answer. I knew that he was harassing me about the way in which I was using the bank. They don’t like people withdrawing cash.

Then, just yesterday I got a call from this same branch manager (this is Banner Bank in WA) and he says, “Apparently, you did not receive our letter we sent 2 weeks ago?” And I said, “No.” He said the bank has made the decision to close your account. I said, “Please give me a reason.” He refused. So, I said, “The only activity I conducted at your bank was to deposit checks and withdraw cash. It’s not the depositing of checks that is a problem. It is the withdrawing cash and refusing to be tracked by your debit and credit cards, isn’t it?” He agreed that this was the reason they were closing my account.

So, anyone here that believes cash isn’t at risk is absolutely in denial. The banks are trying to rid our system of cash. Believe me. I have just seen first hand evidence. Just yesterday.

As reader Jim Haygood pointed out, and even the branch manager’s choice of words appears to confirm, the bank may have been acting on “Know Your Customer” rules, treating him as a money launderer for making too many cash withdrawals. But if the rules actually specify “frequent or large cash withdrawals” as opposed to “unusually high proportion of activity in cash” they aren’t targeting money launderers. Money launderers want to get cash into the banking system through legitimate-looking channels. If you see a restaurant, food purveyor, or a low end jewelry or accessories stores that stays in business despite never have any customers in them, the two most likely explanations are: rich husband keeping bored wife busy with a store as her toy or money laundering. And in New York City, there are a lot of retail stores that fit the profile.

Readers: have you had any experiences with banks being difficult about cash transactions? And to those of you who know retail banking: was Banner Bank making a reasonable interpretation of “Know Your Customer” rules or not?

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  1. gardener1

    Our accounts are with a credit union, also in Washington. We have no auto pay, no automatic deductions, no online banking, none of it. Paycheck in, cash money out.

    We almost never use our CU debit card, every Friday we withdraw in cash operating money for the following week. We pay for nearly everything we buy in cash.

    Knowing this has been coming for a long time, every Friday we withdraw more than what we’ll need for the week and stash the extra. After a few years of this I have a fat collection of $50 and &20 bills. In the last month we’ve been getting our weekly cash in fresh crispy $100 bills, and I intend to continue my collection of hundreds.

    We have never been questioned in any way about our account habits or our cash withdrawals.

    Slow and steady wins the race and doesn’t attract attention.

    I’m thinking that soon I’m going to go on a 22k jewelry buying binge. I’m going to turn some of this cash into wearable wealth. We plan to retire abroad and when we do, I’m going to wear it right onto the airplane and right out of Dodge. I know this is possible and do-able, as I’ve done it before.

    1. arkan

      Nice except that resale value of the jewelry can be quite low usually. Do you have a way around that?

      I tried hard not to get online banking, specifically asking my regional bank to disallow online access to my account to prevent web-based fraudulent transactions. The bank wouldn’t allow it; the closest I could get was just not activating my atm card and burning the checks.

      1. reslez

        If you’re buying gold jewelry (especially 22k) as opposed to gems or diamonds, the resale is whatever you’d get for gold. Another alternative is to buy resold jewelry — not retail — that way you know the markdown because that’s what you paid.

        1. Lord Koos

          And gold is now officially in a bull market once again. Gold jewelry is a good plan, I’d say.

          1. run75441


            But you go to Thailand, take a Thai with you and buy 22 carat. They sell by the gram. 90% of the price is the material and 10% is the design. It has probably gotten ridiculous since I bought gold at 10 – 12 dollars per gram.

            Thais would pay debt in gold.

            1. gardener1

              Yep. The same is also available in the US, usually in shops largely run and patronized by asians. I have been in these shops.

              22k sold by the gram, I’ve seen spools of gold chain and they just reel off however much you’re buying and attach a clasp if you want, and off you go.

              I worked as a driver for Big Brown for years. Had a pickup once at an Indian jewlery store, had to be buzzed in the door. Inside there was wall-to-wall the most fabulous quality high karat goods I have ever seen. It was staggering. Bullion quality stuff.

              That’s what I’m talking about.

            2. Pavel

              Same thing in Singapore — especially in the Little India district but also in Chinatown. There is a bullion shop I’ve visited that sells a full range of gold chains of different purity and weights.

              When I saw a photo of an Indian bride draped in gold jewelry (her dowry, I assume) I realised — to paraphrase Laurence Sterne– “They order this matter better in the East.”

              In Singapore the banks will have a precious metals counter selling gold and silver. I’ve seen people in their 20s and 30s queueing up to buy bullion. How many banks in the US or EU do this?

          2. Lune

            If your goal is transporting money, and you don’t care much about how the jewelry looks, you can easily do it, even at the retail level.

            Just go to a jewelry store in any Indian shopping district (Jackson Heights in NY, Devon Street in Chicago). In addition to all the fancy jewelry, they will have some plain-looking bangles and necklaces made completely out of 24k gold. They will be thick and heavy. These are made specifically for people looking to smuggle gold into India without being hassled by customs (FWIW, it’s legal to bring up to 10kg of gold into India as an NRI, but good luck not having to ‘share’ some of that with the corrupt customs officials if you bring it as coins). Since the gold will be melted and made into actual jewelry (or stored) in India anyway, it will be quite plain, but fancy enough to pass as jewelry. And you can buy it for usually under 5% markup of the gold value (if they’re quoting you more than this because you’re white, go to another store. Almost all of them will be selling it, and they compete on price, not the looks of the jewelry).

            Depending on how bling-ed out you want to look on the airplane, you can easily walk through any customs in the world with a pound or two of gold with minimal hassle :-)

    2. different clue

      I wouldn’t stash $100 dollar bills myself. I read somewhere that so many $100 dollar bills move through the cocaine economy at some point in their life that they all have just enough cocaine on them/in them to set off a sniffer dog, providing a handy excuse for any authority with a sniffer dog to strong-arm rob you of your $100 bills any old time he/she feels like it.

      But yes, I too do a lot of cash withdrawing ( and spending it all) from my credit union and they have not been concerned. Perhaps because my amounts are so small in the grander scheme of things.

      1. RUKidding

        I travel internationally on a regular basis and often have US $100 & $50 bills with me, as they’re routinely desired in some foreign nations. I’ve never ever had any issues with cocaine sniffing dogs, and I know they’re around. I don’t think that’s a problem, quite honestly, although I’ve heard that before. Just my humble 2 cents worth.

      2. reslez

        The bigger danger is just that the cops will confiscate it during a traffic stop. They routinely seize cash from people and you have to sue to get it back. They don’t have to charge you with a crime or arrest you to do this. It’s called civil forfeiture but amounts to legalized highway robbery.

    3. laughingsong

      Same here: credit union, auto deposit of paycheck, large chunk of cash withdrawn every week for local shopping. This decision had more to do with us mostly shopping at small local stores for our stuff and knowing that using cards eats into their profit. I write the occasional check, maybe 2-3 a month. I do use online banking, mostly to pay bills (NOT automatically though, I like to control EXACTLY when the money leaves) and to make sure no unknown charges have appeared because we do occasionally use the debit card and therefore any compromised scanner could possibly allow ID theft.
      Our Credit Union never bothers us about the large weekly withdrawals or low usage of debit. We have no credit card there.

    4. Yves Smith Post author

      I would not advise buying jewelry. You buy at resale and sell at wholesale. Retail markups are typically 3X wholesale due to how slowly inventory turns.

      You used to be able to treat loose diamonds as a decent store of value, and you could buy those in NYC’s diamond district for very close to wholesale. But now with diamonds being manufactured, I would not assume those would be a good store of value either.

      Not sure pricing on eBay is any better, these are jewelry stores offering their wares online, so I’d expect to see the same markups.

      You might come closer to wholesale by buying at auction. I’d stick to signed pieces by known makers, like Cartier, Van Cleef & Arpels, or secondary but still well regarded designers like David Webb or Seaman Schepps.

  2. digi_owl

    Thing about cash for banks is that it is an actual “expense”.

    They can only have so much cash on hand.

    But with debit cards, it becomes all a matter of accounting. Customer A transfers to customer B either with the same bank or with another bank, and all that needs to happen is for the ledgers to be updated.

  3. cwaltz

    My experience was with the government having a problem with cash transactions. When we went to purchase our house using an FHA loan I placed cash that I had saved into the account that would be used as our down payment. Big mistake. They required us to write a letter explaining where we got that cash from. We’re not talking tens of thousands of dollars, we’re talking $1000. Since our down payment account was separate from our day to day transactions we literally had to draw the point A to B lines from the one bank account to the other every time we added to our down payment- it was insane.

    1. jrd2

      I think you ran into a different issue. Any reasonable mortgage underwriter wants to know the source of funds for a down payment to make sure that it was not borrowed, or worse, provided by the seller.

      1. cwaltz

        You can actually borrow money for a downpayment. Parents lend their kids money all the time for a first home purchase.

        They had pay stubs that showed we had an income stream that would cover more than the cost of our mortgage(and he’d had over a decade at this workplace) so I’m not sure why it should have mattered where we got a downpayment from. Apparently it did though. *shrugs*

        1. TomD

          The parent-kid down payment loan is actually illegal. Learned that in the Wire.

          Or at least it is in Maryland.

          1. bob

            Federal crime.

            Call it a gift, and report it that way, and you’re fine.

            Try to pay it back with any sort of trail, and they’ve got you. It wasn’t “your” down-payment, it was a loan that was not reported at the time of the mortgage. Without the down payment, most people wouldn’t qualify for the loan, and the bank wouldn’t have made it.

            It’s one of those little crimes that lots of people do, but if the feds want a reason, it’s a giant stick they can use as a cudgel.

    2. LifelongLib

      I had a similar experience 20+ years ago with our FHA loan, but it was the mortgage lender (not the government) asking the questions. My mother-in-law gave us money for the down payment. Initially we put it in our checking account but then moved it to our savings so we could get a little interest until we actually had to pay it out. The lender asked us where all this extra money had suddenly come from. We had to explain that it was the same money being moved around.

      1. bob

        Be careful with that, and describing that. If it was a ‘loan’ from your in-laws, and you used it as a downpayment without describing it as a loan, it’s mortgage fraud.

        It’s done all the time, but it is illegal, in fact.

        Where people normally get caught by this is in repaying the ‘loan’. The records of checks going from you to your in-laws.

