Elizabeth Davies wonders exactly when and why it became so difficult to access your own savings

Elizabeth Davies wonders exactly when and why it became so difficult to access your own savings

By Elizabeth Davies

I don’t often step foot in banks. I tend to do everything online; my account is actually set up to charge me extra when I visit a teller to make a transaction. This suits me perfectly as my banking needs are pretty basic. A recent event however saw my partner and I making a visit to Westpac on Saturday.

Last week my partner's ute was stolen.

It was parked in a well-lit car park, right across the street from the busy bar where we were enjoying a good, old-fashioned, quiz night.

As we sat and watched the CCTV footage we realised we must have been just exiting the bar as the car drove out of the car park. It was a brazen theft.

My partner was fully covered by insurance, and luckily financial crisis was averted. He managed to find himself a good deal on a new ute and when the insurance money came into his account we headed to the bank to take out the cash.

Here is where our Westpac nightmare began.

At our local branch we were happily informed that they don’t actually dispense cash. We couldn’t help but crack half smiles, and once again read the sign ‘bank’ above the door.

The teller informed us that said branch is actually a hybrid bank. He didn’t feel the need to elaborate further and we left mildly frustrated wondering what exactly it could be a hybrid of, if it didn’t offer one of the most basic services expected of a bank.

Persevering, we headed down to the Newmarket branch.

My partner was informed that due to new money laundering laws he would be required to fill out a form in order to be granted access to his funds. Begrudgingly he did so. He was then asked where the money came from. Mike is a patient man but I could see that his cool, calm, façade was beginning to crack. The teller, clearly embarrassed, explained that he couldn’t give him the money until he knew where it came from. "I made it selling drugs," said Mike. The teller smiled, as did a few others in line and there were murmurs of laughter.

The form and questions seemed as ridiculous as an American customs form. Are you a terrorist? It would have to be a pretty half-hearted terrorist that would confess because a form asked him to, likewise those making money in seedy ways aren’t likely to tick that box when a bank requests it.

Eventually a machine spat out a pile of notes and without any further ceremony they were handed over.

When Mike asked the teller to count it for him, the man looked confused as if the concept was foreign. He eventually agreed to measure it using one of the machines that weighs the notes.

The teller, however, quickly became flustered as apparently the settings were wrong, because older, used, notes weigh more than new ones due to dirt build-up etc. It took him three tries and a visit from his supervisor before Mike gave up and just took what he was given.

I’m left wondering how and why it became so difficult to gain access to your own money. It seems slightly invasive that you have to declare to a stranger what exactly you’re spending your cash on, be it a new car, breast implants, on overseas trip or an exotic porn collection. Isn’t it your business and yours alone?

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Elizabeth Davies is a 23 year old post graduate journalism student at Auckland University of Technology. She lives with her partner in Epsom and spends her free time refurbishing vintage furniture and attempting to bake while fighting a daily battle against her bank balance. She writes a weekly article for interest.co.nz on money matters and financial struggles from a young person's perspective.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Its called compliance, unfortunately one of the few pieces of legislation where the teller can be fined, form is to protect the teller and the bank. Do you really think the bank would care how you made your money, of course not.

The bank kind of cares. If the bank suspects the transaction is suspicious, they have to file a report with the reserve bank. Stating that you made the money through "drugs" might actually trigger the report.
 
The compliance burden on banks is fairly dramatic. AML, FATCA, LVRs. It's the price consumers pay for living in a highly regulated society.

So why would you not provide this information when you deposited the money? Not compliance but more data gathering by system that knows all.

Is anybody at interest.co.nz actually providing guidance and training to Elizabeth?  Just telling us that she doesn't know why  something happened to her isn't journalism.  There's no information here and nothing that would help anybody to make financial decisions.
Finding out what the rules actually are that apply to banks, asking a few other banks how they implement them, asking RBNZ or IRD or whoever what is the reason for the rules and reporting the results of this research, that would be journalism.

I find her jounalism excellent thanks Ms, an I suggest so do other readers here. I had no idea about this new policy at banks and thanks to Elizabth I now do. You seem have a neagtive view point about all her articles?

I found the journalism disappointing.
Research would have explained the laws and reasons behind the paperwork.

Also it would be an excellent chance to highlight the franchice and "hybrid" banks, which are there to provide loan and credit services, not cash handling for cash-bureau type activities.

