Banks are awful, we all know it. But it's important to be able to describe to your friends and family why banks need to be replaced. Below are the top 10 problems with banks that Satoshi solved with a 9-page white paper.
1. Banks are corrupt
Since 2011, central banks Deutsche Bank, JPMorgan Chase, Bank of America, and Bank of New York Mellon have reported $2 trillion in Suspicious Activity Reports (SARs) to FinCEN, and Deutsche Bank cleared $1.3 trillion all by themselves, including $10 billion for drug cartels. In 2016, Wells Fargo settled a $3 billion lawsuit with the Securities and Exchange Commission (SEC) for allowing its employees to create millions of checking and savings accounts in the names of clients without their permission.
2. Banks are usually closed
Banks are closed 76% of the year, not including holidays. Chances are, your bank is closed or closing right now. Real estate is one of the most competitive markets in the world and a $10 trillion cash cow for banks. Banks are closed Friday to Monday morning intentionally, so they can sit on escrow funds longer. Banks are usually (and intentionally) closed.
3. Banks are inconvenient
Banks are extremely inconvenient for blue-collar workers, and that's part of the business model. Banks earn profits from interest, and that's why they have sticky fingers and cumbersome policies. Anyone with a nine-to-five schedule will have a hard time accessing capital with most banks. Most banks require customers to take time off work just to walk or drive to a bank and transact business.
4. Banks have low limits
Most banks won't let you send or withdraw $2,000 per day or $10,000 per month without talking to a private banker. Some banks have limits of $500 per week to access your own money, even if sending to a family member. And best of luck scheduling an appointment, banks are usually closed.
5. Banks love hidden fees
You may not realize it, but your bank is charging you hidden fees. You probably pay overdraft fees, ATM fees, wire transfer fees, and other monthly service fees at least a few times per year. These fees really add up, and most of these services don't cost the bank money. JP Morgan Chase offers no ATM fees, no wire fees, no overdraft fees, higher transfer limits, and better rewards to Chase Private Clients, but not to everyone else.
6. Banks slow down money
Chase has also been accused of intentionally freezing assets using "OFAC Hold" and other descriptions, only to upsell the client on Private Client accounts to make the freezes and compliance reviews disappear. Apple settled a class-action lawsuit in 2020 for $500 million in the US over claims that it deliberately wrote software to slow down older iPhones. Banks love freezing assets to convince you to buy upgrades, this is a tried and true strategy deployed by the best.
7. Banks fund dirty money
In September 2020, leaked documents from the U.S. Financial Crimes Enforcement Network (FinCEN) led to a lengthy BuzzFeed report that concluded that FinCen had failed to identify or stop thousands of illicit transactions and money laundering by the world's top banks for nearly a decade. This leak showed the widespread nature of illicit money flows in banks that are far more egregious than Silk Road. Many of these transfers were linked to large terrorist groups and organized crime families. "Dirty money pours into the world's most powerful banks," said the viral BuzzFeed article, "and the government lets it flourish."
8. Banks are unethical
At the height of the COVID-19 pandemic, Bloomberg acquired an internal memo that revealed that 125 employees at Wells Fargo have been fired for defrauding the Economic Injury Disaster Loan program put on by the U.S. Small Business Administration (SBA). Bankers stole $2 million in financial assistance to small businesses negatively impacted by COVID-19 and redistributed the funds to their own bank accounts by opening and approving new businesses. Wells Fargo has settled over 25 lawsuits totaling $45 billion related to fraud and corruption charges dating back to the 2008-2009 financial crisis.
9. Banks are inequitable
"Redlining" describes a practice by some mortgage lenders when they refuse to lend money or extend credit to borrowers in certain areas of town or for other discriminatory reasons. Any bank that took bailout money in the 2008-2009 financial crash should be boycotted, protested, and bankrupted. Even if this happened, the government would bail out the popular ones and let others fail—solely based on the decisions by Congress. Bitcoin "billionaire" Isaiah Jackson is one of many who believe that Bitcoin can help fix economic injustice. “For the first time in history, we have a Plan B option to the current financial system which has seen years of redlining, racial discrimination and other egregious acts by retail banks to the Black community,” said Jackson, author of Bitcoin & Black America.
10. Banks are centralized
Bitcoin should be far more threatening to banks than Uber was to the global taxi cab industry because of its decentralization. Bitcoin is open, digital, precisely scarce, its blockchain is immutable to government, and it removes all central third-parties from transactions. Like the Internet, Bitcoin has no CEO or central governing body. Banks have been growing steadily with inflation since 1791 and, until Bitcoin came along, seemed firmly in control of the future.
Bitcoin isn't perfect, but it's far more perfect than banks.