        I’d urge you not to elaborate further, or again.

      2. bob

        Probably also worth noting here that one of the “best ways” to do this is to borrow the whole purchase price of the property from the in-laws- if they can afford it. Let them hold the mortgage.

        Using this, and certain gift provisions, is another way that well off people disperse assets as they age, keeping the assets out of any estate that might be taxed on death. I don’t remember the exact details, but it’s a pretty well known and widely used scheme to ‘loot’ the estate.

  4. Wally

    WA State, Chase branch. Even several years ago, when withdrawing cash (generally in the $200-600 range) at a teller line i would ALWAYS have to answer the tellers ‘innocent’ questions as they counted out my Benjamins: “Ah, a lot of cash, what are you going to buy?”

    As politely as I could, I would say “None of your fucking business”.

    Well, maybe I wasn’t really polite.

    1. susan the other

      hasn’t this been going on for a long time here in the US? almost 30 years ago they limited cash withdrawals at my then local/state bank (since become a wells fargo branch). back then i withdrew $3,000. to pay the house painter in cash and the teller chatted me up like a nosey neighbor. it made me very uncomfortable.

    2. bob

      Why do people have a problem flat out lying to these tellers. “car” or car parts, no problem

      There is nothing that says you have to be telling the truth when you respond to them.

      If you really want to make them uncomfortable, tell them you’re starting a sex toy shop. Describe in graphic detail, and size, what you will be buying with your huge pile of cash.

      You’ll get your cash quick.

      Just because some asks you a question doesn’t mean you have to answer it truthfully. No law against lying at that level.

      That being said, if it’s ever a federal law enforcement official, ” I want a lawyer” should be the only answer. You can be charged with lying to them, even if you don’t know you’re lying.


  5. reslez

    My parents do most of their shopping with cash. They make regular cash withdrawals and think nothing of walking around with cash in hand when they’re making a big purchase. However, their accounts have been open for years and they use other banking products as well. Debit cards, checks, loans. They only use credit unions.

    It’s funny how the government always finds a way to inflict painful rules on the little guy/end customer while totally ignoring outrageous corrupt behavior on Wall Street. In addition to intrusive surveillance, however, I wonder if Banner Bank was worried they wouldn’t make enough graft off the reader. If you do all your transactions with deposits and cash, do they take in enough fees to stay in the black? A lot of banks these days seem to be based around “gotcha” fees and spring loaded fines. This is exactly why my parents prefer cash, btw. I gather they had a bad experience decades ago and learned how often the banks get things wrong at their customers’ expense.

    All in favor of post office banks say “Aye”…

    1. Carla

      In our current state of crapification, I suspect that any postal banking scheme enacted would involve a “private partner” such as BOA, Citi or Chase to operate the banking functions and skim off the profits (and they’d make sure it was profitable). After all, Chase has the national food stamp (SNAP) franchise.

      I think we have to wrest the postal service from its current condition of partial privatization before postal banking would offer an effective alternative. When a fellow activist and I were outside our local post office getting signatures on a petition to put an issue on the ballot, the manager came out, told us we were on private property and ordered us off it. “You’ll have to stand out on the street at the bus stop. That’s public property.” I replied “The US Postal Service is public when you want it to be, and private when you say it is.” Nevertheless, we had to leave.

      1. reslez

        > I suspect that any postal banking scheme enacted would involve a “private partner”

        I’m willing to fight that battle, hopefully you are too. Or are we just going to admit defeat and vote for Trump? /s

        1. Carla

          Sure. I’m a fighter. So what are we doing about the payday lending industry gutting the CFPB’s attempt to curb predatory lending? What did we do about Congress handing the FDA to Big Pharma on a silver platter with their confirmation of Califf as FDA Commissioner? What CAN we do?

          I’m a little confused, reslez. Was your whole comment /sarcasm or only the second sentence?

      2. MaroonBulldog

        In my town, many branch post offices are located in leased spaces, as in strip malls.

        If the post office you write of was in a leased building, rather than in a government owned building, and you were on the sidewalk outside, then you probably would have been on private property, not public property.

        Also, not all property owned by the state is public property. All public property is owned by the state, but the reverse does not hold. All property owned by the state is not public property. There is such a thing as state-owned private property.

        1. Carla

          The post office in this case is a free-standing building built in my city in the 1990s by the US Postal Service.

  6. Andrew Anderson

    All in favor of post office banks say “Aye”…

    With respect and fondness, not me! Citizens should be able to deal directly and safely with their Nation’s fiat just like the commercial banks and other members of the usury cartel do via inherently* risk-free accounts at the central bank ITSELF. Anything less violates equal protection under the law. Accounts at a Post Office Bank, like accounts at a commercial bank, etc. are likely to contain mere liabilities to fiat and thus the Postal Bank would be in charge of the actual reserves backing those liabilities and thus could lend them via inter-bank lending to the enemy, the usury cartel. That defeats the purpose!

    *Meaning government-provided deposit insurance could be abolished.

    1. Yves Smith Post author

      Central banks are ever and always bankers’ banks.

      Do you see all the retail bank infrastructure and personnel that are required to serve retail customers? Do you seriously want the Fed controlling all of that There’s an absolutely enormous amount of operations involved in providing pervasively-used retail services. Honestly, you need to get a grip.

  7. Andrew Anderson

    All in favor of post office banks say “Aye”…

    With respect and fondness, not me! Citizens should be able to deal directly and safely with their Nation’s fiat just like the commercial banks and other members of the usury cartel do via inherently* risk-free accounts at the central bank ITSELF. Anything less violates equal protection under the law. Accounts at a Post Office Bank, like accounts at a commercial bank, etc. are likely to contain mere liabilities to fiat and thus the Postal Bank would be in charge of the actual reserves backing those liabilities and thus could lend them via inter-bank lending to the enemy, the usury cartel. But that defeats the purpose!

    *Meaning government-provided deposit insurance could be abolished.

    1. TomD

      Even if your scenario, surely post offices would make perfectly fine locations to access said banking services.

      1. Andrew Anderson

        If local post offices, ATMs and the Internet should be able to provide all the services a central bank should and may properly provide* (and I think they should be able to) then it follows** that bankers should have to stand in the same lines we all do at the Post Office to access those services.

        So yes, local post offices for central bank services should be fine as long as bankers receive no special privileges there or elsewhere either such as other central bank facilities reserved for them.

        That said, de-privileging the banks, credit unions, etc. deserves careful thought and planning and should not be lightly undertaken. Nevertheless, it is an eminently solvable problem when guided by the insights of MMT and by ethical principles such as, and especially, equal protection under the law.

        *eg. risk-free fiat storage and transactions, debit cards, cash dispensing, deposit acceptance.

        **Since fiat is the money of a Nation’s citizens then the place where it is stored (besides physical cash), the central bank, is the citizens’ bank and should treat all citizens equally under the law.

  8. Swendr

    I have to take BSA training to serve on the board of my credit union. Without more detail, it’s hard to say, but this looks like a classic case of Enhanced Due Diligence required of institutions that have determined a customer to be an increased risk for money laundering or terrorist financing. Just a guess, but if the institution had to file multiple Suspicious Activity Reports based on the volume of cash moving either in or out of the account, this may have triggered EDD as spelled out here: http://www.ffiec.gov/bsa_aml_infobase/pages_manual/OLM_013.htm

    BSA essentially deputizes all bank employees and officials to perform these policing functions on retail banking. It’s shameful.

    1. Adam1

      I agree this is classic anti-money laundering and bank secrecy regulation behavior. The initial author/commenter doesn’t say how much money he was withdrawing but he very easily could have hit an automatic report trigger. Or his repeated cash withdrawals caused an employee, including possibly a new, very young teller to overreact and to file a suspicious activity report which can be filed regardless of the actual amount of cash being transacted. Once filed the bank is obligated by regulations to figure out why the customer is transacting in so much cash and there is a time limit on it too. In this case I am guessing the bank was not able to identify the customer’s needs and felt compelled to close the account to remain in AML and BSA compliance. Also note, the bank employees are legally not allowed to tell the customer that they are investigating him or that a SAR was filed; hence the indirect line of questioning by the branch manager.

      1. lyman alpha blob

        Hard to tell without knowing the amounts involved by I suspect you are correct that an overzealous teller filed a SAR. I worked at WAMU before it became the biggest bankruptcy in history and we were told to file a SAR for all $10K cash transactions or above, but also if it appeared a customer was trying to avoid the $10K limit by using more smaller cash transactions as any decent money launderer knows what the limit is.

        1. PaulHarveyOswald

          As far as I know, this is the law for any bank. I worked at a (small, local) bank in high school–back in 1980–and the reporting limit then was $10K. Funny how that number has not gone up any. But, IIRC, we were not encouraged to be an extension of the FBI any more than that.

        2. Steve Gunderson

          I can understand if someone was depositing $10k ( or small increments to stay below $10k ). But why would taking money out that was received via paper check or EFT be a link to drug dealing or terrorist activities??

          1. lyman alpha blob

            It shouldn’t be considered that way however the front line bank employees are often young and not well educated. They are given all kinds of rules they need to uphold at all times or they will be written up and/or fired. I used to get in trouble quite a bit for using my own correct judgment rather than follow the regulations to a tee…

            1. bob

              They like bank tellers scared. They tend to hire them for that reason.

              I knew one young woman who worked at a bank who was, quite honestly, an idiot. Not malicious, but just stupid.

              They ended up giving her the ‘responsibility’ of checking to make sure that manager had locked the vault at the end of the day, and signing off on it. She would have signed anything her boss told her to.

              Manager supposedly didn’t properly close the vault one day and she signed that he did. She was fired.

              Some of the reason for wanting stupid, scared people is that in the past most bank robberies were inside jobs. Now, in the post cash world….Why?

        3. Gaianne

          Right. So even though the $10 000 limit has never changed in law, in practice they just keep dropping it. Nowadays $3 000 is informally considered proof of drug dealing (it is up to you to prove otherwise–un-Constitutuional?–Duh!) and it just drops lower every day.

          As this plays out it becomes apparent that this was never, ever about drug dealing. I mean, try running a small business! You can’t do it–not without being targeted.

          And that is the whole point.

          The Big Corporate predators want total control.


