[thephyber]

This regulator statement is getting echoed in Reuters, AP News, WaPo, Yahoo Finance, CNN, CNet, Fox Business, CNBC, CBS News, Money, Business Insider, etc.

This is exactly how popular law changes are announced as well. Do you argue that citizens/people should not be bothered to know the law?

For better or worse, US regulation's first line of defense against harm/scams is public information campaigning. It's not clear that the CFPB has any authority to regulate PayPal, Venmo, CashApp, etc for their current business practices. The specific alert described in the article is about helping consumers know the legal / financial differences between these convenient apps and regulated banks.

[zzzeek]

> Do you argue that citizens/people should not be bothered to know the law?

we're talking about global multinational corporations like Paypal, not individual citizens, who absolutely don't and should not be expected to know banking laws and regulations so would not know that "by the way, Paypal is not FDIC guaranteed and your money can go poof at any time". it's irresponsible to let a vastly profitable enterprise like Paypal take advantage of vulnerable people in this way (holding onto their money without all the inconvenience of making sure their holdings are insured). turning the discussion onto "what should be expected of individual citizens" is an attempt to change the subject.

[AnthonyMouse]

Banks are required to be FDIC insured because we want a place to exist where risk-averse people can store their money. So then they can go to a bank, put it in a CD and have an assurance that if the bank goes bust, they don't lose their savings.

The drawback of this system is that it's expensive. If you want to open a bank account, they're going to have some requirements, like having your paycheck direct deposited into it, or minimum deposit requirements etc. Or they'll charge you a fee. Somehow they have to make back that cost.

PayPal isn't a savings account. Its primary purpose is transferring money to other people. In normal use there should never be so much in the account that it should need to be insured. And not paying the regulatory overhead to be a bank is how they avoid the requirements banks impose to have an account.

There is no reason we can't have both. If you're risk-averse and you want an insured institution to hold your savings, you go to a bank. If you want to open an account just to transfer money, you go to a non-bank payment processor.

But now you're proposing to prohibit the latter thing and make everyone pay more for something even when they don't need it, instead of letting people choose when they do.

It's things like this that keep accumulating which cause the cost of living to go up faster than wages.

[thephyber]

I am but a lowly individual citizen and I knew that PayPal is a terrible company, is not a regulated bank, offers a sketchy product, has been known to freeze/close accounts for opaque reasons, somehow be able to freeze the deposits of the bank account attached to the PayPal account. PayPalSucks.com has been running since last millennium with lots of this info.

It is not a bank. People should know it is not a bank. Hence, banking regulators have no authority over it.

You are saying should, but you haven’t shown under what legal authority the regulator can. You seem to be. Making a philosophical argument.

[exeldapp]

I would argue that, yes, it is okay to expect your average person not to understand the law. Of course, it would be great if everyone understood everything (laws, in this case) but that's not feasible.

The FDIC being in place means the average consumer does not have to understand nor think about the economics of a bank, for example, that by depositing money into a bank you are a creditor to that bank.

[thephyber]

But your FDIC example is perfect. FDIC effectively regulates its member banks. But the end user still needs to know if the app/product they are using is protected by FDIC, which is the point of the CFPB announcement in the article. PayPal, Venmo, CashApp are not banks, are not regulated like banks, and are not member of FDIC (or NCUA).

So far I haven’t seen anyone in this HN thread bring up a valid action a US regulator could legally take that is stronger than this statement.

[sumedh]

> Do you argue that citizens/people should not be bothered to know the law?

Police Officers dont have to know the law yet we expect people to know the law.

[artificialLimbs]

It is a symptom of a sick society when there are too many laws. Could a person even feasibly read the corpus of federal, state, and local laws in their lifetime at this point? What percentage would understand it if they could?

Fortunately many judges consider intent and circumstances in their rulings, but not always and that's certainly not where we should place our bets.

[anonymouskimmer]

Most laws and regulations don't apply to everyone, they only apply to particular people and agencies. You really only need to know the ones that pertain to you. And while this is still a long list, behaving in a considerate manner works to avoid breaking many of them. For those with peculiar circumstances (such as owning a business or renting or selling property) there are specialists who can let you know in real time what your obligations are.

[AnthonyMouse]

That is really not much consolation, because you have to know what the law is before you can discern whether it applies to you. You may think there is nothing relevant to you in admiralty law, but then you go and take a cruise, or order some merchandise transported on a container ship, and how do you even know if anything applies when you don't know what it says?

Even if we assume that people not in the oil business don't need to know laws about oil wells and people not in the gaming industry don't need to know laws about casinos, there are still more laws that apply to everyday activity than the average person could feasibly understand. Good luck to anyone in avoiding the tax code.

[anonymouskimmer]

This is why police officers often give a lot of warnings.

[AnthonyMouse]

That would be fine if you were actually entitled to the warning.

Well, sometimes it would be. Spending thousands of dollars in preparation to do something you had no idea was illegal isn't going to get your money back even if it doesn't get you arrested.

But a warning isn't mandatory. Which turns "3 felonies a day" into the erasure of the rule of law, because then if you do something they don't like that isn't illegal, they can still throw you in jail just by sniffing around until they find something you're doing that is.

[thephyber]

I generally agree that it’s generally a terrible expectation for everyone to know the law and how it is interpreted. The book “3 Felonies a Day” covers this. But it is the law we live under and the law created by the people we elect. Don’t like it? Vote with intention.

Police officers are taught the Cliff Notes of the law during police academy, in order to earn an LEO license, and by attorneys that work with the police department. As much as I would like individual officers to known more about the law, let’s not pretend like they know as little as the average citizen about the law.