Most people treat bank deposits as bailment. Why is this the case? Is this a problem? Explanation: 99.999% of people treat bank deposits as bailment. But under FDIC rules, only the first 0.25 million is bailment. Amounts above that are loans to the bank. If the bank goes bankrupt, that amount is subject to loss. But the problem is, 99.999% of people do not operate that way. This includes multi-millionaire tech founders who deposited large sums with Silicon Valley Bank. An analogy: Imagine if 99.999% of people thought that they could petition their grievances to the government. But when they actually try to do so, government agents arrest them by the thousands and throw the book at them. This scenario is absolutely 100% hypothetical. Questions: (1) So what is the reason for the massive discrepancy between expectations and reality, regarding the nature of bank deposits? (2) Is this discrepancy a problem? From what I see, it results in continuous bail-outs of failed banks, because people deposit critical funds and life savings in loan instruments that they perceived to be bailments. (3) Are banks guilty of not properly informing customers about the non-bailment nature of deposits above 0.25 million? (4) What can be done from a legal point of view to reduce this discrepancy between expectations and reality?
99.999% of people treat bank deposits as bailment. This is not borne out by the evidence. The evidence is that most people do not conceptualize their daily interactions and relationships in legal categories like &quot;contract,&quot; &quot;bailment,&quot; etc. Most people do not turn their minds to the web of risks and rights that they operate in day to day. But under FDIC rules, only the first 0.25 million is bailment. This is also not true. No monetary deposit is a bailment. The concept of bailment is limited to tangible property (e.g. the contents of a safe-deposit box). This is well-established common-law principle, but see generally Dickerson, &quot;Bailor Beware&quot; (1988). The remainder of your question asks for multiple opinions, each of which appears off-topic here, so I have tried to correct misunderstandings in your premise.
If I read this correctly, (and more context would support this, but I don't have time to do research at the moment; I also don't have the book in question, so I'm only basing off of the provided snippet) then it appears two different (higher court) justices making rules, not only to guide their own judgements before them, but for reference for lower court justices to base their rulings against. Note that these two cases appear to have taken place about 3 decades apart, and in two different countries, albeit with related legal codes. The Purple is "identical" to the Green, because their wording is near enough identical between the two passages. I don't think "dumbness" or lack of distinguishably is implied. Rather McRae's rule is Conditions Green AND (logical "and") Condition Red, while the British rule is just Condition Green. The orange text suggests that, under the rule in Associated Japanese Bank Ltd v Credit du Nord SA, Condition Red need NOT be shown. I.e., you don't need to show that a party is responsible for convincing the other party of an unreasonable falsehood, to prevent the first party from using the doctrine of "common mistake". It also suggests that the rule from McRae does impose Condition Red. Essentially, the text is describing two different (non-exhaustive) tests for determining when the doctrine of "common mistake" can be invoked.
I'm assuming you are talking about "warrants in debt" and not arrest warrants. A warrant in debt is that the creditor has filed with a court for the repayment of a debt. The court will then issue a judgement (in default if you do not appear) either for the creditor or the debtor. After that, the creditor can then (if they win) seek things such as garnishment to repay the debt. Now in the UK, they have accepted the "Electronic Communications Act of 2000" which means that a Qualified Electronic Signature (QES) is as legally binding as a "wet ink" signature. Non-QES signatures may also be binding, but that requires additional evidence. Let's take an example of a small personal loan. Let's say you apply electronically for a loan of X amount. The loan is approved and the money is transferred into your bank account electronically. You spend the money but make no attempt to repay the loan. First the bank will make attempts to collect the debt via normal means, then they may sell the debt to a debt collector. The debt collector will apply for a "warrant in debt" to take you to court for the amount (possibly with fees). If you do not appear, a default judgement will be applied to you. If you signed the loan application with a QES compliant system, that signature is all the debt collector will need to show that you accepted the debt and the repayment terms. If you did not sign with a QES system, they can still submit the application but they may have to prove other things, like: Your intent to obtain money for some purpose Your action in keeping/spending the money No action on your part to return or rectify the transfer Any payments you may have made towards the loan (shows that you acknowledge the loan and terms) So no, as of at least 2000 most countries accept some type of electronic signature to be legally binding. An entirely different topic would be if the debt is legal without the paperwork. Many debt collection agencies buy debt in bulk that may not be much more than an Excel sheet with the amounts and names/addresses and other personal information. A lot of times the entire debt "paper trail" is not transferred with these debt purchases so a debt collector may have purchased $10 million worth of debt for $50,000 that is nothing more than an Excel sheet. I believe in the US this has held up, but I'm not sure about the UK/rest of the world. What the YouTube people may be saying is that they don't have anything regarding the debt as far as binding paperwork goes. That may be something completely different.