        4. Lune

          Actually, be very careful with this. Withdrawing >10k is perfectly legal, as long as that money is used for legal purposes. Although you will be subjected to more scrutiny, as long as that 10k wasn’t for money laundering or drugs, you will be fine.

          OTOH, withdrawing 9k every week is illegal *regardless of how you used that money*. It’s called structured withdrawals, and it’s illegal in and of itself. The assumption is you’re deliberately structuring your withdrawals that way to evade scrutiny, and that’s a crime.

          For a recent example, former House Speaker Dennis Hastert was indicted on federal charges of structuring his withdrawals. The speculation is that he was making monthly hush money payments to a former student of his (he was a high school wrestling coach) whom he molested. However, that was not what he was charged with. He was charged with structuring his withdrawals to evade scrutiny, and he pled guilty without the Feds ever even having to investigate what he actually used that money for. Ironically, if he withdrew >10k each month, he’d probably have walked away scot-free because the actual molestation is now beyond the statute of limitations.

      2. Elasmo Branch

        The AML and BSA regulatory regime must have ulterior motives behind their enforcement. Real money laundering happens through logistical business networks of accounts payable and accounts receivable. Say Omni Consumer Products is building Robo using widgets it sources from overseas OCP subsidiaries: widgets flow one way, credit goes the other. The actual number of widgets and the set price per widget is completely disconnected from the actual payment figures. Corporations do this legally to load subsidiaries up with bad debt that would otherwise sully the flagship entity’s books. Another option is surreptitiously replace tonnages of commodities on ships and arbitrate a net gain or loss. The weight and volume seem the same but the exchange actually on- or off-loaded commodities of different values. For any LEO’s out there, I’m just regurgitating your PATRIOT ACT lesson plans.

    2. Jim Haygood

      Search “Know Your Customer software” and plenty of commercial providers turn up. Here’s an excerpt from one of them:

      “Customers with limited financial resources or with a social or professional profile that is not compatible with high transactions or the planned conclusion of an insurance contract must be taken as an alarm signal by banks and insurance companies.”

      Read between the euphemisms: if you’re poor, or (far worse) a non-professional who’s actually beaten the system and accumulated some funds, then you are persona non grata.

      The bit about “social profile” is extremely Orwellian. Show up with $10 million, dressed like Mark Zuckerberg in your venture capital jeans and hoodie, and you’ll feel the love from the Private Banking Division.

      But stroll into the bank lobby in your contractor T-shirt and Chippewa work boots with $20,000 in hand, and you’ll get the cold fish eye: How could a lout like you have money like that?

      This is what happens when laws are drafted by bright young upwardly-mobile lawyers who staff Congressional committees.

      1. bob

        Cripe, that’s also how they put a bottom under California RE in 2008.

        They legalized pot. Tons of money came out of closets, and went into- buying foreclosures.

        No need to account for cash PAID to a bank, only cash deposited into a bank. Buy a foreclosure, and then….”hey, I heard you just ran into some collateral. Would you like a mortgage with that?”

        Buy a lawyer to do the actual transaction with an LLC and it’s done. Lawyers, in suits, with briefcases full of cash, representing investors? No problem.

        I said at the time that 2008 was a money launderer’s dream. Cash only? Front of the line, as long as you have a suit on.

  9. Teddy

    I live in Poland and while I often complain about backwardness of payment systems here (domestic checks are nonexistent, cashing foreign checks takes weeks, nobody even knows what money order is, stored-value cards are illegal because they don’t fit into framework of outdated law); reading such ridiculous stories makes me happy that I don’t live in a ‘civilized’ country.

    Here in Poland cash is the king (80% of retail transactions are made in it, and that’s without factoring informal economy), even large payments are often conducted with it (how else do you pay for say, car, without banker’s draft or money order?), government benefits can be received in it, main pitch in banks’ advertisements consists of guarantees of free withdrawals from ATMs, AML-KYC laws are loose and mostly are paid only a lip service, distrust of banks and other public institutions is common and thus mattress-stuffing is too, contrary to the trend of eliminating large-denomination notes central bank actually plans to introduce even larger one in near future (with current exchange rates it would be worth more than US $100), there’s a wide network of businesses providing services for the unbanked (including postal banking), while corruption, organized crime and tax evasion are facts of everyday life (maybe a bad thing, but it guarantees that everyone from unskilled builder working off the books up to prime minister is an unlikely ally in War on Cash).

    If something like this happened in Poland, it wouldn’t be a story for blog comment, but for major newspapers, and bank which pulled such crap off would be guaranteed to lose customers. Of course mass surveillance/anti-cash lobby exists here, but even they frankly admit that they have their work cut out for them.

    TL;DR: War on Cash is unlikely to succeed outside of Western Europe and North America due to combination of underdevelopment and common social attitudes. Stories like this make me happy that I live in backwards banana republic.

  10. ambrit

    A linked phenomenon to this is small shops that give ‘discounts’ for cash sales, or, our oriental grocery store does this, charges a dollar for card purchases under five dollars. Kidding around with the woman checking me out, the wife of the owner, both Han Chinese, I asked if this was because of the banks. “Very much yes!” was her reply. “On some small item, bank charge larger than profit. Bad for business.” I couldn’t argue with the vendor about her business. This is a regressive stealth tax. I always carry some “walking around money” now.

    1. Art Eclectic

      That’s why I try to pay cash when shopping at small stores, especially Mom & Pops. They’re probably already hanging on by their fingernails and I respect their efforts to maintain a business in the midst of massive chain stores.

      1. bob

        Agree, cash for small business, CC’s for big stores.

        No use ever for Debit. Don’t understand why people use those things.

    2. evodevo

      Yes. This. I agree with her completely. We have a sign on the counter at our little small town antique/gift store – “Cash only. We do not accept credit cards. The bank doesn’t sell retail and we don’t make loans.” We get solicitations every day in the mail touting credit card scanners, etc. NOT interested. They are very cagey and don’t mention all the hidden fees associated with credit card acceptance. It’s a major expense for any small business.

      1. diptherio

        And the rewards cards are the worst. Most people don’t realize that their “free” air miles are, in fact, being paid for by merchants. From a small business standpoint, cash is probably best, followed by debit cards with PIN number (~.5%, iirc), Normal MC and Visa (~1.25%), and then rewards cards, Discover, AmEx, etc. (~2%) [trying to remember details from a brief foray into food service, so the numbers might be a little off]. Checks are too risky to accept, unless you really know your customers, in my limited experience.

        1. RP

          For small businesses, the %s are all higher. Nobody in the small business community here takes Amex, it can run as high as 4%. The “rewards” cards are the worst. Guy in Mercedes blows through, buys a Red Bull and a Snickers for $3.50, and the credit card parasites make more than the store does. Ridiculous.

      2. evodevo

        A comment from my husband, partner in the above mentioned antique store, detailing the experience of a couple of his friends who own small businesses in local small towns in Ky:
        “A small business owner recently told me that he pays about $2000 / month for credit card services. He owns a local NAPA car parts store. Another told me that he signed a contract for the service and instead of $30 a month it turned out to be about $1000 / month. He never used the service because he only sells used cars and no one buys a used car on a credit card. His thought was that a person could put down an initial deposit. Long story, but they lied to him about the fees, the credit card company threatened to sue him, so his lawyer invited them to try and said he would find them a place to stay in his small town while the trial was going on with a local jury. They gave up. However, he had to close his checking account and open another to stop the automatic payments. Yes, I continually get solicitations to sign on and I hang up on them. If the business owner does not use their equipment for chip cards, the owner is responsible for all fraudulent and contested charges. I only accept cash or checks. There are 3 banks on the block and several ATM machines. If you are dealing with a small business, you can usually get a discount of 3 – 4% or more by offering cash instead. Doesn’t work at Walmart !”

  11. Pavel

    Interesting and important post and comments.

    I recently deposited a large-ish check into my internet bank account and was told it was held until I spoke to an agent. They wanted to know:

    –the source of the funds (it was a check, for god’s sake, not a suitcase of $100 bills)
    –what I intended to do with it(!)

    I was suitably offended and intend to close the account as soon as I finish withdrawing cash from ATMs in $300 installments.

    Two other notes:
    * This is partly cultural; in Germany people frequently use cash, even (I am told) to buy automobiles and the like. I go to a bar in Japan where they only take cash. I gather there are a few hipster joints in Brooklyn that are cash only, as well.

    * Contrast the bank’s treatment of perpetualWAR with the DOJ’s slap on the wrist Citibank and HSBC got after well-documented money laundering on behalf of Mexican drug lords.

    1. Carla

      A popular local family-owned pizza joint of 50+ years standing takes only cash; conveniently, there is an ATM installed in the front vestibule of the restaurant. I’ve often wondered “Hhhmm, how does a single-outlet business like this rate its own dedicated ATM?”

      1. John Zelnicker

        Most likely the ATM is owned by a private non-bank company which receives the fees charged by the machine for withdrawals. Of course, the card-issuing bank may also charge fees for using an ATM they don’t own.

      2. HotFlash

        Is it a bank ATM or a third-party one? The third party ones pay rent, the bank ones are usu a deal. EG, my little corner convenience store has a Royal ATM, b/c that building was once a Royal branch and Royal still owns the building. Gas stations have deals, too, all one brand has ATMs for the same bank, and snack outlets for the same donut company.

      3. jabawocky

        My belief is that it is these opportunities for skimming that are partly driving the assault on cash, and most card services providers are linked to banks (ours to HSBC). Just being ble to process visa payments costs $$$ per month, and all sorts of other fees are thrown at you that are not possible when dealing with cash.

        I have had trouble with a merchant services provider (MSP) skimming money off at will. A scandal waiting to break is PCI compliance. This is supposed to be a process which ensures safety of customer card data when it is stored on the computer systems of merchants, but of course banks wouldnt overlook an opportunity for skimming, this case being apparently unregulated ‘fines’ levied on merchants for not filling out a form demonstrating compliance with their security standards.

        I recently took over a small charity account that receives donations online via a MSP. I was shocked to find they were fining us £50 a month for not being PCI compliant, this from a very small income and on top of £25 per month in fees, plus an unfathomable charge for each transaction. To be PCI compliant you basically have to fill out a form describing how your storage of customer data meets their security standards, and helpfully our CSP owns another company that helps you meet compliance, for another fee of course. The scam here is that our charity handles no customer data and our MSP knows this because we use their web payments system which handles and stores all the data remotely on their servers. So as long as our MSP is compliant so are we, and of course they know this. So in effect we were being ‘fined’ £50 per month by the MSP for not telling the MSP what they already knew, and were charged again for telling them. Because it took a while to change treasurers at oiur charity this contuned for several onths before i could stop it resulting in hundreds of pounds of losses.

