Tell HN: Coinbase will not allow ACH transfers without Plaid

[rhyme-boss]

Something changed in the past 30 days with Coinbase. They disabled my connected bank account for ACH transfers, which I've used for years on Coinbase. They force verification with Plaid. Their help/marketing documents suggest you can do deposit verification if you don't want to use Plaid, or if your bank doesn't support Plaid:

- https://help.coinbase.com/en/coinbase/getting-started/add-a-payment-method/how-do-i-locate-my-payment-method-verification-amounts

- https://help.coinbase.com/en/coinbase/getting-started/add-a-payment-method/payment-methods-for-us-customers

These claims are not true.

The support agent told me my bank wants me to use Plaid. I called my bank and they said they do not support Plaid, and that giving my bank login (username and password) to an unapproved third party might break my contract and customer protections. So Coinbase lied to me. Three different people said the same thing, that because my bank "requires Plaid" that I should give Plaid my login, which I never did.

The only cash-out options available to me now are to pay transaction fees for using a debit card or PayPal account, or go create a new bank account somewhere and allow Plaid to have access to it.

I'm looking for and not finding an announcement about this, which would have provided an opportunity to move money before these changes were implemented. Best case, it's really crappy policy from Coinbase and outdated marketing docs, and worst case, it's intentionally misleading and fraudulent. Just thought the HN community with assets in Coinbase might want to know about it.

[nostrademons]

This change was announced on November 23 2022 (over a year ago), they sent an e-mail to customers with subject line "Secure Bank Account Linking Through Instant Verification". There was a bunch of discussion on Reddit when it was announced, it looks like it might've been reverted due to customer outrage at one point, but it seems to be back and unavoidable:

https://www.reddit.com/r/CoinBase/comments/100aw7h/forcing_c...

I've got an acquaintance at Plaid, he says they do take security as seriously as they should, but that the company's existence in general is a terrible idea.

I'm glad that I took all my actual cash out of Coinbase right before the policy changed. I treat my remaining crypto there as basically play money to try out new technologies - if at some point it's exchangeable for USD, great, but my working model now is that it's for technology exploration and a hedge against the USD being worthless, and that actually using it will require building an economy that runs on crypto.

[altairprime → nostrademons]

Plaid supports oauth when banks do, but many banks are still hostile to “account access that doesn’t contain their in-app or on-site advertising upsells”, even when it’s secured safely rather than through credentials sharing.

[westhanover → nostrademons]

There have been several nonpublic data leaks from Plaid and also massive issues with improper internal access to data.

[mistrial9 → westhanover]

this comment would be improved with links or other verifiable info

[valrix → mistrial9]

https://www.plaidsettlement.com/

[zug_zug]

Yuck, Plaid is the one that wants access to all your transaction history and to share it, right?

[anderber → zug_zug]

I'm not sure but I know they need you to put in your bank's login information, which is a huge no for me.

[earthling8118 → anderber]

This is only if your bank doesn't support oauth for them to use. Which seems to be most banks but not all of them. For example if you use Chase you don't need to give Plaid any info.

[toomuchtodo]

File a CFPB and FTC complaint.

[rhyme-boss → toomuchtodo]

Done, thanks.

[toomuchtodo → rhyme-boss]

Thank you for taking the time.

[gbba]

> create a new bank account somewhere and allow Plaid to have access to it.

This is the way. There's plenty of free online banks, and it's pretty easy to open accounts nowadays.

[rkagerer → gbba]

Already had to do this for eBay as they don't allow seller payments in my country without linking to a bank account (and it's not just a one-way link, users have complained of unauthorized withdrawals).

[aynyc]

Isn't this against the consumer law? Or at least within the control of CFPB? I think many states have rules against that as well?

[the__alchemist]

I can no longer transfer money to my business bank account: Novo, as sometime recently they also require plaid. I've been unable to get plaid working; will probably have to close the account.

I feel like a sucker for even entering my bank username in password in the Plaid login, but that didn't work.

[aketchum]

This is likely a way for Coinbase to outsource KYC. Plaid gives you regulatory backing to prove you sent the funds to the person you think you did. There are other ways of course but this is an "easy" way for Coinbase to not have to worry about that.