You can file a complaint with the CFPB regarding 12 CFR §1005.10(e)(2)-1. Your individual state Department of Labor may enforce similar state level regulations too. And, yes, this technically falls under the FDIC as well. You can also file a complaint with them, although it's very unlikely they would pursue any action against a non-bank employer. The FTC has also pursued cases in violation to this statute, however those have only targeted lenders forcing the use of certain banks, and were not aimed at employers.
In contract law in the United States, this is a "liquidated damages" clause. It provides that when one side breaches the contract, it has to pay a certain amount of money to make up for it. Normally this is done where it is difficult to calculate the actual damages in the event of a breach, or where the parties would rather avoid calculating the actual damages--a common example is where you put in an earnest money deposit on a house and then forfeit the earnest money if you do not buy. However, there are restrictions on what kind of damages are permitted. Notably, a "penalty" usually refers to an unreasonable amount that is unenforceable as against public policy. It would ordinarily be unreasonable to make someone pay a hundred million dollar penalty for breaking a ten thousand dollar contract, for example. Liquidated damages clauses frequently say "this is not a penalty" and "the parties agree this is reasonable" to make it harder to invalidate them on public policy grounds. Instead, if the liquidated damage payment is a payment meant to reflect actual damages that are just hard to calculate, it is much more likely to be enforceable. You would need to research liquidated damages and penalties in the state whose law governs the contract to determine whether the particular clause is permissible under state law. See https://www.google.com/search?q=restatement+of+contracts+penalty&amp;ie=utf-8&amp;oe=utf-8
I assume that the loan was legal, in light of rule changes pertaining to non-borrowing spouses. If so, there is really no recourse other than to repay the loan. This article explains the current options / restrictions in an understandable manner, but of course it is too late to do anything about it. If there was actually fraud or coercion in the loan, or if the elder party was mentally incompetent, there might be some legal recourse, but we don't have any evidence of fraud, coercion or incompetence here.
You would likely have to show actual damages. And for example if you had a chance to buy a car worth $11,000 for $10,000 and couldn't because of the bank freezing your account, you'd have to convince a judge that the $1,000 possible profit was actual damage. Next you need to show that the bank explicitly guaranteed that your money would be accessible at any time. And assuming that blocking your account to prevent fraud against you was reasonable, how negligent were they when they couldn't unfreeze your account as quick as you would have liked?
I am just a foreign patent attorney who is studying common law to pass the California Bar Exam, but I will present my personal view. (I cannot guarantee the validity of my theory) There is an equitable theory called Constructive Trust. If it is established, the victim is entitled to benefit of any increase in value of defendant's (thief) property, meaning in this example victim (plaintiff) can recover $100 million. In order to assert CT, the following must be met: Wrongful appropriation; Here, D stole lottery ticket. Met. D has title; Here, D has title to $100 million. Met. P can trace his property to D's property; P can trace from P's $1 lottery ticket to its possession by D and collection by D of $100 million. Met. Unjust enrichment by D; D was enriched by stealing P's property (the lottery ticket). Met. Thus, it is highly possible that a court will order D to hold the property ($100 million) in constructive trust for P. This means, in plain language, that P will recover $100 million.