        1. diptherio

          Given the high fees that MSPs charge businesses, I would think that small businesses would be some of the biggest losers in a switch to a cashless economy. When I worked at a small local restaurant, I started telling customers to please use debit with a pin or a regular CC (no rewards cards!) if they didn’t have cash, which was our preference.

          ISTM that the move to a cashless society will mostly be for the sake of diverting yet more income to the processors, MSPs, etc. Cash is cheap and low-risk as a payment mechanism, which is why it must be gotten rid of, so far as the financial industry is concerned.

      4. bob

        Cash only retail business? There’s a few I know of, and all stink of tax avoidance(under-reporting income, big stack of cash at home), or don’t stink at all and are used as inputs for money laundering. They OVER report cash income. Taking a few hundred of dirty dollars a day and cleaning them by putting them into the till and claiming they sold more pizza than they did.

        1. Robert Dudek

          Saul Goodman explained the basics of money laundering quite succinctly in “Breaking Bad”.

          1. bob

            Yeah, that was one of the few times I’ve seen it described well on TV. Memorable only in that it was more or less correct.

            Now how was the chicken king legalizing his cash? Where? At what level? Lots to pick from, or spread it between.

    2. Uahsenaa

      In Japan, credit cards and debit cards exist, but are not all that commonly used. And certainly all those little shops on the road to Kiyomizu and other such tourist traps only take cash. I remember there was a big push a few years (decade?) ago for people use what was then called saifu keitai, basically an RFID chip in your cellphone that was connected to a bank account, and you would swipe your phone over a sensor at the counter. As far as I recall, it didn’t really catch on. Cash is still king.

      That said, larger purchases are typically made using wire transfers, which can be done from any atm.

      1. CRLaRue

        I lived and worked in Japan 84-2001 and remember that the government
        employees where paid in cash,if requested!

      2. Art Eclectic

        I worked on a program here in the US a few years ago for Korean grocers and found the same thing. Their customer base (even for the larger stores) generally pays in cash. Owners told me it was considered “downmarket” to pay in credit because it appeared that you didn’t have money if you paid by card. Cards weren’t money – cash was money.

      3. reslez

        If you watch some of the new K-dramas you’ll see characters asking shopkeepers to accept cell phone payments instead of cash… it makes me suspect there’s a push to get electronic transactions more accepted in the culture.

  12. Bas

    Back in 1992 I was a legal secretary for a small firm in Annapolis, and initially cashed my checks at the bank they were drawn on because I did not want them poking their noses (they were very nosy lawyers) into my personal business. After I had done this a few times, the paralegal confronted me and asked me why I was doing this, accused me of being a drug dealer, and said that cashing my checks at their bank was unacceptable.

    1. divadab

      I think you’ve put your finger on the issue here – overzealous busybodies. I used to do work for a business that employed a lot of low-wage piece workers, many of whom had no bank account. SO they cashed their paychecks at the COmpany’s bank. We had a constant fight with the bank trying to charge employees $5 for the privilege of cashing a check drawn on that bank! SO I think another contributing factor is that people who use a bank account to deposit checks and withdraw cash are not profitable. SO why not use money-laundering regs to drop unprofitable customers? No greater conspiracy to get rid of cash is needed.

      1. Bas

        I also think there is an insidious control element at work related to something like market research. That law firm wanted to “know” me–they wanted to know where I banked, and had numerous ways, being a firm that did criminal work, of finding out anything they wanted to know about me that they really had no business knowing, but it would help them if they wanted to manipulate me. They pretty much treated me like a plaintiff who might be suing them. Which makes sense in retrospect because the senior partner was later investigated for billing his para out at his rate. I did not last long there.
        Now, the electronic trail tells where your preferences are and if you are not aware, allows businesses to ambush you and lead you to their services, much like tracking on the internet. Using cash makes them wild–it’s like shutting a door in their faces–and how dare we, lol.

      2. amousie

        8 years ago, I tried to cash a check where the account resided. First the bank wanted to charge me $25, they called the check originator in the background without telling me, and even though they had my signature on file (POD on this particular account) they wanted me to sit down with a bank manager and be fingerprinted. Said it would only take another 20 minutes or so after standing in front the teller for 15 minutes.

        I had an account elsewhere but didn’t want to drive across town in rush hour. I waited until the following week. If you were someone who didn’t have an account somewhere and was just squeaking by on small say handyman type jobs, $25 off the top might be a huge hit. Hell, $25 is a huge hit period.

    2. washunate

      I’m curious about something logistical as well. How does a paralegal know your banking interaction? That should only be known by accounting/payroll/HR/whatever and perhaps a finance director that reviews cancelled check activity and maybe an outside auditor if they happened to spot check an activity that involved you.

      Was the bank charging the law firm for check cashing services and the paralegal receives the billing for that? Even then, I would think the paralegal wouldn’t be authorized to be opening those bank statements.

      Basically, it sounds like a great, juicy lawsuit if only the statute of limitations wasn’t likely expired on that. At least a fun complaint to the EEOC. Organizations that don’t allow check cashing generally don’t write checks at all; they have an explicit policy that as a condition of hire you must enroll in direct deposit.

      1. Bas

        I agree, but small firm, bookkeeper told attorney, attorney told para to talk to me, is what I think. Those people were not good at following the law, lol. The senior partner was forced to retire after grievances were filed against him. And I would have loved to take them to court, but it would have destroyed me financially. There were other things too. They fell apart without my help.

        1. washunate

          Thanks for sharing. Sorry if that is traumatic reliving it, but I’m always fascinated about the tendency we have in some circles to think that because someone is highly educated they’re not a sleazy jerk abusing a position of authority.

    3. oregon don

      in the mid 80s I was working out of town, I always cashed my paycheck at the issuers bank and branch.

      one Fri evening I tried to cash my check and the teller told me she could not cash it because I did not have an account.

      I replied with “this check is drawn on this bank and this branch ! Is this bank out of money?”

      with each word going up an octave, needless to say soon I was talking to a manager.

      she asked why I did not have an account, I told her that at the time “they had a policy of keeping $25 when people closed their account and that no bank was keeping my money”

      she replied that that had been changed but I still did not get an account

  13. Disturbed Voter

    All the money in all its forms, belongs to the government … they produced it, and loaned it to you (with loan interest going to the Federal Reserve). The IRS is part of the government enforcement … and with them you are guilty until you prove yourself innocent. The US has been a nation of happy slaves for over 100 years now. There are constitutional alternatives, if people choose to use it.

    1. Robert Frances

      Don’t forget the part where the US gov has borrowed $18 Trillion from the world’s very wealthiest to finance the current US money system. Last I read, approximately 15% of the annual US budget is used to pay interest on these borrowings. Nice system, at least for the very wealthy.

  14. mars_spirit_rover

    At Citibank I filled out a paper deposit slip (from my checkbook, pre-printed with my account number) for a $250 check and $125 cash. I knew banks were skittish about cash so I handed my photo ID to the teller along with the deposit. She said “I need you to swipe your card.” And I said, “why? you have my deposit slip and an ID.” She replied, “if you’re not going to use the card, you need to write down your occupation before we’ll accept the cash.” I said, “fine, I’ll take the cash to my credit union.” The irony is, if I’d walked in with a suitcase full of cash they would have given me a private investment consultation and asked if I wanted a beverage. OK, probably not.

    1. Lord Koos

      Anyone who is still using a bank rather than a credit union should think about switching. We like USAA (usaa.com) which is available to anyone in the service, or anyone related to someone in the service. My dad was in the army in WWII so we qualify. Among other things, you can save a lot of money on fees, for example USAA pays for ATM transaction fees on any ATM, anywhere in the world up to $15 a month.

      1. bob

        Any military related banking institution is usually rock solid. Stop paying the troops, or loose their money, and things start to look wobbly.

        Unfortunately, it also works the other way. Car dealers near bases are notorious for completely screwing over troops with “financing” that they could get though outfits like the USAA at 5-10% less.

        If you as a troop, (property of USG) stop paying your bills, uncle sam will pay them for you. Just talk to the CO. Zero risk loans at usurious rates. But, it’s a vette!

        They’ve tried a few times within the mil to require financial training, and if you look, you can find it, but DC is still dominated by those who make lots of money off the troops. The mil aslo doesn’t want too many smart ones either, no good for re-enlistment rates. Keep them in debt just enough to realize that they only job waiting for them is fast food. That deployment bonus looks pretty good now…

  15. Screwball

    My story is different, but I also find it very strange.

    I took a bag full of coins to my bank last Thursday afternoon. It was 15.2 lbs of assorted change. I gave them the bag with a deposit slip in it and said they could throw the bag away. I’m guessing this is about 300 bucks.

    On Tuesday this week, there no posting of the money, so I went to the bank to see why. They said they have a week to post it. As of this morning (a week and a day) there is still nothing.


    I don’t need the money so that’s not an issue, but what if I did? I also have another 40-50 lbs to deposit. At this rate it will take me over a month to get this done.

    No, they do not have a coin counter in the lobby, nor will they accept rolled coin. WTF?

    1. Dave

      You can use Coinstar machines, free of any fees, if you elect to receive your reimbursement in the form of a gift card voucher. They offer them for major retailers (Home Depot, Lowes, Amazon, etc) and chain restaurants. The merchant is the one actually paying Coinstar’s transaction fee. I don’t bother wrapping and bringing coins to a bank any longer.

        1. Dave

          Only if you redeem in cash. It’s high too. But for gift card its free to you, but the merchant pays a fee to them.

        2. ambrit

          When Coinstar came out, there was a placard somewhere on the machine that stated that they took 7% as a commission. I don’t know what it is now.

      1. bob

        I think coinstar makes money via finding older, silver coins, and selling them for the value of the silver. That used to be illegal, then kyle bass and his nickels. One silver quarter is worth about $3, for which they are paying you $0.25(minus 10%). Just a few of those a day, per machine, and they’re already ahead.


        Which is also another way Coinstar could be making money, selling all the nickels for the metal.