As can be imagined, banking services can be supported much more cheaply if no cash is held on premises, (apart from perhaps a permanently secure deposits safe, eg "mailslot" design on fixed timer).  That's less plate glass, emergency dropdowns, security cameras.  Less tills, less monitoring of tills, cash drawers and watching staff.
 Also on the money side it means that less coinage has to be kept available.  They pay extra for "cash-the-money" and unfortunately they have to have "enough" sitting around waiting for a rush of customers...and that's not the "E"nough on your cars fuel guage.   That's all money which isn't in loans, isn't doing anything, and costs more than digital cash :(

No, you don't know about "this new policy at banks" on the basis of this article.  This article told you only about an individual experience in one circumstance with one bank.  This does not in itself tell us whether it is likely to apply at all banks, who else is likely to be affected by it and under what circumstances, etc.   What exactly are the requirements of the money laundering laws, and what is the reasoning behind them?   Was the teller actually correct in saying that this was something he was required to do, or is that just the way he individually, or this particular bank, has chosen to interpret the law?    Do other banks interpret the requirements differently?  These are all things that could have been found out and reported on with a bit of research.
 
I don't have anything against Elizabeth, on the contrary I think she has a good attitude, writes engagingly and deserves to do well.  I hope she does.  But I don't think she is being as well guided and advised as somebody at the start of a career ought to be. 

u might find this interesting... 
There does seem to be a policy to make it more difficult to transact in cash.. ( at a govt/banking level).
http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?fiidarticulo=233
 
Whether it really is in the name of fighting money laundering and  terrorism.... who knows..??

I agree wiht Ms de Meanour, I too want to hear more about the exotic porn collection. 

Elizabeth, this is fractional reserve banking.
 
If all folk wanted 'their cash' out, it can't deliver. By several orders of magnitude.
 
Their 'equity' - which just the fraction bit - is based on goods/services being traded. A mortgage, for example, relies on the borrower being able to produce a good or a service, for many future years. The underlying 'value' of the mortgaged property is an expectation of that too. What's a property worth in a permanently-declining-income scenario?
 
So if the ability to produce real goods and services peaked - which it inevitably mathematically/physically had to - then so did the amount of real underwrite to the 'fraction'. This means a compound reduction in what is able to be 'loaned' (the majority of which is of course spun into existence as debt, no more real than just numbers on a screen.
 
Ironically, if all folk who think they have 'savings' or 'investments' went out now to buy stuff, there whoudn't be enough available. You expect that before the peak - supply gearing to demand - but beyond the peak you can't gear-up supply. The short-fall hits the low-end first - Bangladesh, etc - then progressively up the chain. We are at to point where the first-world middle-class are being hollowed-out; a guarantee that the end-game is here.
 
Cash will be king in a post-crash (and it has to be a crash, they can't QE indefinitely) scenario. Why not research that stuff - it would be a useful POD in a NZ media which collectively is pretty pathetic. Research - or investigation - what we're lacking, which is why the spin-doctors are having so much effect.

I actually think by the time this plays out like I think it will...  then cash will be worthless... 
Money doen't underwrite anything....nor is it underwritten by anything.   Its' just a piece of paper that we use as a medium of exchange, and that we have been fooled into thinking is a store of value.  It is our confidence in the "monetary system" that keeps it going... 
And as a piece of paper, it is ...oh so easy...  to create more and more of it...  ( At first glance it seems like alchemy ).
Dangerous to talk as if a certain senario will happen...  It can blind one tfrom seeing the signs that other possibilities might be unfolding..
 
 
 

It's a time & risk handling discentive, if you regularly do this talk to the (real) manager ask for an exemption.

I tried withdrawing cash from KiwiBank the other day to avoid paying them any fees for a bank cheque BUT they said they would charge me a fee for giving me cash!!  I had to think of another way.  I don't think I will get Alzeihmers what with trying to find my way round Christchurch where every route changes every day and now having to think how to stop giving those banks any extra money!

Hopefully the rise of Bitcoin will encourage the authorities to remember that the money we lend to the Banks is still our money not their money.

