US Financial Watchdog: Money Stored in Venmo/PayPal/CashApp Isn't Federally Ins...
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US Financial Watchdog: Money Stored in Venmo/PayPal/CashApp Isn't Federally Insured
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The Associated Press reports:
Customers of Venmo, PayPal and CashApp should not store their money with those apps for the long term because the funds might not be safe during a crisis, the [U.S.] Consumer Financial Protection Bureau warned Thursday...
The Federal Deposit Insurance Corporation insures bank accounts up to $250,000. But money stored in Venmo or CashApp or Apple Cash is not being held in a traditional bank account. So, if there is an event similar to a bank run with those payment apps, those funds may not be protected. Some of the funds may be eligible for pass-through insurance coverage if customers do certain activities with the apps, the CFPB said, but generally by default the apps are not covered by deposit insurance.
For example, if a customer opened a PayPal Savings account, it would have deposit insurance through PayPal's partner bank, Synchrony Bank. But the general PayPal account is not covered by insurance. For Apple Cash, which can be insured through Green Dot Bank, it requires a user to verify their identity to get deposit insurance. "We find that stored funds can be at risk of loss in the event of financial distress or failure of the entity operating the nonbank payment platform, and often are not placed in an account at a bank or credit union and lack individual deposit insurance coverage," the CFPB said in its report.
"Consumers may not fully appreciate when, or under what conditions, they would be protected by deposit insurance," the agency added in its report.
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until when they collapse and go crying to the Uncle Joe.
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And then Uncle Joe will make the banks pay for it like he did the last time.
Taxpayers didn't spend a dime bailing out those Banks. We did spend hundreds of billions bailing out Banks under Bush Jr. Obama got a good chunk of the money back though when he threatened to regulate them if they didn't pay back the loans.
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The pickle jar of singles buried in my backyard is also not FDIC insured. Things that aren't banks or credit unions don't have all the features of a bank or credit union.
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Well, the thing is if many people are going to be burned by the collapse... politicians might bail them out (not with their own money of course). It's a matter of how many votes they would lose. I think they might be "insured" by the fact that they're too big to fail.
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Customers of Venmo, PayPal and CashApp should not store their money with those apps for the long term because the funds might not be safe during a crisis, the [U.S.] Consumer Financial Protection Bureau warned Thursday.
These apps have been doing direct payment processing for years, so why is the Consumer Financial Protection Bureau warning us now? The timing of this, as well as the specificity of mentioning "a crisis", seriously makes me think the US Government expects another financial collapse is imminen
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Several banks failed recently. And the government inappropriately protected larger deposits.
Money in paypal is more difficult for them to seize tho.
Probably best to have some in paypal, some in banks, some in a pickle jar, some in a retirement account, some in bonds.
So kinda depends.
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Yes, and I am sure the same will happen depending upon *who* loses their deposits in this case. Over and over again the Gov proves who really matters, the ultra rich. What happened in 2008 is a glaring example. No one was brought to justice. And the working class and espically the poor bared the brunt of the damage, while the rich was getting richer.
The woman from thernos(?) was brought to justice as she should have been. But I have to wonder what would have happened if she was part of the "0.1%".
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Are using it. In particular gen Z has hit the workforce having grown up using these things day to day without realizing that they don't have the protections of a real Bank. That was fine when gen Z was in high school and maybe college. But now they have actual jobs and financial responsibilities. That's all that's going on.
And CEOs are always dumping stock. So relax. Republican party was trying to cause a recession with the dead ceiling negotiations and they failed spectacularly. So we've got at least a -
Several high-profile crypto scams imploded within the past year. With them came cries for the customers to be bailed out. CFPB probably wants to run a public service announcement highlighting the distinction between internet money-holders and an FDIC-insured bank account. Given the organized effort that has been made to blur that distinction, and encourage people to move all their money out of banks, it's kind of their job to warn about the dangers.
It's not just crypto scammers either, there are tons of peo
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Maybe in response to more people using such services as primary banking? Ie, younger people confusing these services with banks.
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I don't know about the other two companies, but I've heard and read several times that with PayPal your money isn't safe even in the short term.
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> I've heard and read several times that with PayPal your money isn't safe
The money is very very safe and PayPal will hold it. Even if you have a claim to it. It's not YOUR money since you gave it to them.
PayPal's money is very safe.If you'd like o "invest" don't buy "crypto" or "NFTs."
If you'd like to "save" get a savings account.
If you'd like to "quickly transfer money" and hopes it gets from point A to point Z don't use third parties known for holding your money under the flimsiest excuses. Google
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Yeah at one point they were playing with the idea of "fining" users engaging in the spread of "misinformation."
Which in English means stealing from people whose politics they didn't like. I hadn't used them in over a decade, but I deleted my account after that.
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I've had no choice but to use PayPal a few times over the years because my seller wouldn't take anything else but I only used it via my CC. Never hooked up my bank nor kept any money there.
They can steal my $0.00 balance if they like and good luck tapping my CC. The one they have doesn't even exist anymore.
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What about my money stored in Magic: The Gathering cardboard and CS:GO pixel art?!
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If it's not an FDIC insured bank, then why would one expect it would be Federally insured? ðYðYââ(TM)ï
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Always a generational problem. In my day it was people being joyful at "buy now, pay later" then dismay later at their stuff being repossessed. It was a high school graduation requirement for me to have a civics class, and that included teaching about money and credit and the like. Maybe they don't teach this anymore.
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Dollars aren't legal tender. Buzzkills.
But RightwingNutjobCoins running through RightwingNutjobX in the Caymans is still legit, right?
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RWNJCoin is super legit. Everyone who doesn't get in now on the ground floor is gunna miss out when these things take off!
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I have occasionally used Venmo and CashApp for paying friends and family members for small things. And infrequently some big things too. It is very convenient. Big banks have tried to compete with Zelle. But Zelle stinks. It is cumbersome to use. Lots of extra steps. And the user adoption isn't there, so people just ask to be not paid by Zelle.
Zelle does help you solve the lack of FDIC insurance problem. However, it introduces another. Big banks have reporting requirements. Venmo doesn't. Not for
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The reporting requirement is 10K, not 4K. So either you're lying, or you made a smart ass answer and pissed the teller off.
And if you think that PayPal etc wouldn't tell the feds everything they wanted to know, you're kidding yourself. They're even more likely to, as they don't have privacy protections written into law.
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> The reporting requirement is 10K, not 4K.
The reporting requirement is not just 10K transactions. *Any* suspicious activity is required to be reported. For example, try making a whole lot of $9.5K transactions without doing anything illegal. That activity by itself will trigger an alert and you'll get a visit from the Feds.
> So either you're lying, or you made a smart ass answer and pissed the teller off.
Please google Suspicious Activity Reports (SAR) to enlighten yourself. In my case, I was run
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Maybe it's time for the US banks to catch up with the rest of the worlds banking? Then such apps would not be needed.
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With Apple Cash, Iâ(TM)d expect apple to pay. And if apple cannot pay, at that point any federal insurance isnâ(TM)t going to have any money to pay either.
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