        My belief is that they’re more of a metals buyer and seller than they are a coin counting company.

        To give them another 10%, off the top. No way. There’s still a local bank around here that will take coins, count them, and deposit them free of charge.

    2. DJG

      I closed my account at Bank of America in Chicago because they insisted on charging for counting coins. I have an old coffee canister that I allow to fill up and take in occasionally. It was maybe $100 twice a year. This was about eight years ago. I moved my account to Citi, which is probably stupid, but I had never seen the rampant stupidity of BOA:

      Weirdly, when Bank of America took over LaSalle Bank (when the Dutch ABN realized that it was best to flee the U S of A and the impending crash), BOA seems to have hired exclusively extremely nasty blonde women. They let the old staff go. Oddly, Chicago is a city with few blondes, given our ethnic makeup. So I was wondering if BOA was importing them from some charm school in Calif (?).

      1. divadab

        More likely North Carolina – B of A was wrecked when it was taken over by that Charlotte NC outfit and became just another predatory lender. It’s really too bad – B of A has an illustrious history – it was the first bank to re-open after the 1909 SF earthquake and fire – on a bench on the sidewalk. And it was the first bank to extend banking to Chinese-Americans. But these greedy wreckers from NC have done their best to destroy its franchise.

        1. Clifford Johnson

          The B of A fell apart financially before it was sold to the Charlotte outfit, after it was forced to sell its prestige headquarter building in San Francisco. The problem was a disgusting degree of hubris. It had been run by Tom Clausen like the Vatican.

      2. HotFlash

        I believe they are Stepford Clerks ™. Our local drugstore chain uses the brunette version.

    3. Yves Smith Post author

      TD Bank has coin machines. But they are pretty much only in the Northeast. You get a receipt and stand in line to get the money.

      I hope you got a receipt.

  16. equote

    “Give me control over a nation’s currency and I care not who makes its laws.”
    Baron Rothschild

  17. Robert Frances

    PW’s story might have more to do with how some customers might appear be more trouble (or potential trouble) than they’re worth. If PW had used direct deposit (or an AM) for the check deposits, and used an ATM for the cash withdrawals, I think the story might have a different ending. The behavior would smell funny to me too if I saw a customer time and again always dealing with cash, regardless of the amounts. Plus, using a teller for such relatively simple transactions is a real cost to the bank since it makes other people wait longer for a teller, who are best suited for less routine banking transactions.

    I mainly use cash for most of my spending and have never had a problem with my credit union, even when I withdraw large(ish) sums during a month from an ATM (albeit limited to $500 per day). And since they are a relatively small CU (only a few branches) located 500 miles away near where I used to live, they don’t really “know me,” other than my 30-year banking relationship with them. (They don’t make much money from me either since my main savings are elsewhere and I mainly use them for the odd check and ATM withdrawals, using Vanguard to transfer cash to the account when it gets low. I keep the balance above $300 so there’s never a monthly fee either.) But I agree with the observation that “know your customer” is likely having an impact on banking activity for some, especially new(ish) customers.

    1. washunate

      Agreed. I don’t understand people who think banks make money off of small deposits and withdrawals. That is a major expense using a branch like that. That’s what ATMs are for.

      It’s related to the issue of postal banking that has come up sometimes. It just isn’t profitable providing services like cash withdrawals and other minor banking activity unless there are a lot of fees attached or you bring in some other larger business and the retail branch giving you cash in that case is basically just a loss leader.

      1. Ivy

        A rule of thumb in banking over the years has been that 80% of the retail customers make 120% of the profit, and that the other 20% are moneylosing accounts.

        Relying on that type of rule is what got a bank some bad (more) bad press some years ago when they wanted to charge $5 for teller line transactions.

        A credit union in Southern California notified its customers that they were depositing too much cash, as they apparently didn’t have the means to lend that or otherwise earn a return. That may have been another rule of thumb approach. They got a lot of unwanted publicity.

        Sometimes, retail operations (banking or otherwise) need to consider some common sense in their decision making and look at things from a customer perspective in addition to their over-analyzed positions before they come across as all thumbs.

  18. David Mayes

    My wife and I retired to Cape Town, South Africa over 11 years ago. South African banks are operated (and regulated) on very old fashioned rules. They make much of their money from banking fees. The services price list from a typical bank has more than enough pages and fine print to be a menu in a lavish Oriental restaurant. They are also extremely slow processing transactions and charge perhaps 1.5% for a cash deposit!! On the other hand, with one exception, they were virtually unaffected by the global crunch in 2008.

    Before we moved here, I read about a new bank just starting up that did all transactions on-line and had by far the lowest costs of any local bank. I have been with this bank since arriving here and am quite pleased with their service. However, they hate cash because handling it is expensive. They charge about 0.8% for any cash deposit, and they do not dispense cash at all! Normally this does not cause me a problem since virtually all local transactions are electronic (paper checks are long obsolete) , but I do have to pay the fee for my deposits. (This bank is growing very rapidly, and the value of their stock as well.)

    This bank does not do international transactions, so I need to have an account at another bank for the occasional overseas wire. Recently, I needed to withdraw a small amount of money for a wire transfer and I needed it immediately. The bank, of course, couldn’t dispense cash so I needed to get money out of the ATM. The small amount of money I needed exceeded my withdrawal limits and the complications continued when I went to my other bank and stumbled through the difficulty of making a wire transfer given the rules in place to prevent money laundering. The total process in two banks took five hours to wire US$1000 to an individual in France! I sure could have used that time to finish my packing for the trip.

  19. B1whois

    I bank with a credit union in California. Back in 2010 I became quite frightened and withdrew $15,000 and put it into a safe deposit box. I had to make three separate transactions at three different branches because they said they simply didn’t have that much cash. They said I would have had to have made arrangements to withdraw that much. I had to sign papers to do it.
    In 2012 I bought a used car with cash. Once again I made large withdrawals of $17,000. I don’t remember what happened that time, but it must not have been much.
    In February of this year I took $5,000 out of the bank in preparation for my extended stay in Uruguay to determine if it will be my new home. (I have become so dis affected by the United States that I am now intend a “divorce”, as we have grown apart, and no longer have the same values.)
    I had no problem withdrawing the $5,000. When I went on the airplane I took the $5,000, still in the banks envelope, and taped it to my leg. Of course when I went through security imaging machine it showed up. I had to take it from my leg and show it to the TSA agent. Surprisingly they did nothing, they did not even determine the amount just determined that it was a some kind of money. I think I must be very lucky.
    I recently wrote a check for $2,500 to a friend and he seems to be unable to cash it. I check my bank and they show it has cleared, but he is still having trouble getting it out of the bank in Los Angeles. All of these transactions in the last five years have occurred with the same bank.

    1. divadab

      Under $10,000 in cash is non-reportable crossing the border. You weren;t lucky – you weren;t breaking the law.

    2. Jim Haygood

      ‘In February of this year I took $5,000 out of the bank in preparation for my extended stay in Uruguay.’

      A few years ago when FATCA started to bite, most of the many European bank branches in Uruguay would not deal with Americans. Maybe that’s changed with some of the recent FATCA intergovernmental agreements.

      Supposedly (according to expat forums) the state-owned BROU (Banco de la República Oriental del Uruguay) ignored the FATCA nonsense and was happy to serve any foreign resident. After all, it’s their country — why shouldn’t they make the rules? Also BROU deals in Uruguayan gov’t bonds, so one could earn some interest.

      Let us know how it works out.

    3. Yves Smith Post author

      I was chatting with a TSA guy about how the week before a woman had tried bringing a bottle of cognac through security. She was of course told no. She drank the whole thing. I remarked she was lucky to be alive.

      He said, “Oh, we see all sorts of things.” His favorite was when a guy was caught trying to bring $15,000 in cash through security.

      He gave away $100 bills to everyone nearby till he was down to $10,000.

  20. Bubba_Gump

    Experiencing “Know Your Customer” is so annoying. Drives me nuts to get the fake cheery “How’s your day going?” or “How’s your business doing?” from the drive-in teller. They turn over so fast anyway that it’s hardly worth even learning their names. On the personal side, a credit union I’ve been with for over 25 years has been kind of a pain recently with deposit holds. My other personal bank is a small one that we switched to from BofA about ten years ago, having observed the big bank shenanigans and wanting to divest. The small bank is a real bastard to deal with, as the first answer to any customer service question is always “NO.”

  21. Jporter1000

    My credit union chooses to use carrots rather than sticks but the intention is obvious all the same. Below is an excerpt from their most recent correspondence:

    Dear JEFFREY,

    For the monthly qualification cycle beginning 1/29/2016 and ending 2/26/2016, you did not qualify for High-Yield Dividends.

    We look forward to rewarding you in the next cycle should you qualify.

    Below is the summary of the monthly qualification and your actual results.

    Monthly Qualification
    Have at least 12 check card purchase(s) (minimum purchase amount of $5.00) post and settle
    Actual Results
    0 purchases that posted and settled

    Monthly Qualification
    Have at least 1 automatic payment (ACH) or direct deposit or bill pay transaction post and settle Actual Results
    0 transaction(s) that posted and settled

    Monthly Qualification
    Be enrolled and receive eStatement notices
    Actual Results

  22. PatrickW

    The reader in this story probably got red-flagged at account opening because he didn’t take the debit card or checks. That’s really odd from the bank’s perspective. Better to accept those features but just never use them.

    1. Bas

      Yes, if you are a frugal person who does not like to waste resources in the World, prepare to be misunderstood and then persecuted for that heresy.

    2. Gaianne


      But even having them opens a vulnerability. Credit cards are hacked all the time–and it has nothing to do with what you do. (Or need not.)

      In the old days we used to say that cash is risky, because it could be stolen. But nowadays your money in the bank is also stolen, so the risk has shifted in favor of cash.


      1. Yves Smith Post author

        No, no, you are not at risk with credit card, or more accurately, your risk is at most $50. I’ve have my wallet stolen (and over $1500 spent in the 15 minutes it took me to realize what had happened and call my bank) and another case of over $3000 in bogus charges from the Dominican Republic. Never charged a dime.

        With a debit card, they can drain your bank account. I had to insist with my bank to get a PIN-protected ATM card rather than a debit card. And they don’t let me use it as a debit card (as in for purchases, where it is often convenient to get some extra cash at the same time). I can use it only at ATM machines. Annoying, because I had a pin-protected card from the bank that my bank bought that I could use for purchases too.

