Not defending the Musk here, but literally it’s not your money anymore as soon as you put it in a bank account.
The money you put in your account belongs to the bank, and the account functions as an I.O.U… A very privileged one compared to other debts, and in most cases redeemable without notice, but you’re in fact just another creditor.
It’s certainly how banks work where I live, and presuming we are talking about the US here, I did a quick skim through the first few results on google and there mostly seems to be agreement that it is a debtor/creditor relationship.
How would you describe the legal arrangements of a bank account then?
Well I’m interested now. It certainly is the case where I live, and presuming we are talking about the US here, I did a quick skim through the first few results on google and they seem to agree that it’s a debtor/creditor relationship.
How else would you describe the legal arrangements of a bank account then?
The transaction is “I give the bank money, and they have to give it back later”. How can we arrange that legally without transferring ownership? I only know these ways:
Bailment: That would mean the bank keeps the physical bills (or other valuables) in a proverbial or literal safe with my name on it, to return the exact same items later. Of course banks offer that service, but that’s not what we’re talking about.
Trust: The bank takes my money and invests it on my behalf. It does not go on the bank’s books, and they cannot use my money for their own purposes (e.g. as security for loans, to fulfil capital requirements, invest it themselves and keep the proceeds, etc.). This is obviously not the case.
Agency: The bank takes my money and executes transactions on my behalf, according to my orders. Again, obviously not the case.
Am I missing something? Is there some special law for bank accounts? I’m genuinely interested.
Think about it this way, if I’m going after your money, do I sue you, or do I sue the bank?
It’s funny you mentioned bailment, the bank is absolutely required to keep enough cash on hand in order to satisfy what the FDIC deems to be a reasonable amount of coverage for their deposit accounts. (search “demand deposit account”)
If I owe you money, and somebody else owes me money, yea of course you would sue me, not that other person. But I could write over some of the debt I’m owed to you to clear my debt to you.
And isn’t exactly how debt enforcement works? You win in court and the court tells the bank (or forces me to tell the bank) to take x amount out of my account and put it into your account. The debt I was owed gets transferred to you, which clears my debt to you.
You got downvoted to hell, but you’re absolutely right. The fact that FDIC exists should be evidence enough to anyone with a functional brain that depositors in a bank are creditors and do not retain ownership of their literal deposit.
I wonder what other arrangement it could even possibly constitute.
Bailment? That would mean physically locking the bills that you deposit in a safe that you rent, which is possible I guess, but not what we’re talking about here.
Trust? This would mean the deposit does not go on the bank’s books, and they cannot use it for their own purposes. This is clearly not the case, at the very least since investment banks and savings banks were merged.
Agency? That would mean the bank uses your money to enact transactions on your behalf, again, clearly not the case.
That leaves the only other form of “I give you money and you give it back later”, name debt.
Not defending the Musk here, but literally it’s not your money anymore as soon as you put it in a bank account.
The money you put in your account belongs to the bank, and the account functions as an I.O.U… A very privileged one compared to other debts, and in most cases redeemable without notice, but you’re in fact just another creditor.
That’s not how banks work.
It’s certainly how banks work where I live, and presuming we are talking about the US here, I did a quick skim through the first few results on google and there mostly seems to be agreement that it is a debtor/creditor relationship.
How would you describe the legal arrangements of a bank account then?
Former banker here. You’re just fucking wrong about that. You’ve said zero true things.
Well I’m interested now. It certainly is the case where I live, and presuming we are talking about the US here, I did a quick skim through the first few results on google and they seem to agree that it’s a debtor/creditor relationship.
How else would you describe the legal arrangements of a bank account then?
You own the money in your account, simple as that for individual accounts.
The transaction is “I give the bank money, and they have to give it back later”. How can we arrange that legally without transferring ownership? I only know these ways:
Bailment: That would mean the bank keeps the physical bills (or other valuables) in a proverbial or literal safe with my name on it, to return the exact same items later. Of course banks offer that service, but that’s not what we’re talking about.
Trust: The bank takes my money and invests it on my behalf. It does not go on the bank’s books, and they cannot use my money for their own purposes (e.g. as security for loans, to fulfil capital requirements, invest it themselves and keep the proceeds, etc.). This is obviously not the case.
Agency: The bank takes my money and executes transactions on my behalf, according to my orders. Again, obviously not the case.
Am I missing something? Is there some special law for bank accounts? I’m genuinely interested.
Think about it this way, if I’m going after your money, do I sue you, or do I sue the bank?
It’s funny you mentioned bailment, the bank is absolutely required to keep enough cash on hand in order to satisfy what the FDIC deems to be a reasonable amount of coverage for their deposit accounts. (search “demand deposit account”)
If I owe you money, and somebody else owes me money, yea of course you would sue me, not that other person. But I could write over some of the debt I’m owed to you to clear my debt to you.
And isn’t exactly how debt enforcement works? You win in court and the court tells the bank (or forces me to tell the bank) to take x amount out of my account and put it into your account. The debt I was owed gets transferred to you, which clears my debt to you.
If by “money” you mean the physical dollar bills you put in the ATM, then yes.
That absolutely not how shit works.
You got downvoted to hell, but you’re absolutely right. The fact that FDIC exists should be evidence enough to anyone with a functional brain that depositors in a bank are creditors and do not retain ownership of their literal deposit.
I wonder what other arrangement it could even possibly constitute.
Bailment? That would mean physically locking the bills that you deposit in a safe that you rent, which is possible I guess, but not what we’re talking about here. Trust? This would mean the deposit does not go on the bank’s books, and they cannot use it for their own purposes. This is clearly not the case, at the very least since investment banks and savings banks were merged. Agency? That would mean the bank uses your money to enact transactions on your behalf, again, clearly not the case.
That leaves the only other form of “I give you money and you give it back later”, name debt.