The problem is that armored car companies currently have no have no ability offer that service. All pickups are settled through settlement accounts at banks. You cannot take deposits without falling under federal regulatory compliance.
The state needs to pass laws creating or making possible the creation of a state approved depository. This could begin to undermine the power of the fed and start a. It states rights battle
Why can't a (possibly new) armored car company offer that service?
Strictly speaking, they wouldn't be in the business of settling accounts at banks. They would be in the business of selling securities for cash. I could drive around in a car and provide the same service, only I'd want the security of an armored car to transport the cash. I would drive the cash to the bank and deposit it in my perfectly legitimate business account.
One thing I don't understand: what kind of securities would these be? They would have to be sold on the spot, yet somehow more secure than cash.
When someone hands you cash and you are giving them something not a product/service (i.e. can't be a monetary instrument or a promise of in anyway providing the money back to the customer) then you are acting as a bank.
So a new company can offer the service, but the aren't an armored car company they are a banking company and are required to get a banking charter.
You can try create services that somehow skate the line (which is what all of the check cashing, payday advance, and title loan companies do, but they are classified as MSBs), but an AG (Attorney General) in any state where you are operating can come after you. The feds will also come after you if they think you are illegally taking deposits which can involve criminal charges.
- There is an important difference between MSBs and banks: banks can take deposits.
- Loan companies (e.g. payday advance, as you mention) are different: they need a Consumer Credit Licence and are regulated by the OFT/FCA.
To your main point: I don't understand how (even in the US) my accepting cash in exchange for 'not a product/service' would mean I'm acting as a bank. Would I be breaking the law if I were to sell you a single share of, e.g. Google stock, in exchange for cash?
> You cannot take deposits without falling under federal regulatory compliance.
It sounds like there's a need for a "safety deposit box delivery" service. They'll deliver a safety box to you, which you fill with whatever makes you happy. You close it, and they pick up the filled and locked box. It then gets stored in a secure vault.
That would avoid a lot of fear surrounding the personal transport of money.
It sounds to me like a business ready for disruption.
It is in need of disruption, but there are alot of laws surrounding taking cash from people for something other than a product/service.
The problem you'll run into with the black box scenario is that the customer has no access to the funds unless you bring them the box which makes it a poor place to keep working capital funds that businesses use. Even if you start giving loans based on the box you start hitting legal restrictions, and compliance issues.
I worked for years in the financial industry focusing on services for the under/unbanked which relies on a lot of cash handling.
Every way you can think about how to get around the law has been used in the past to launder money and/or evade taxes.
The state needs to pass laws creating or making possible the creation of a state approved depository. This could begin to undermine the power of the fed and start a. It states rights battle