        1. cg.eye

          That difference in debit card liability has been elided over so successfully that I don’t know whether the smartphone pay systems have the same lack of protection….

    3. charger01

      The CEO of Banner is on the Fed board for Seattle. Banner has had some political connections with larger banks, one of which was WaMu. Banner also (like most banks) accepted TARP funds. I don’t know if it means anything, but they are a fixture in SE Washington banking.

  23. joe bongiovanni

    From the headline I thought this was gonna be about the move to a cashless system.
    Cash, as one writer said, will be moving closer and closer to the only liquidity available, and there ain’t enough of it to go around once the SHTF.
    When the insolvency of the money-finance system grips the banking industry – see Bill Gross recent comments, plus Dr. William White ….. what are you gonna do to buy bread and cheese?
    Get yourself the best roll of cash you can.
    Because its there.
    Soon enough will cost you $105 of bank credit to get $100 cash.
    then, $110 in bank credit.
    Roll On to Cash.
    (Just Kidding, Yves0

  24. gardener1

    Interesting to see how many credit union customers we have here.

    I have asked in several places where there were supposedly knowledgeable people, whether all these variety of national and international banking laws; i.e. reporting requirements, bail-ins, spying, etc., applied to credit unions.

    So far I have never received a precise and cogent answer. Good question, no?

    How do US and international banking agreements apply to US credit unions? Anybody?

  25. Ulysses

    I do all my “banking” in the backrooms of Chinese restaurants, after hours, just to avoid these hassles!

  26. griffen

    As others note, it’s the KYC approach for BSA and AML procedurals. Having suffered thru those test modules, and all the OFAC procedures, well it’s all a bit numbing.

    (fortunately my work roles were not retail. Just corporate analyst work or institutional. But you have to take them and pass).

  27. washunate

    I enjoy the discussion about banking a lot, but this is an area where I am a bit of a contrarian and view things as being sensationalized. Here’s my argument:

    We haven’t lived in a cash-based economy for multiple generations now. Checks and ACH/wire/etc. have been the primary method of payment for decades, and more recently, the rise of plastic has been replacing checks, not cash. The Social Security Administration doesn’t mail cash to beneficiaries. Is that some evil war on cash conspiracy?

    As far as banks themselves, running a store is expensive. If you as the customer are not paying directly for that expense, and you’re not willing to give the bank other forms of revenue (like direct deposits and credit cards and debit cards and loans and so forth), then you should absolutely expect the bank to not like working with you. Any business owner in any industry would not want a customer that demands services without providing revenue. (Firing unprofitable customers is actually one of the most important skills in the long-term sustainability of a commercial enterprise.) And then when you take into account the government’s increasingly authoritarian desire to know everything about you, you get a perfect storm of see something, say something.

    This is why in the age of surveillance, the best privacy, the best way to be left alone, is looking normal. Have a credit card (or three). Absolutely take the debit card from your main bank. And for goodness sakes, use the ATM for cash withdrawals. Or if you insist on the human touch, make fewer, larger withdrawals so you don’t waste people’s time as often. Even your friendly local TBTF bank is happy to give you $1,000 cash from your checking account periodically if you are a long-time customer in an actual business relationship rather than expecting services to be provided below cost.

    1. Bas

      I think safety is at the root of not mailing cash to SS recipients, and the switch to electronically-loaded plastic guards against checks being stolen. That said, there are many stories of families stealing money from the elderly after they offer to “help” them by buying groceries, etc, of course needing the pin. And constantly trying to “look normal” is a way to drive yourself insane, IMO. This Earth needs all the “abnormal” people it can get.

      1. washunate

        Agreed. Cash has a lot of costs, and not just to banks. And of course stealing takes many forms, especially when trust is not accompanied by verification.

        I’m curious about the constantly part. I literally have a debit card that I’ve owned for over a decade and have never used, ever. But it makes the bank feel better knowing they’ve issued it than that you’ve refused to have one. And having spare capacity on your outstanding credit cards is actually better than using them constantly. The FICO scoring in particular does not like it if you keep your credit cards constantly maxed out. It also doesn’t like it if you have no credit utilization history.

        Now of course, we could rail against the whole credit/debt system, but in practice, as long as our existing system lasts, housing and school and cars are so expensive that to rail against credit/debt is tantamount to saying one should not own a house or go to college or have a car. And even renting (at least, renting non-substandard housing) involves lots of demeaning hoops to jump through, increasingly involving credit checks as well.


        1. Bas

          I started arranging my life in 2005, seeing the crash coming, so that I could opt out. All of the things I had done leading up to that facilitated the move. With a few bumps, and in my decision to lead a simple life, I personally have made a plan so that in two to three years, I will not have any more hoops to jump through, barring the disastrous takeover of the U.S. It takes intention, and a determination not to be trapped in your “normal” system. It helps that I don’t give a damn what anyone else thinks, and am not seduced by the good life and baubles, lol.

            1. Bas

              Thanks, most people think I am nuts. I do have a cat.
              The key is not to have any debt and decide to live within your means. That was my initial goal. You do find out who your friends are. In 2005 I picked a place where I would like to spend the rest of my life, in a place that values the environment (Vermont). Then I accepted what that was going to take to have the freedom I wanted. Individual strategies will vary. Cheers!

    2. zapster

      Which amounts to extortion. By eliminating all cash options, we’re forced to provide a private entity with ‘profits’ or be cut out of the national financial system. Monopolies do not get my sympathy.

      1. washunate

        I don’t follow. Yes, if you participate in the financial system, you must participate financially. That seems rather tautological. If you don’t want to participate in the financial system, don’t.

        It sounds like what you are saying is that you want the benefits of not participating in the financial system but you want somebody else to pay the costs.

        1. Bas

          no, I think that zapster wants the option.
          The financial system does not need to devour everything, does it, to survive? I think that would classify it as a fatal disease…

          1. washunate

            Ah, but I would say it does. The monopoly zapster disapproves of is the government itself. It is more efficient for the formal economy to all use the same, government-supplied medium of exchange (variants of the USD/FRN payments systems) rather than having several different types of currency floating around.

            You don’t have to have a bank at all. You don’t have to use checks and FRNs and direct deposit and the whole nine yards at all.

            But don’t expect the gas station in a town you’ve never visited before to trust your promise that, honest, you’ll pay them for the gas. The gas station wants a financial claim, one they can easily convert into wages and utilitily bills and all the other costs of running the store, not a nonfinancial one.

            Now if you can make your own biodiesel outside the formal economy, then by all means, you don’t need financializiation in the first place because you’re not engaging in the formal economy.

              1. washunate

                Cash – in the American context, FRNs – comes from the government, distributed through banks. It is a financial transaction. You will meet the Secret Service, FBI, and/or others rather quickly if you circumvent the government-approved monopoly (namely, obtaining unaltered, legitimate FRNs from the federal reserve system, i.e. banks).

              2. washunate

                P.S. Sorry, perhaps I’m using an acronym that is not familiar. FRN is shorthand for Federal Reserve Note. Those are the physical dollar bills (cash) that are official legal tender in the US.

    3. Lord Koos

      There is something to what you say, however I think if you want to withdraw a largish amount of cash at any point it is impossible to look “normal” to most banks unless they know you well as a customer.

      1. washunate

        Oh agreed. But what is largish? Anyone with enough money to make a large withdrawal is doing better than the typical American household.

    4. helmholtz watson


      I think you are missing the whole point. Of course we could go cashless but this isn’t really about costs, crime, terrorism, convenience, modernity, etc. It’s part of a desperate attempt, which includes NIRP, to keep a teetering monetary system intact and maintain all the illusory wealth that has been created over the last 30 years. This is fundamentally, about control of the monetary system which is on the verge of imploding.

      Where is Michael Hudson to explain this to everyone!

      1. washunate

        Where did I say go cashless? I’m explaining how even our biggest banks will freely give you cash if you’re not a difficult customer in the process. For a small fee, they’ll even give you cash from other countries.

        And if the issue is large amounts of cash, the problem is the government, not the banks. The government stopped making high denomination notes in the 1940s!

        Also, as far as maintaining the wealth, the vast majority of financial wealth is owned by the top 20% of American households. They have other ways outside a checking account to maintain that wealth. I thought we were talking about the majority of Americans with cash needs of maybe a few hundred dollars each month at most.

  28. different clue

    I am in a credit union. I pay bills and big expenses by check. I buy some things from major corporate outlets by credit card to give my credit card some exercise. I buy groceries, books, entertainment, etc. from non-major merchants by cash so as to not force them to pay 1% or whatever of the money I pay right over to a credit card company.
    Also, I buy food for cash even at major chain grocery stores.

    I wonder if the persons cited in this post invited hostile scrutiny by their loud and proud financial dissident behavior. It is better to be cloaked and shielded by a small cloud of credit use and simply do as much of your actual bussiness in cash as you like without overt displays of hostile dissidence. Then too, credit unions may be more reasonable than banks.

  29. dcblogger

    Remember that scene in Dick Tracy where Big Boy Caprice says that everyone should be working for them and that the mob should get a cut of every transaction in the city? That is how I feel about the cashless society, one where every transaction, even the most trivial, would include a bank fee.

  30. cripes

    Yes, we are treated like criminals for routine transactions.

    My employer’s bank, where I rarely cash a check, makes me fill out declarations to cash a single paycheck. This is better than some banks, which charge up to eight dollars for cashing a single check drawn on their customer’s account, more than many check cashing stores would charge.

    Fees and fines and penalties for pre-loaded cards are ubiquitious and rampant. TBTF banks have taken over almost all government benefit programs, food stamps, unemployment, cash benefits, provider payments to home care workers, etc., etc. Not to mention billions in “gift” cards that are really graft cards, which ding you for spending and for not spending, by withdrawing monthly fees, or confiscating the entire amount in as little as 90 days.

    It’s not unusual to have a drawer full of these stupid cards with unspent funds remaining that cannot be accessed via ATM, since they are less than $20, and you couldn’t withdraw $20 if it was, because of the fees. Nor can you spend $3 at the local merchant, who has a minimum policy due to merchant fees, or the “convenience fee” electronically charged is greater than the amount on the card. Confiscation.