Elizabeth, see invitation below .
You have bumped your head agaisnt the Anti-Money Laundering and Counter Terrorism Act 2009 , otherwise  known by the acronym AML-CFT which only came into effect here on 30 June last year .
Interestingly , New Zealand is way behind everyone else in the implementaion of this .
Its about to get worse when Phase II comes into effect which will be expanded to non-financial businesses such as Lawyers , Casino owners and Chartered Accountants ( thats a barrel of monkeys all on their own) , who will be required to comply .
We ( New Zealand) are party  to an agreement to  comply with a G7 Directive called the FATF
Its ostensibly for our own good , as it will "enhance New Zealands international reputation" , or thats the Carrot ,but  there is a also a stick if we dont comply .
For most of us its  a bit like all the annoying security processes on international flights , but it is what it is , and its here to stay.
So you can get a better undertanding of this whole thing , I will be able to extend you an invitation to attend a short evening workshop run by Chartered Secretaries New Zealand  on this topic in May , which will enable you to get some insights  .
I have chatted to Gareth Vaughan about inviting someone from the interest team , so he is aware and is keen to cover it

Cheers Boatman. And all our anti-money laundering stories can be found here  - http://www.interest.co.nz/category/tag/anti-money-laundering-0

This sort of regime would be very useful in stopping future bank runs.
Teller: Why do you want to withdraw your money.
Customer: I want to invest it in an Aussie Bank which has deposit insurance.
Teller: Not a good reason.
Next please

Indeed.  Bear in mind that your savings are technically unsecured liabilities of the bank.  There are secured liabilities, and they're called "secured bonds" but as a depositor you're not entitled to that level of protection.
I was using ANZ electronic banking the other day and noticed that you have to enter a text message code before transferring large amounts of cash.  Its marketed as a security feature but if you're a cynic like me, then you might regard that as a mechanism of capital control.

I think this and Open Bank Resolution would work well together.
The Bank could deny a transfer due to so called security concerns while the Government takes its time deciding how they are going to announce that they are going to give you a haircut(confiscate your money).
I am not sure how much control the Bank has when it comes to denying a transfer.
I get the impression there is an unaccountable group of warm bodies somewhere in the system which watch over the transactions and have the final say. Its all very secretive.
 

When HSBC did the same thing it sparked speculation that it was to reduce risk of bank runs. (http://blogs.marketwatch.com/thetell/2014/01/27/hsbc-makes-cash-hungry-c...)

Good article.
Speaking of HSBC:-
 
I described in a prior article how HSBC hit the money launderer’s trifecta.

1. Laundered billions of dollars for some of the most murderous drug gangs in the world. These gangs have murdered many thousands of Mexicans and devastated much of the nation.
2. Aided Iranian entities to evade U.S. financial sanctions on Iran. If Iran is actually developing a nuclear weapon and if it uses such a weapon to attack it could kill tens of thousands of people and HSBC and Standard Chartered will likely have proven useful to Iran in developing the weapon.
3. Aided Hamas, Hezbollah, and al Qaeda to evade U.S. financial sanctions. The U.S. considers them terrorist organizations.
“In total, the bank’s U.S. and Mexican units failed to monitor more than $670 billion in wire transfers and more than $9.4 billion in purchases of U.S. dollars from HSBC Mexico (BIBC), Breuer said.”
http://www.nakedcapitalism.com/2013/05/bill-black-how-dare-doj-insult-hsbcs-crooks-as-less-professional-than-liberty-reserves-crooks.html

It's probably an urban myth but it goes like this.
Kiwi guy goes to New York especially to get a whole bunch of IT hardware at prices unbelievably cheap compared to NZ shops.
In the New York Shop he assembles a great pile of gear and hauls out a great wad of $US cash to pay for it.  The shop assistant looks right, looks left, looks nervous, then makes an excuse and goes out the back and calls the cops. 

Heard it was used car dealerships - better trade rate on used cars....

I'm all for getting a young person perspective on things, but when youre writing articles for the public I do expect a little research to have been done first to ascertain what rules have changed, what might be specifc to that one bank (not in this case) to complain about, and perhaps then discuss that. The AML rules are dracoian but we're stuck with them for some time until a bit of balance is bought back into them, but that ain't gonna be any time soon unfortunately.

At least she didn't suggest interest rates weren't going up! ;)

It will interesting to see how long such invasive questions and forms last - given that many New Zealanders respond to such bombastic demands with barely disguised farce, rather than diligently gathered facts. 

I suspect you would not have had a problem if we did not have such pathetic amounts available via the cash machine. In Japan I could easily withdraw up to 10K in cash using my regular bank card. Why is the limit set at $800 a day here? Why did you not just transfer money to the car sellers bank account using online banking?    

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