Thank you @brewster. It looks like the struggle for fair access to credit will continue.
The articles did not mention pending litigation or if there was a legislative advocacy or other community-based campaign. It was unclear which specific administrative rules contributed most to the problem.
It was also tough to understand how bitcoin was programmatically excluded from the project after regulators protested.
Unfortunately good intentions arenât good enough, more often than not governments trying to do good just results in more bad things happening.
Itâs fortunate that good intentions always provide positive results in private endeavors. And that one can see the benevolence of private industry on this very same page with Skhreliâs business model.
âAs part of the New Deal, President Franklin D. Roosevelt signed the Federal Credit Union Act into law in 1934. The law allowed the chartering of federal credit unions in all states. The federal law sought to make credit available and promote thrift through a national system of nonprofit, cooperative credit.â
Yes - government- in making the success of credit unions possible in all states - and in insuring the deposits of savers from fraud and just plain incompetence for several generations now - has caused irreparable harm because one firm wants to use the system in a manner that is different from what it was designed for - and would have great potential to undermine the financial system that enabled generations of family homes, savings and retirements.
How dare those bastards!
Except Bitcoin isnât really anonymous since every transaction is in the blockchain. You can follow the money from account to account.
It seems to me every CU I have ever used, which is a few, had a specific mission: to serve a certain area, or employees of one company or union. âMexicans and the internetâ is less specific, and may have fostered the illusion this credit union was a scam waiting to happen. This is completely unfair, since banks do not scam people.
I wasnât criticising credit unions, just making a general point in response to the post I was replying to.
Way back in 1970 or so, I was involved in setting up the Isla Vista Credit Union after the Bank of America in town was burned down during a âriot.â It took us over a year to get our approval as we seemed to have been the first credit union based around a geographic location rather than the employees of a business or members of an organization. Might be interesting to look back on the history of that situation to see if it has any relevance to the Internet Archiveâs credit union.
The quotation marks around âriotâ make me curious. Is there an interesting story there?
That credit union sounds similar to a Building Society.
The credit union I belong to now seems to have transitioned over several decades from being employment based to geographical based. Originally it was the Oahu Educational Employees Credit Union when I joined, though it was open to pretty much any business to let their employees become members at that point. At some point they renamed to HawaiiUSA to reflect being generally for anybody who lives here.
Still way better than a bank.
Jebus.
Iâm not asking you to do more work, but a story on the howâs and whyâs would be extremely interesting (to me, at least).
I worked for a very large, very well funded financial institution and even they were (superficially, time consuming, ineffectively) scrutinized. I enjoy war stories 
Maybe the submission criteria arenât written by the bastard offspring of the John Birch Society and Lyndon Larouche.
A better way forward might be to devise new kinds of financial institutions which are more secure from exploitation by design, and so rely less upon external regulation.
For those who require simple secure storage, at the cost of convenience, how about a bio-bank? Cash deposits and withdrawals are done in person, linked only to an on-site scan of the customerâs DNA, with no other records about the customer kept. If you are the same person who deposited the money, you can withdraw it. This sounds both simpler and more secure that what is on offer now.
You do realize you have to get the external regulators to agree to allow you to form such institutions or youâll be doing so outside of the law and any financial protections (like insurance) and possibly be arrested for fraud, right?
And thatâs what the various anonymous crypto-currencies could facilitate.
Bitcoin is only a single step in that direction.
With banks being tempted with negative interest rates, the talks about banning cash and the attempts to restrict it, the increasing privacy-invasiveness of electronic payments and the persistence of the records, and the growing number of government restrictions over goods and services, we are guaranteed to see some interesting developments there.
Thatâs why I specified ânew kinds of financial institutionsâ - if there were already regulations for them, they wouldnât be new.
As for fraud, that would mean that I was cheating people out of their money, or otherwise going against the terms they would have agreed to.
No, it would mean someone accused you of it and then the government took you to court to send you to prisonâŚ
Iâm sure youâd be given a verdict of innocent and all of your money given back though! right?
I am not clear what you are going on about here. So hypothetical charges of fraud are a way to put me in prison? This does not sound like how fraud nor trials usually work. Accusations typically involve claims of damages with evidence of some kind.
Are you suggesting that a bank that is a black box and keeps no records other then the DNA of the depositor is defrauding them somehow? The purpose is to provide a useful service to people which is not otherwise available. People who donât like it or need it need not use it.
Iâm saying you canât just go out and freely make a new financial institution unless you do it within the current regulatory structure. Otherwise, youâll probably get arrested for running a financial scam. The laws on banking and such are not simply an inconvenience you can ignore if you start receiving money from other people.
If the government takes you to trial for fraud, theyâll bankrupt you, even if you win.
There is a reason that people donât play âLet a thousand flowers bloomâ with new kinds of financial institutions.
Yeah, starting in the US with the great depression a number of very enthusiastically enforced regulations regarding financial instruments were created. And if you thought fleecing depositors or investors is bad now⌠Well, I can find somewhere a graph of the booms and busts that preceded 1940ish.
Edit
Using inflation and deflation as proxies for economic stability, notice how shit changed since banking reform pre and post WWII?