    To all those worried about the banks being able to make profits for all these “services” I have a simple principal which is just this: people should be able to receive the full amount of their own money. I also had huge difficulty trying to get my bank to credit the full amount from a state-issued debit card into my account. Actually they couldn’t do it, because it is designed to force you to spend it, at least the part of it you are allowed to spend.
    PS, welfare bashers, this was for work performed, not public aid.

    Just give me the full amount I earned, and let me decide where I want to spend, bank or bury it.
    Is that so god-damned hard?

    1. Pavel

      Excellent post. A friend of mine in NY, who is now quite well off, told me how during his “poor as a churchmouse” period in the city he would have to find an ATM that discharged single dollars, as he didn’t have even $10 or $20 in his account.

      I recall my own PAACM phase, living paycheck to paycheck. I had a cheap sublet in the Lower East Side (back when such things existed) and was working on 34th St. It was pouring down rain but I didn’t have bus fare so had to walk the 40 blocks in the rain. Humiliating!

  31. Medium Rare

    The account activity you described, depositing checks and only withdrawing cash, is a classic red flag for money laundering in any basic anti money laundering training. Especially if the amounts are below $10,000 and occur repeatedly, which creates the appearance that you are structuring your cash withdrawals to avoid the reporting requirement for the bank to file a CTR with FinCEN.

    In fact, it is likely that the bank manager has filed a Supicious Activity Report (SAR) regarding your account activity. They probably compared your account activity to their typical customer profile (including similar types of businesses if you are a business) and said, “this doesn’t look right.”

    Cash is increasingly viewed with suspicion.

    1. Yves Smith Post author

      I don’t get it.

      Why is taking cash OUT “money laundering”?

      The point of money laundering is to get money INTO the banking system or into another asset, like real estate (see marijuana farmers buying real estate discussion above). In each case, the money launderer has cash from presumed illicit or non-taxed activities and doesn’t want it sitting around at risk of being stolen or burned up in a fire.

      I can see other concerns with cash withdrawals, like the person might be a wanting to engage in other sorts of illicit transactions, but not money laundering.

      1. Medium Rare

        It resembles structuring, the breaking down of deposits or withdrawals into smaller sizes so as to evade reporting requirements (for cash transactions over $10,000) and hide the flow of money. It’s considered an indicator of illicit activity such as financial fraud, money laundering, drugs, terrorism, extortion, etc. That’s why the government considers it a “suspicious” activity. So they cast a wide dragnet, requiring financial institutions to file Suspicious Activity Reports, for stuff that looks like structuring. The SARs go into a database and can be queried at a later date on behalf of law enforcement.

        Something about the cash withdrawals probably spooked the bank manager and so he wanted more information. I think he went overboard, but it depends on the amounts of money involved and the pattern of transactions.

          1. Lune

            Because if you launder a thousand dollars, you’re a hardened criminal and must go to jail. If you launder a billion dollars, you’re an upstanding citizen who just had a few bad apples working for you.

            And if you’re HSBC, that’s a whole ‘nother level. You do know what HSBC stands for, right? Hong Kong / Shanghai Banking Corporation. Now why would a good British bank be named that? Because it was founded to launder money for British drug kingpins during the Opium Wars. Drug cartels and money laundering is literally its founding mission. And it stays true to that mission to this very day…

  32. DolleyMadison

    Those who claim electronic transactions are “safer” and ask “what do you have to hide” need to know that the bank claims to “own” your electronic payment history and can delete or alter it at will. When an unscrupulous servicer tried to illegally FC on me a few years back I immediately sent them a letter informing them I never missed a payment and in fact paid online via bill pay on the first of every month, and had records to prove it.. Three days later the bank, unaffiliated with the servicer (on paper anyway) DELETED my online billpay record – but only for that payee interestingly enough. They claimed that they owned my online records and as such were entitled to delete for any reason, and did not have to tell me what the reason was. When I became visibly shaken and demanded an explanation, they had security escort me out of the bank. So BEWARE. (I had luckily already obtained screenshots and a certified copy of my online bill pay from an unsuspecting bank teller as well as certified copies of my monthly statements prior to sending the letter to the servicer.) And yes I beat them, with prejudice, and beat back their appeal, (which featured a bank friendly judge and 7 lawyers from 2 law firms) as a pro se. Wrecked my life but still have a roof over my head (and CASH in my pocket whenever possible).

    1. bob

      Never ‘opt out’ of mailed paper bank statements, and keep them.

      Huge protections attached, and you’re not relying on the bank to keep you records (receipts, in a lot of cases, the only one you can get these days).

  33. shinola

    Place: Kansas City Federal Reserve Bank
    Time: 1979

    During new employee orientation, we were given the spiel about the functions of the Fed. It was mentioned that one of the long range goals of the Fed. was the elimination of cash by 2020.
    Reasons given: Eliminate the expense of handling physical cash & reducing/eliminating “float” (i.e. the amount of untrackable money flowing through the system – billion$ daily).

    Eliminating float would allow the Fed. to better track the economy and, as “side benefit”, help curtail criminal activity.

    Made it sound like a reasonable goal at the time…

    1. TiPs

      That’s what i was going to post: seems the end goal is driven by efficiency and reducing illegal activity. That may be naive to think so…

      1. Ivy

        Elimination of cash will reduce various types of illegal activity, such as bank robberies.
        It will also result in crime increases impacting any number of monetizable assets such as jewelry, cars, portable electronics, etc.
        All those robbers and thieves won’t just apply for government-funded retraining programs overnight.

        1. Jess

          If they eliminate cash, how will the thieves convert the goods they steal into something of transactional value? No cash means no pawn shops, no private sales to people out of the trunk of your car in an alley.

          1. Nathan Tankus

            I suspect that some banks would innovate to support this crowd. say a negotiable certificate of deposit where ownership is anonymous. in general any bank account where you can transfer ownership of it anonymously can do the job. in exchange for the anonymity banks get to charge a lower interest rate which would make it a cheap way to fund assets.

    2. perpetualWAR

      Sorry, they want to track you, just like with the se f*cked up “smart” phones.

  34. reslez

    Another benefit to cash is that your purchase history doesn’t get sold off to advertisers and marketing companies. Buy the wrong things from Target and they target you for certain promotions. What will health insurers etc. do when they see people loading up on junk food and soda at the store? Will your employer be interested that you’re not complying with their “wellness” program and recommended diet?

    1. Rhondda

      A good friend told me he had been “dinged” by his employer — threatened with termination — for smoking cigarettes. He’s a “social smoker” — he smokes when he drinks cocktails…but he never smokes at work or around work time, for example at lunch. He tried to brush it off but the Bossman (healthcare biz) said don’t bother trying to lie — the company’d bought “graphs” on their customer base (patients) and had decided to bundle their employees into that data purchase. So they had a graph on him and saw that he’d purchased cigarettes regularly. I told him to wise up. Pay cash for your purchases and then you won’t have to justify them to Big Brother. He was fired anyway.

      1. Nathan Tankus

        This is one of those examples where I’m unsure whether the problem is the corporate and state security nexus or the problem is the lack of labor rights and other protections. They could collect reams of data on your friend’s “sin” purchases , if they needed a “just cause” to fire him it wouldn’t matter.

  35. Bob Z

    I think the biggest problem PW ran into was the immediate suspicion generated by his refusing to let the bank give him checks or issue a debit card to him. The bank would probably have been fine if he’d pretended to be a regular customer, gotten those things, and then destroyed them privately. But refusing them outright? Red flags all over the place.

    If you’re going to make that kind of a protest statement, you have to accept that you are more or less immediately going to be labelled “more trouble than you’re worth”. They probably made the decision to close his account the same day he opened it – the delay was just to get the paperwork done. I doubt that this is primarily about a war on cash, although that’s undeniably part of it.

    If you are truly trying to fly under the radar, you go along with their control schemes, but try to subvert them quietly. Being “loud and proud” about it just paints a target on your back.

    1. perpetualWAR

      Why can’t you state your intentions? I guess you are okay with speech really not being free.

      1. washunate

        No, it’s about being realistic with how the world actually operates. Protest is inherently different from blending in, staying low, whatever. To confuse the two does a disservice to both.

  36. Benedict@Large

    These accounts seem more like tracking money (perhaps by the Fed), as opposed to the bank trying to charge fees on money movements. It’s my suspicion that eventually these banks will want a piece of the action whenever we ordinary citizens make ordinary movements of money, essentially coming between us and to ordinary issuance of money by the federal government to do so. This would make the banks a sort of proxy issuer of money, a position from which they could conduct all sorts of mischief.

  37. homeroid

    As a cabinetmaker/custom woodworker. I often do “cash” jobs. A local company i work with at times cannot pay me for months so when they can will write a check for 5-10K there about. I then would have to go to our local Wells Fargo branch and ask simply to cash it. There is nothing simple about it. The bank manager gets called over to explain to me that i need to open an account. I explain that no i need to just cash this here check of yours or should i be talking to my lawyer. 15 minutes later i would get my cash. After about 5 episodes of this i will never accept a Wells check ever again. I have lost a few sales of my furniture because of this. I will take a credit union check. Those folks aint so pissy.

    1. bob

      I had the same sort of thing happen at chase. Took a job, didn’t get my first paycheck for 4-6 weeks. Finally did and walked it down to the bank it was drawn on- Chase. Cash please.

      Do you have ID? Yup, here’s my passport. That’s not ID, and you have to open an account.

      BS. It’s a DEMAND draw on your bank. I’m demanding it. NOW. In cash.

      I did get the manager of the branch and after he got the general idea that I wasn’t walking away without my money, they reluctantly agreed to cash the check.

      I had another local bank demand that I put a thumb print on the check I was trying to cash. No way in hell. I ended up leaving that bank entirely, without any cash. I did call the OCC and FDIC and the state AG- They can’t put such a policy into place. They still do require it, dunno how. It’s not legal.

      1. washunate

        They want ID specifically and are concerned in general because that’s one of the most common ways check fraud is committed. Make a check that looks like it’s from a company and then cash it.

        In other words, the issue isn’t the cash part of the transaction. It’s the check part.

        1. bob

          The check was their check. A payroll check from NYS, drawn from chase, with chase written all over it.

          If they can’t determine if the check is good, who can? Certainly not the person receiving the check (me).

          The ID was a completely different matter. The teller demanded a drivers license. I had just renewed mine, didn’t have anything beyond the voided (hole punched in it) old picture license and a piece of paper from the DMV. No picture license had arrived yet.

