Question for liberals and progressives, and possibly some conservatives

[nancylebov]

American banks are closing the accounts of small businesses near the Mexican border from fear of laws against money laundering.

As a libertarian, my opinion is easy to come to-- laws controlling drugs and forbidding immigration are bad and this problem wouldn't exist if it weren't for those laws. This might even be evidence that they're bad laws.

However, if you believe that the government should regulate business to prevent public harm, is this over the line? Would you change the laws about money laundering, and if so, how? Is this an example of people having to make sacrifices for the public good?

If you're a libertarian or have libertarian-flavored politics and would like to explain in more detail about why those are bad laws, go for it, but I'm definitely interested in hearing from people with other political orientations.

Meanwhile, I'm working on a theory about laws against remote harms are a problem.

Comments

[andrewhickey.info]

My view as a liberal in the UK sense of the term, which is slightly different from the USian one, is that laws against immigration and drug importation should be ended, but that money-laundering laws would probably still be needed, because there will always be illegal trade of one kind or another (stolen goods, proscribed weapons, forged currency, stolen credit card details...).
However, with an end to drug and immigration laws, I suspect that money-laundering laws would have no special reason to target Mexico, and this particular problem would go away.

[mishalak]

My opinion is that I do not have enough information to know if the American government's requirements for account monitoring are onerous or not.

Big banks often dump small account holders because they are not profitable enough. It is not that there is not money to be made it is just that the big banks prefer to deal with a few nice big accounts rather than a bunch of small ones. So dumping the accounts of cross boarder businesses could be a facet of that effect where any level of regulation at all would be "too much" and cause the banks to dump small customers. On the other hand I have no idea what information the government is requiring banks to know about their customers to be able to give them information about money laundering and the banks could have a point, but I doubt it. It would be the first time in years that the banks have not lied about their true financial situation.