This is one of the periodic times where people have a lot of preferences for how financial services work and those preferences are difficult to satisfy for all people simultaneously at all times.
I think that banks have been feckless in how they've operated on Zelle vis their Reg E obligations, which include the bank (brief but directionally accurate version) taking liability for fraudulent use of basically any form of electronic payment.
They wanted to offer real-time payments, because they were watching Venmo and Cash App and Paypal and etc etc etc eat their collective lunch with that as a differentiating product feature, and so Zelle was born.
But everyone knew real-time payments greatly increase fraud risk.
"And so they either accepted that risk which is their duty under the law to accept or they decided not to do real-time payments."
No, how about we just do the other thing, where we #%*((%#ing ignore that law.
As a professional financial commentator, the vast majority of the time when people say "Ahh banks piss me off so much", I think it is because of poor understanding of incentives.
This, this decision, it pisses me off.
Now saying "Look if you want nice things there is a price for nice things, and that price here is renegotiating another nice thing which you want from us" seems like fair play to me! If I owned a community bank, I would also want to make this argument.
And if I were a bank, community or otherwise, I would follow the #*(%(#% law in advance of my advocacy to change it.
One of the fundamental tensions in society's desire for financial services, btw:
"We think Regular People should basically not pay for Basic Financial Services."
"Everyone is Regular People."
"Basic Financial Services include, um, all of them that are things I understand."
"Banks *must not discriminate* in offering Basic Financial Services; they're to be offered on a public utility basis."
"Because Regular People are not good at finance and banks are, banks should take all risk for Basic Financial Services."
"Asking Regular People about their use of Basic Financial Services is per se scuzzy behavior. Why would you have to know, you #*%(#%(ing bankers. Don't Regular People have a right to privacy anymore?!?"
There are solutions to these complex preferences of society (and different actors in society) which exist in tension with each other.
And those solutions are...mostly attached to every product you can buy from a bank today.
"Do you think a good-faith case can be made for the types of fraud which hit Zelle being out-of-scope for Reg E protection?
I do not believe one can make a good-faith case for this. Your argument would have to start from "It would be *extremely inconvenient* if..."
(Normally I'd put the "Not a lawyer and I don't interpret laws as part of my job" disclaimer here but this was *fundamentally a policy decision* and *the policy was utterly unambiguous* and *the entire banking industry largely followed it until Zelle.*)
Like if you actually read the text of Reg E it says in the legal equivalent of giant letters carved into a hillside To Be Absolutely #*%(#%( Clear This Applies To Everything In God's Creation.
The very thin reed the banks have been saying with regards to Zelle fraud is "Oh you authorized those fraudulent transactions", in the face of decades of our understanding about what "authorized" was supposed to mean.
"Did I 'authorize' a transaction with a skimming device attached to an ATM in Italy when I tried to swipe my card to get out dollars?"
"LOL no we're not stupid that was clearly fraudulent."
"How about if grandma defrauded over Zelle?"
"You mean she AUTHORIZED TRANSACTIONS."
There are many, many different mechanisms to convince someone to Zelle in a way that transfers value from them to a fraudster, similar to there being many mechanisms to extract value from a credit card.
That's why Reg E was intentionally written *very broadly.*
You could make a fun song about it:
Did he punch you in your face and steal your card doesn't matter that's Reg E.
Did she call from the bank except it was a lie doesn't matter that's Reg E.
Did he copy your magstripe onto blank plastic doesn't mattre that's Reg E.
Did your computer catch a virus doesn't matter that's Reg E.
Did your computer with a privileged session join a botnet doesn't matter that's Reg E.
Did cosmic rays corrupt a database doesn't matter that's Reg E.
Did an inattentive banker make a typo doesn't matter that's Reg E.
OK it's only a fun song if you enjoy banking regulation but it is extremely important that someone in society enjoy banking regulation.
(I mean, except the explicitly enumerated exceptions. Wire transfers: not beloved in the eyes of God, c.f. also carved in very large letters on the mountain.)
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Another entry for the book of “Things said by crypto CEOs which you could not coerce out of bank CEOs by any methods known to man: ‘We don’t have that type of dollar anymore but still have dollars.’”
Note that this implies that Binance’s treasury department (hah, I know) doesn’t think it can just go to Uniswap or similar and get an arbitrary number of USDC for their stablecoin sufficient to cover withdrawals for *a few hours.*
I would note that bank CEOs of systemically important institutions in the US will also never under any circumstances say “We are seeing a higher interest in yen from our customers than we can actually satisfy but we are sure the banking issues with our partners will improve soon”
It is a good thing for candidates to understand the shape of the world and a good thing for companies to tell candidates the truth about the shape of the world.
“Not what I meant.”
I know, second thoughts, I know.
Note that I think the relevant bar for better results from cold contacting a hiring manager is not “Put weeks of work into bespoke software development” and is instead “Made one thing interesting that 80%+ of candidates didn’t have.”
A fun thing I learned today about the culture that is hoteling: it is the custom of operators of fine hotels to fly the flag of foreign nations in addition to their own national flag when a large, official delegation is staying at them from another country.
TIL.
How I learned:
“Excuse me. I happen to live in Japan and noticed your hotel [in San Francisco] is flying the Japanese flag. Do you happen to know why?”
(I said the first part of the sentence to avoid unintentionally giving offense. In principal, subject to a detail about the Flag Code that probably only literal Boy Scouts recall at a moment’s notice, I’m entirely OK with private establishments flying multiple flags.)
So if you enjoyed Dyson Sphere Program specifically for seeing a utopian Chinese sci-fi take on human progress in a video game but really wanted a dystopian one instead, Ixion is your game.
It’s good, on its own terms. Light city builder, more about balancing resource constraints while carefully preventing the unenlightened populace from deposing your enlightened rule which is absolutely not CCP In Space.
I thought I had a reasonably good handle on the mechanics but the sheer number of things to do at once resulted in anxiety-inducing amounts of juggling in the early to mid-game.
If that is your thing, they execute fairly well on it.
This happens to a lesser degree in almost any pair of countries, too.
Multiple people really, really wanted me to be a conduit for JPY to USD during the early months of the Mt. Gox implosion, when they were sending out JPY domestically but no foreign wires.
“Hey my crypto exchange is having banking issues.”
“Is the issue ‘they don’t have all the money?’”
“No Japanese banks can’t do international wires.”
“That is obviously false.”
“Look it doesn’t matter. I could get JPY delivered domestically. I only want USD. Could you wire it?”
“No I could not.”
“I would pay you for this.”
“I understand that, but you have to know this is money laundering.”
“No it’s just…”
“You need a socially established person in Japan to represent to the banking system that they are doing routine money movement.”
“Exactly!”
Last year, a group of geeks convened on Discord in response to a Twitter thread about California’s woes with the vaccine rollout. They very quickly found themselves running a critical piece of national public health infrastructure.
VaccinateCA was the work of many, many people. They deserve all the credit for what we accomplished. I was the CEO.
The writeup is unavoidably personal, and includes e.g. my diagnosis of how the US found itself so flatfooted last year. I am speaking only for myself in it.
Twitter holds a very special place in my heart as an undersung vehicle for mobilizing the Internet for the good of humanity. I was musing on that when I drafted the below tweet, but did not expect where it would end up.