When you write a check, you are telling your bank, "Hey, bank, send money to here". If you have the money, and "here" exists, they send the money.
The bank doesn't have the liberty to say "We don't think you should be sending money to there". The federal courts and the treasury can, but that's a high hurdle and basically means "there" is under investigation for crimes.
What the bank CAN do is say "you don't have that money", or "we don't think you're actually you". The latter case, they have to ask you "hey, did you authorize this?" and if you did, they send it through. But compared to credit cards, banks tend to be more fast and loose about sending transactions through as long as the balance is okay. They simply don't care too much.
If you don't offer loans, what stops "real" banks refusing your customers loans purely because they are with you?
The problem with fighting the system is that every little thing has to be heavily protected from shitty tactics.
To put it another way...
When you write a check, you are telling your bank, "Hey, bank, send money to here". If you have the money, and "here" exists, they send the money.
The bank doesn't have the liberty to say "We don't think you should be sending money to there". The federal courts and the treasury can, but that's a high hurdle and basically means "there" is under investigation for crimes.
What the bank CAN do is say "you don't have that money", or "we don't think you're actually you". The latter case, they have to ask you "hey, did you authorize this?" and if you did, they send it through. But compared to credit cards, banks tend to be more fast and loose about sending transactions through as long as the balance is okay. They simply don't care too much.
Because clearing isn't a loan.
Think of it as a "push". The other bank can only refuse if they don't believe that the transaction was authorized by their depositor.
It is a depositor telling their bank "take my money and sent it to here".
They can only say no if they believe their depositor didn't actually authorize it, or didn't have the money to do it.
I think you missed my point here.
What stops your customers being refused loans from other banks because they're with you?
Oh.
Greed, and the threat of CFPB action, and exposure to anti-trust action as well.