Laughing at US Banks

aka too big to do anything useful.

So, most mornings lately, during breakfast, Chase Bank has been running these commercials on TV. Yep, they are selling their bank on the basis of being able to make easy check deposits. Most US Banks and Credit Unions provide some form of ATM check deposit, similar to this…

no-checks-400x506[1]So while most western countries are running from checks as fast as they can, some have even announced the end of checks/cheques as we know them, the US is not only persisting with the check model and clearance process, they are making ATM’s better at accepting checks and spending money to promote it.

Meanwhile, I can login to my UK Bank, and for free, transfer money to my Son in Berlin in a different country, and different currency and it is in his account in about an hour. To send money to people in the UK, it’s even quicker, less than 15-minutes on average. I’ve had the account for nearly 15-years and not had a checkbook for the last 12-years.

The easiest, simplest and by far thecheapest way for a person in the USA to send me money is to write a physical check, take a picture of the check on their cellphone, and email me the picture. I remote deposit it in either of my USA Bank Accounts. Way to go USA.

American Tax Avoidance and Panama

Remember though, as Bloomberg News said back in January, before the “Panama Papers” were known: The World’s Favorite New Tax Haven Is the United States.

Kudos to MSNBC for writing up the story of the (lack of) Americans discovered in the “Panama papers”.

The Wall Street Journal earlier pointed out that 617 intermediary companies that were listed in the papers that operate here in the USA, but no details will be available until sometime in May. So far the only American directly implicated is Marianna Olszewski a financial “pundit” from NY.

article-doc-9n7p3-3x3xJf8qEp7439795a58657c8166-790_636x382[1]As I remarked in my original post about the Panama Paper release, this is no reason for Americans to feel smug. The MSNBC spells out the reasons for that, importantly because for the most part:

  • Delaware, Nevada, along with the U.S. Virgin Islands, are known in particular for loose regulations and low taxes. You can park your money in America behind a dubious corporate facade, without going “offshore”. America rates third behind Switzerland and Hong Kong as a popular tax haven, and far higher than Panama, at 13th. When you here about those massive corporations with billions overseas, it’s not actually sitting in banks in 3rd world countries, it’s often in “tax avoidance” holding companies, who have their cash here in the USA. It’s all bookkeeping entries a rather than overseas.
  • US Tax rates are already super-low, contrary to what you hear from Presidential candidates. Super-rich Americans have less need to seek tax havens because they have less to lose.

Many small and large American and foreign companies help wealthy clients set up offshore shell corporations — that itself is not illegal, as long as the those they set them up for are not trying to hide criminal proceeds or dodge tax obligation.

Remember though, as Bloomberg News said back in January, before the “Panama Papers” were known: The World’s Favorite New Tax Haven Is the United States. Remember, for each dollar a corporation or wealthy individual doesn’t pay, it has to get made up somewhere. That either means someone else pays it, or services get cut.

Fran Hendys offshore blog has good coverage of tax related issues, it’s her specialist subject, where as I just angry more people can’t see what is going on.

Panama Papers, don’t be smug

_89082388_cfoiqttwsaadnoj[1]I woke up early yesterday, after a few minutes decided to read my phone, and there was the blow-up over the “Panama papers”. I read the BBC’s excellent “live” page which in twitter-timeline style was posting news and highlights as they uncovered details.

And then I went back to sleep. There wasn’t anything really new here, it just confirmed what many people already knew, third world dictators, power junkies and desperate wanna-live-forever celebrities were cheating on a massive scale.

Later in the day many of my politically minded friends posted links, articles and critiques on facebook and twitter. Ultimately the leak is a big deal as it takes away on of the key value propositions of this type of activity, secrecy. Without secrecy, the sorts of deals, services and tax avoidance is sort-of-meaningless.

What most ordinary people have overlooked, or turned a blind eye to is that they more than likely benefit from similar schemes. If you’ve used the services of, or bought stuff from IKEA, Pepsi, Starbucks, Microsoft, been to Walt Disney theme park, then you too have benefited or contributed to tax avoidance. Indeed, almost everyone orders from Amazon, and in many cases, doesn’t pay tax that they would have paid had they bought the self same product from a local store.If you bank with Barclays, Citigroup, Deutsche Bank, HSBC, JP Morgan, then yep, same thing.

“The World’s Favorite New Tax Haven Is the United States.” Why? Because even American law firms dedicated to protecting the financial assets of the world’s elite say the US is a perfectly effective tax haven”

What make the Panama papers different, is it gives the tax authorities around the world the chance to go after individuals. Thats much easier and much more interesting than going after these big tax avoiding companies. As always, it’s divide and conquer.

