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I'm sympathetic to his concerns, and I applaud him for putting his money where his mouth is. Some comments:

> an under-documented local Rutgers student...We sought an exception from the NCUA, but they said no.

I don't know why he would expect to lend money to an illegal alien, nor why he expects the government to let him deal with someone whose very presence is a violation of the law. I should be surprised that a state university admits someone who has not been admitted to the state which owns that university, but I'm not.

> We were stunned to find we were the first full service credit union chartered in New Jersey since the NCUA was formed 1970.

I'm not all that surprised: New England is a particularly corrupt and regulation-bound part of the country. It's amazing to me that anyone would do business there or California.

I'm not surprised, although I am saddened, at the failure of their Bitcoin effort. I'm fairly certain than NCUA was concerned about the possibility of money laundering (never mind that it shouldn't be a crime, nor should it be something the regulatory system cares about: it is and it does, and that has consequences).

> I see a system as unhealthy if regulators put 200 to 300 institutions out of business every year for decades on end while only allowing a few to start.

Are those 200-300 healthy or not? Are the ones allowed healthy? Are the ones disallowed unhealthy?

This is the problem with regulation: it's in the regulators' interest to be as strict as possible, because any failure will be harshly punished (in the press, in the civil service, and in the courts), while success has no reward.

Kahle has had an unpleasant introduction to the real world. Regulation has costs, typically hidden from idealists; they are revealed to him, because he tried to do something new.




>>I don't know why he would expect to lend money to an illegal alien, nor why he expects the government to let him deal with someone whose very presence is a violation of the law.

This type of banking is a specialization that is referred to as "low documentation" by bankers. It exists in areas with large migrant worker communities like California and Washington.

It is innovative and profiable, but extremely difficult in the post 2008 regulatory climate. I know bankers who work in this industry. The commentary I have heard is that the regulatory burdens are severe.

If you don't have the endurance for being incorrectly threatened with fines and crimes which you have to successfully prove wrong, you won't survive.

It sounds like gambling with stakes that exceed my risk tolerance.


New Jersey isn't New England, and I resent the insult to New England.




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