Thursday, October 17, 2013

Really Troublesome JPMorgan Chase Letter

October 16, 2013 ZeroHedge has a photocopy of a letter that JPMorgan Chase is apparently sending to its business customers:
For whatever reason, JPM has decided that after November 17, 2013, it will halt the use of international wire transfers (saying it would "cancel any international wire transfers, including recurring ones"), but more importantly, limits the cash activity in associated business accounts to only $50,000 per statement cycle. "Cash activity is the combined total of cash deposits made at branches, night drops and ATMs and cash withdrawals made at branches and ATMs."
Why? "These changes will help us more effectively manage the risks involved with these types of transactions."So... JPM is now engaged in the risk-management of ATM withdrawals?
Reading between the lines, this sounds perilously close to capital controls to us.
The comments are fascinating.  Some people think that this is related to money laundering -- but there are already gobs of rules that apply at much lower levels of cash transactions, and those come from the federal government, not a particular bank.

Some think that there is concern about large scale export of money from the U.S. in response to an upcoming default.  (Odd: two days after I next expect to get interest from some Treasury bonds.  Probably coincidence.)

Some think that the government may be preparing to start confiscating wealth, as happened in Cyprus.

I am gratified to see that guns are now readily available, and almost reasonably priced again in local gun stores.  While I was waiting for tires in Wal-Mart, I wandered over to the gun counter.  They had a DPMS AR-15 in 7.62 NATO for about $750 or so.  Ammo is still scarce and expensive.

I do hope that the idiots in charge of our government are not stupid enough to think that they can just start confiscating personal or corporate bank accounts to solve the unwillingness of Congress and President Obama to say no to the rich greedheads who want more money from us.  If so, they have not learned what Machiavelli wrote in The Prince (1513):
Whenever you have to kill someone, make sure that you have a suitable excuse and an obvious reason; but, above all else, keep your hands off other people's property; for men are quicker to forget the death of their father than the loss of their inheritance.

8 comments:

Aaron said...

I can verify the letter is real, as I just got one in the mail today as I have a Chase business account.

I can also note the letter correctly stated the changes won't affect the way I bank as I'm absolutely nowhere close to either depositing $50k in cash a month (I wish), nor am I doing international transfers from the account.

They still do international wires, just not direct form the operating accounts.

JohnG said...

One thing has always puzzled me about the threatened confiscation of wealth claims: How would the government get past The Takings Clause in the Bill of Rights? It states: "nor shall private property be taken for public use, without just compensation."

That is, for every taking there must be payment of an amount that fairly compensates for the loss of whatever to the government.

If the government takes $100k of my wealth doesn't it have to pay me $100k?

Douglas2 said...

I've some experience with international wire transfers, but only from living abroad and having relatives abroad.

Let me mention that every bank account that I have had the USA has different rules and procedures. Some will neither send or receive wires, some will receive only, some will send for nominal cost but it is exorbitant to receive, and some vice versa. I can see no rhyme or reason to the differences, often between two levels of account in the same bank.

I really have a hard time believing that this is anything other than one bank changing its own policies for its own purposes.

Clayton Cramer said...

JohnG: They don't confiscate it. They just tax it very heavily. That's legal.

JohnG said...

Clayton - A confiscatory tax would be seriously frowned upon. Remember, Chief Justice John Marshall said the power to tax is the power to destroy.

However, if Obama succeeded in packing the Court in a way that FDR could not, then you might have cause to worry. Given the squishy resolve of elected Republicans, nothing would be safe.

Anonymous said...

Could this possibly have anything to do with the institution reaching a record settlement of $13 billion with the feds?

Joseph said...

"Start confiscating"? Don't you mean "resume confiscating"? We must keep FDR's gold heist in mind.

Anthony said...

$50,000/month? Aaron's business may not make that much, and some much larger ones may take in almost no cash, but there are plenty of businesses which take in $2000/day in cash.