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Why are bad laws needed?

Why are bad laws needed? Surely that's the problem. And what mechanisms for "realignment" do you have in mind? The relevant money transmitter laws in the USA take at minimum several years and millions of dollars to comply with, without any really good reason. The evidence that they achieve anything is minimal (try finding good academic studies of this - it's an exercise in frustration). There is NO way to reform them because the laws are highly open to interpretation, and the regulators who apply them freely admit that they pretty much do whatever they want with applicants: http://www.americanbanker.com/issues/178_151/how-california-... US money transmitter laws have created a kind of death spiral where regulators see startups as dangerous (they explicitly say that in the article), make it difficult for them to get licenses, and so the entire market ends up owned by stagnant incumbents. There is then nobody left to lobby for changes to the laws, and big entrenched interests who don't want competition, thus it's impossible to get reform.

Posted by mike_hearn on May 6, 2015, 1:53 PM

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Why are bad laws needed?

mike_hearnMay 6, 2015, 1:53 PM

Why are bad laws needed? Surely that's the problem. And what mechanisms for "realignment" do you have in mind? The relevant money transmitter laws in the USA take at minimum several years and millions of dollars to comply with, without any really good reason. The evidence that they achieve anything is minimal (try finding good academic studies of this - it's an exercise in frustration). There is NO way to reform them because the laws are highly open to interpretation, and the regulators who apply them freely admit that they pretty much do whatever they want with applicants: http://www.americanbanker.com/issues/178_151/how-california-... US money transmitter laws have created a kind of death spiral where regulators see startups as dangerous (they explicitly say that in the article), make it difficult for them to get licenses, and so the entire market ends up owned by stagnant incumbents. There is then nobody left to lobby for changes to the laws, and big entrenched interests who don't want competition, thus it's impossible to get reform.

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