<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>trollbridge</author><text>An act of Congress (I believe it was Dodd-Frank) capped debit card fees at a very low amount (fractions of a precent). An exception was left in for small banks to continue to charge credit-card-like rates for debit cards, around 2%.&lt;p&gt;Since then, every fintech has had essentially the same business model:&lt;p&gt;- Come up with some kind of &amp;quot;innovative&amp;quot; thing to sell consumers on that results in them generating debit card transactions. (Online bank account, instant international money transfer, loan, etc.) - the trick is that to get the money, you swipe that debit card.&lt;p&gt;- Partner with some small bank so that they are one the one providing the debit card. The law essentially has a loophole on it allowing this.&lt;p&gt;- The fintech company sets up essentially everything, with all the small bank does is have automated accounts created for cardholders when the fintech&amp;#x27;s software says so. No money is kept in the customer account until the moment of that debit card swipe - then it is instantly transferred in and instantly transferred back out for the payment.&lt;p&gt;- This requires reserves, but the fintechs and small banks collaborate on how to get good interest on the reserves involved.&lt;p&gt;There are now fintechs which offer &amp;quot;fintech as a service&amp;quot; which will set all of this up for a tiny bank who can then offer this to any other fintech with almost no involvement from the tiny bank. All they have to do is sign a few papers.&lt;p&gt;The definition of a big or small bank is based on the amount on deposit, so they are careful to not actually have any money on deposit.&lt;p&gt;Congress needs to correct this abuse, immediately, and only allow the larger debit card fees for traditional checking accounts held by consumers where the money involved is held on deposit at that bank.&lt;p&gt;Edit: one of the major problems here is that small banks are often not staffed for adequate cybersecurity for global operations like these; they do just fine doing hometown community banking, but are very vulnerable to being cracked like this. Yet another reason small banks that are providing big-bank services should be regulated like big banks.</text><parent_chain><item><author>lowkey_</author><text>Can someone explain why in the world Evolve has my data? (I use Mercury and Wise for my company). I tried going to their website and I&amp;#x27;m still completely clueless.&lt;p&gt;Edit: Apparently Mercury was using Evolve as their banking partner. I know this is super common w&amp;#x2F; online neobanks, but I&amp;#x27;m really confused as to why they always choose the most random obscure bank. Why not partner with a major bank, or Column?</text></item></parent_chain></comment><story><title>Evolve Bank and Trust confirms LockBit stole 7.6M people&apos;s data</title><url>https://www.theregister.com/2024/07/09/evolve_lockbit_attack/</url></story>
<instructions>Your goal is to analyze the following comment and estimate how highly it will be upvoted by the Hacker News community.</instructions><comment><author>ibash</author><text>Fintechs partner with banks like evolve to do the actual banking.&lt;p&gt;So when you open an account with mercury, under the hood they’re opening an bank account with a bank and sending transactions through it.&lt;p&gt;There’s a lot of kyc&amp;#x2F;kyb regulation around financial services. Eg banks can’t provide services to certain people. So the underlying bank needs to know who you are.&lt;p&gt;&amp;gt; Why not partner with a major bank, or Column?&lt;p&gt;Column didn’t exist when mercury was founded. And it’s not that easy to secure a banking partner. Its not like signing up for a free checking account.</text><parent_chain><item><author>lowkey_</author><text>Can someone explain why in the world Evolve has my data? (I use Mercury and Wise for my company). I tried going to their website and I&amp;#x27;m still completely clueless.&lt;p&gt;Edit: Apparently Mercury was using Evolve as their banking partner. I know this is super common w&amp;#x2F; online neobanks, but I&amp;#x27;m really confused as to why they always choose the most random obscure bank. Why not partner with a major bank, or Column?</text></item></parent_chain></comment><story><title>Evolve Bank and Trust confirms LockBit stole 7.6M people&apos;s data</title><url>https://www.theregister.com/2024/07/09/evolve_lockbit_attack/</url></story>