          So, I brought my passport. Passports are MILES above State drivers licenses as far as security goes, and it shouldn’t have been an issue. But, instead, they tried to use it as a reason to decline the check cashing.

          The manager knew all of this, and knew he had to concede.

          1. bob

            Yes, I understand that if you bring a check from another bank into a bank and ask for it to be cashed, there will be some trouble.

            This check was issued by CHASE.

            In theory, the bank issuing the check is the only one who can determine if it is a real check.

            That’s also before the payroll angle. Very hard to forge those, they keep very tight control on them, they are much closer to “cashiers checks” than personal checks.

            1. washunate

              I don’t mean to defend the specific actions here. Rather, I’m trying to help see things from the perspective of the teller. They’re told to ask for a DL or a fingerprint because there’s a nonzero chance a check isn’t good when someone comes in presenting it who does not have a relationship with the bank. I could sympathize with someone being anxious about a stranger not wanting to produce a state issued ID. Yes a passport is more superior than that, but it’s also less commonly encountered. That in itself stands out.

              I’m not sure what value exactly comes from it being a payroll check. That’s one of the types of checks used in various schemes. It’s such a common problem, especially in the age of consumer color laser jet printers and computers, that companies have had to start paying for extra services with banks to only authorize specific batches of individual check numbers to clear the account.

            2. washunate

              P.S., it’s also one of the factors driving employer embrace of direct deposit and pay cards. Employees no longer receive physical checks that way so they don’t have as easy access to the general corporate design, routing number, etc.

  38. Knute Rife

    Problem is, I trust the Postal Circus about as much as I trust a 12-year-old pimp at the entrance to a dark alley in Juarez.

  39. Jared

    For the first time in many years, banks are making me seriously nervous. All this talk of a “cashless” society, coupled with criminal banking and the push to eliminate high-denomination currency, made me decide to withdraw some cash as a cushion, just in case. I went to my local bank (a branch of a non-U.S. bank) and withdrew $35K, mostly in fifties, leaving maybe $10K in the account. The teller was absolutely nervous but the manager was nice, not inquisitive, and merely asked for my occupation to put on whatever document it was they had to file.

    1. washunate

      FYI, you may be intrigued to know that high denomination notes were eliminated in the 1940s. And the $10k reporting is also a government decree, not a bank one.

  40. perpetualWAR

    Because of this post, many people in the construction business (Banner Bank used to do many construction loans) have told me about Rory O’Flattery who was a bigshot at Banner. Apparently back in 2001, he embezzled $11.5 million. So, it appears I did not do my homework thoroughly relating to criminal behavior at Banner. Or, is every financial institution rife with fraud? <—rhetorical

  41. greg

    Just like to make this clear to everybody: The ‘cashless society’ idea does not originate with the government. The government is just the tool. And right now the tool is controlled and wielded by the neo-con plutocracy, who see the total control of money as just another instrument of plunder.

    No populist government would have the least interest in doing away with cash.

    Our masters think like pirates, not builders. When society is stripped of its capital, when the plutocracy can no longer sustain their thievery because they have too much, too much property and too much power, and there is simply not enough left to steal and still make a profit, the whole house of cards will come down. Prepare.

  42. dk

    Thinking about cash usage, bank’s war upon, one should look into unbanking, and collaterally underbanking. People who do not have bank accounts uses cash (and barter). Those who keep low balances and use few services (credit cards, loans, transfers, etc) at the one or two accounts they do have, also tend to make more cash transactions, and use check-cashers, payday loans, pawnshops, etc.

    Banks may drive out cash-preferring customers, but in doing so they contribute to the unbanked population. People living in regions of low un/under-banking can generally expect even more blow-back from their banks and institutions than those living where bank usage is lower. I currently live in Albuquerque, New Mexico:

    “A third of our population unbanked and underbanked negatively impacts consumer spending, is a clear sign of alienation and indicates the extent of our underground economy,” said David Seely, president and CEO of Kirtland Federal Credit Union.

    I pay cash for property rents, and for transactions with local businesses and individuals; credit cards elsewhere. My dentist offers a 10% discount for cash. I have gotten substantial discounts on medical treatments and services by offering full payment, in cash, up front (go to the office manager or billing department, invariably in the basement of any hospital). With the discounts, this is considerably cheaper than paying for health insurance and copays (I have been uninsured my whole life).

    Here is a google image search for “unbanked us by state”
    Image searches are especially useful if you’re looking for charts, but try removing the term “chart” for variety.

    Here’s one for Yves, and other NYC denizens:
    The change between 2011 and 2013 may represent flight by poor/underpaid, as much as anything else.
    Note that the grayed areas, which are parks and airports, should be tallied as 50%+ unbanked for their relatively small but necessarily transient/homeless populations.

    The war on cash can also be viewed as another mechanism of disenfranchisement for the un/underemployed, homeless/transient, heavily indebted, criminalized, etc, although this is probably not a primary intention of banking and transaction processing industries. And speaking of transaction processing (also, form processing), that industry is a big piece of the insurance and “healthcare” puzzle.

    BTW, some of the cash-elimination “creative” thinking at banks and trans. processors concerns bitcoin and blockchain transactions. One downside of the blockchain is that a virtual currency can permanently lose ALL VALUE, with near zero hope of recovery, once the financial integrity of the blockchain has been catastrophically compromised (as when a preponderance of transactions default or are found to be unsecured in the financial sense). A physical currency can more easily retain some nominal value through continued circulation at the base (cash) level, and has a better (if uncertain) chance of at least fractional recovery.

    Examinations of cash economy often discuss illegal (“black”) and covert (“dark”) markets. It should be kept in mind that illegal markets can save a population in times of disaster, e.g. the fall of the Soviet Union in 1989-1990, where illegal markets, using dollars, continued to trade in food and essentials during the ruble’s collapse. Russian authorities eventually devalued the ruble to drive out local dollar currency, with mixed success.

    Physical currencies may be an annoying cost sink for banks in an era of narrowed margins and non-productive rent-seeking (and grift), but the durability of currencies suggests that in the long term, economies would be wise to limit use of electronic transaction channels, for purely practical reasons.

    I happened to be in NYC for the 2003 blackout. Suddenly, ATM’s didn’t work, and stores and particularly transportation providers could not process electronic payments; it was cash or nothing, and hardly anyone had cash. I gave out almost $500 that evening, to help people get buses at the Port Authority. It was not my first NYC blackout (1977, 1965), but in those events many stores remained open for business and transportation was not significantly impaired, because everyone carried cash as their primary method of payment.

  43. arthuraa

    Assuming the U.S. and other major countries introduce all-digital currencies and ban cash, any thoughts on what popular barter products might develop? At least one blog has suggested razor blades and laundry detergent (things of high demand with frequent turnover).

  44. DeAnna

    A couple of months ago, I changed cable companies through CenturyLink. I pay CenturyLink and they paid DirecTV. I had to call DirecTV to cancel and they determined that I was owed a refund of $34. DirecTV sent me a pre-loaded Citi card that had fees attached and I had to cancel it to avoid a $15 fee at the end of a year. I had the option of opting out and they sent me a check. CenturyLink then credited my account $34 and DirecTV sends me a bill for $34. I signed the back of the check and mailed it with the bill.

    I still can’t figure out the point of this 2 months of ridiculousness.

    I have also been on the board of my credit union. They watch for all transactions of $3000 in any 30 day period. So, if you withdrew $100 a day for 30 days you would pop up on their list.

  45. crittermom

    My problem is of a much smaller caliber, yet still a definite sign of the times, I suppose.

    The only bank where I currently live in NM is 50 miles away. Next closest is 75, in the next state, AZ.

    So I still bank where I had for 20 yrs in CO, the state where my home was that Chase foreclosed on.
    It’s a smaller bank found only in several rural areas of the state.

    Where I live is not where I want to be, but it’s all I can currently afford on my meager SS so I have my SS check directly deposited, mail any other little deposits, & use my debit card or cash for transactions,
    (I’m hoping not to be here forever!)

    I’ve tried to add to my income by doing some craft shows, but for those you need bills for change & ATM’s only give 20’s.
    I went into the “local” bank (50 miles away) & requested change for one $20 bill. (No coin. Just bills)
    They refused since I don’t have an account there.

    I sold a few of my creations to a local store by that bank & had the store owner pay me some in cash & some by check (only $45 total) since that bank would have charged me over $5 to cash her check.
    I had another week to go before my SS came in & I needed gas so I didn’t have time to mail off a check for deposit.
    Luckily, I’d suspected that bank may charge to cash it which is why I’d requested some in cash from the buyer. Whew!

    A friend told me he was charged at another bank for cashing a check drawn on that bank.
    Again, it wasn’t one of the big banks, either.

    When did this all start?
    I had not thought they could legally charge for cashing legal tender drawn against their own bank.
    Whoa! (Of course, I never thought a bank could illegally take my home of 20 yrs, either)

    Forgive me, but I’ve lived rural most of my life so always dealt with smaller hometown banks, I guess.
    (Those were the days. When I opened a savings account as a kid they gave me a fuzzy cocker spaniel bank as a gift, & were all smiles & nice. Anyone remember when they used to give away toasters & such?)

    If I can’t get change for a $20 bill at a bank, where then? (The bank I tried at sent me to the tiny local gas station, which didn’t please that owner any).
    I don’t go to that town often enough to warrant opening an account there & if I mail deposits, they’ll be routed north to a major city first, before coming back south to that town, so will take as long as it takes mailing to my old bank in CO where they already know me & haven’t screwed me.

    I do understand the point some of you make about the banks needing to make money for their customer service–to some degree, but we’re talkin’ a small bank in a very small town that rarely has a car in their tiny parking lot, despite being the “only game around” for many miles. They’re not busy.
    Yet I must open an account to exchange a $20 bill for two $5 bills & ten $1’s?

    My folks were already married by the time the Great Depression hit & witnessed banks closing with no access to your own money, so he’d always advised me to bury some gold in the back yard. He said it would always buy you a loaf of bread.

    Now I understand only too well what he meant.
    (He was a successful inventor, & always was ahead of his time)
    Too bad I no longer own a backyard.

    My choice has never been clearer regarding an election.
    The banks–even small ones now–have gone too far. Enough is enough.

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