Not doubt entirely coincidentally, when I collected my mail yesterday, I got a full FACTA request/disclosure from my bank, FirstDirect, a subsidiary of HSBC. So, they can make it very difficult for me to maintain a bank account back in the UK, and will directly report to the US Inland Revenue Service, I on the other hand can do nothing about their deliberate tax avoidance, that the UK and US Tax authorities know all about.IMG_20160405_073140

It’s all greek < How the US owns the Greek crisis

It’s worth remembering that while people criticize Greece and their socialist aka “communist” government for overspending and debt, while they’ve not been in great shape since the late 1990’s, all the US Media coverage conveniently omits the fact that is was the illegal activities of the too-big to fail US Banks, and the fraudulent bundling of worthless US mortgages… that caused the 2008 crisis that took Greece down.

The NPR reporting of this is woefully inadequate, the LA Times at least mentions it.

Two small deposits

I’ve often commented on my absolute disdain for the US Banking system. I’ve been poking around with what I can do to remove some of the barrier to the time delay and inefficiency in the system.

I used my online banking system to add the bank details of a friend. I did it by adding it as an “external account”, providing the ABA routing number and the account number. It informed me that two small deposits would be made into the account, and once I had the details to come back and confirm.

I emailed my friend and said I’d done it and why, and asked to be notified when they arrived and what they were. Once notified, I confirmed with my online bank and immediately did an online funds transfer of $100, it arrived overnight. Next day, I initiated a transfer from my friends account of $50, again, it arrived overnight. I then did another transfer of $50, no problem.

So, while there is no way for me to do any formal set-up or account management, without a single signature, and as far as we can see, no way for my friend to stop me crediting, or more importantly debiting from their account. I’m hopeful that a call to the bank could stop it, surely?

For the record, we bank at completely different banks. Yep, the US Banking system truly sucks, 3rd world at best of function and performance. Out of this world on profits though…

Banking like it’s 1985

Every time I deal with my UK bank, I’m reminded how utterly useless, inefficient, and expensive the US Banking system is. I just paid my UK credit card from my UK bank and got this response

The payment has been accepted by the beneficiary’s bank who advise that it will be credited by the next working day.

Yes, I paid it on Saturday from FirstDirect, a subsiduary of HSBC. The payment was sent direct to MBNA Limited(UK) bank, who accepted it and will credit it to my account on Monday.

Old%20Bank[1]I then went and paid my US CapitalOne credit card from my US bank, Austin Texas based Amplify FCU.  The payment process will not be started until banking hours Monday(8am Central), and not received until Wednesday, and if I’m lucky, credited on Thursday…

Yes, I know if I was lucky enough to have a banking account with the same Bank as my credit card company banks with, the payment would be within 24-hours, but that’s just coincidence, not design.

In other news, I set up one of those funky external account transfers this week to a friends account. You know one of those where they make two small deposits, and if you have access to the account, you confirm the amounts to your banking system. After that, you have credit and debit authority on your friends account. Keep banking weird.

A U.S. federal law of 1996 required the federal government to make electronic payments such as direct deposit available by 1999. Shame the rest of the US, ACH backed banking system has caught up yet.

Check’s in the mail

Another frustrating, and wasted effort trying to deal with my FCU over online/electronic payments. I tried to set up an online payment to pay my Attorneys. They gave me all their banks details and double checked they could receive online payments. I went online entered my Attorneys details, it asked for the account number but not the ABA Routing number.

I asked online via chat and then in person while at a branch doing a wire transfer today, both reps from the bank confirmed that when I made a payment, the payment would generate a check; the check could be mailed either to the bank, or to the attorneys office depending on what address I used.

I got back on chat, to keep a record, and ask the agent, Shannon about Bill Payer. She insisted it was a dept of the bank rather than a 3rd party service, gave me a number to contact them along with a 5466 extension. I repeatedly asked for the name of the person who owned the relationship with Bill Payer, she insisted it was a dept and I call them. I called, the extension I was given wasn’t valid. I called the FCU, spoke to Cindy. Asked the same question, she said that extension was internal use only; said it was a 3rd party provider and gave me a 1-888 number to call.

I called, it turns out at least after a long validation that it is indeed a dept. of the bank, or at least that’s what the woman who answered said. She was unable to actually help with a list, frankly either because of my accent, or for some other reason, she kept saying OK sir when I asked questions. Finally I specifically asked if she was an FCU employee, she said she was. When I asked what service the FCU used for their Bill Payer service, she didn’t seem to understand the question, and said I see, OK Sir. I asked again, saying is it checkfree or similar because the FCU wasn’t listed on their website.

So, a wasted effort. It seems the only way I can pay a bill from one bank on Congress Ave in Austin, to another bank on Congress Ave in Austin, is either to write the check myself, or go online, put all the payee details into the FCU bill payer service, which then prints a check overnight; sends it the next day, that the post office gets that night; it gets delivered the next day(if you are lucky); the receiving bank then scans in the check and OCR’s it; and sends via the ACH for 7-day clearing… it’s like the 1990’s didn’t happen…

I really want to be wrong about this and have written to the FCU Vice President – Information Technology and Software Development. I’m afraid otherwise I need to go back to one of the big banks, which be a real shame.