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Feds Rule PayPal Is Not A Bank
dthable writes "CNet has posted an article update describing the Feds latest ruling - PayPal is not considered a bank. The article describes the effects of not being a bank which includes the lack of government regulations."
Does "not a bank" mean "not insured by FDIC"?
"'As long as we continue doing what we are doing today, we won't be subject to Federal banking laws,' said PayPal Chief Executive Peter Thiel."
These guys really need to back down and start telling people how they will fix the numerous complaints about their service instead of acting so arrogant, IMHO.
My $0.02 will always be worth more than your â0.02, so
Ah, so the FDIC doesn't want to have to insure them. I wouldn't, either!
I've seen the complaints on /. and all the other sites out there. Where does this notion come from that they ever WERE a bank? I use Paypal to send and receive credit card payments. As soon as the money hits my account, I take it out. Why would I expect Paypal to FDIC insure it? Or to give me interest? or any of these other services?
That being said, I think Paypal has some shady stuff going on so I will discontinue the use of their service.
There is no reasonable defense against an idiot with an agenda
:wq
Because until the internet, there was no way you could build paypal. (Well maybe over the phone, but that would be much more difficult) Because the internet allows paypal to have virtual presence wherever there is net access, and has no physical presence. You cannot goto the paypal headquarters and deposit your money into your paypal account. The laws are just not setup to deal with this kind of business yet. A bank without a physical point of presence is not covered by any of todays laws (correctly). It'll probably be awhile before the lawyers figure out what Paypal and services like it really are.
Paypal has no one to blame but themselves for the current investigation.
It wasn't until PayPalSucks and PayPal Warning became well-known and the horror stories became more abundant that Paypal found itself in the sights.
I alternate between posting +5 and -1 Comments. Karma: +53 -47 = 6
I say give us more non-bank banks. If I could find an unregulated money-holder for me, I'd use it immediately IF they had good third party insurers, better interest, and less government big brother intrusion into my transactions.
... use the cash-n-carry, fully trust-based money changers of the middle east. No regulations, no snooping, and the only requirement is trust ...
u ble-in-price-in-just-three-months recessions we experience from time to time, but a real you-are-likely-to-starve-along-with-the-rest-of-us and armed-revolution-really-might-happen depression like our grandparents used to go on about for hours on end to anyone who would listen.
... which isn't the same as no regulation and no accountability at all, which is what you get with pay-pal.)
Do what Osama does
Personally, I'm not fond of banking, or of banks, or of excessive regulation (and sometimes corrupt regulation that facilitates, for example, the "legitimate" seizure of an accounts assets for simply remaining idle for a few years), but what you propose is a recipe for another 1929 followed by a decade or more of depression. Not the soft-market, oh-no-I-can't-by-a-new-BMW-and-my-condo-didn't-do
Thaks, but with as annoying as I find regulated banks, I'll take that "disease" any day over your proposed "cure."
(Having said all that, I would like to see regulations eased and brought into line with those that a credit union has to obey
The Future of Human Evolution: Autonomy
Just because you're not earning interest on your money in PayPal doesn't mean they aren't.
Banks loan money and that's where they primarily make their money. PayPal's business model isn't at all like a banks and it is reasonable that they're not treated like a bank.
Read these for more info on why the Federal Reserve caused the Great Depression. Eye-opening...
First
Second
And that distinguishes him from the rest of slashdot how?
I think this hurts paypal. the Feds basicly said "Paypal is not a bank, because they do not have a bank charter." States can now say to paypal "You are not a bank, quit acting like a bank."
In other words, they are either a bank or not. If they are a bank, then they can handle money for other people. If they are not a bank, then they cannot.
Now bank regulations vary from state to state. There are banks in the US that I cannot legally get a loan with, because they are not licensed in my state. (It gets complex in ways I don't know when I want a loan from something that isn't in my state)
So what are they.. a wrapper for a bank? They don't hold any cash per se. But they hold money, sorta.. and allow you to withdraw.. sorta..
Lord knows.
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ping -f 255.255.255.255 # if only
I say give us more non-bank banks. If I could find an unregulated money-holder for me, I'd use it immediately IF they had good third party insurers, better interest, and less government big brother intrusion into my transactions.
Hey, I don't mean to undercut your frothing-at-the-mouth anti-regulatory libertarian fervor, but Credit Union deposits are insured by the government.
Don't let facts get in the way of your rant, tho. Moderators, a 5 rating for that post is silly.
Didn't they say the same thing about credit cards years ago? Now how many people are using credit cards? In the same analogy, CC company is telling the merchants, I promise to pay you later if you give my client the merchandise now. What recourse do you have that the CC company will pay? In the same way with PayPal, if a company decides to reneg on its promises, it constitutes fraud. A company like paypal or Mastercard or Visa is not going to get up and walk away with your money without some type of legal ramifications chasing after them.
_______________________________
"I'm not Conceited...I'm just a realist..."
So, Paypal has the same opportunity to make profits with your money the way banks do, by investing it. This and their poor customer service says to me they're a bank.
(Amazing that in this age when all banking systems are interconnected that your transfers and deposits can still take up to a week... that's something the banks didn't want written out of the system during the last revision of banking laws.)
Big Daddy, Johnny, Burp, Aunt Zelda, Scott, Slurp, Big Momma
If you want paypal's phone number (posted on here, but no-one seemed to care) its 888-221-1161 - and yes if you push enough buttons you will contact someone.