[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.