Banking

Ice Cream Bank Alarms Pennsylvania Regulators

This may be a unique combination of services.

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In which Wall Street Journal correspondent John W. Miller describes a Pittsburgh business with what might be a unique combination of services:

Let the lamp affix its beam/The only banker is the banker of ice-cream

State banking officials want to put the freeze on the owner of an ice-cream parlor who opened a community-bank alternative that pays interest in the form of gift cards for ice cream, waffles and coffee.

Ethan Clay, 31 years old, opened Whalebone Café Bank seven months ago in his shop, Oh Yeah!, a year and a half after he was hit with $1,600 in overdraft fees from a local bank where his account was overdrawn by a series of checks.

Mr. Clay says he wants to offer an alternative banking experience, and has accepted small deposits and made small loans. He claims he isn't subject to banking rules because his operation is a gift-card savings account.

"It's a strange case, we don't have the authority to go close an ice-cream store," said Ed Novak, spokesman for the Pennsylvania Department of Banking. "But we are going to do something. You can't mess with people's money."

Read the whole article for the details of how the ice-cream bank works, and also for unintentionally hilarious quotes like this one:

Oh Yeah! does not have depositors insurance. "If a bank goes under, the depositors get their money back," said Mr. Novak. "If the ice-cream store goes under, who knows what happens?"

[Via Rad Geek.]

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  1. “But we are going to do something. You can’t mess with people’s money.”

    Unless you work for the government. Then it’s your duty to mess with their money.

    1. The lack of self-awareness is astonishing

    2. Yeah, seems to me like everyone’s money will be fine until the jackboots come stomping in.

    3. They’re irony-impaired, let’s move on!

  2. “It’s a strange case, we don’t have the authority to go close an ice-cream store,” said Ed Novak, spokesman for the Pennsylvania Department of Banking.

    Hey, so if you don’t have the authority to stop it then it’s cool, right?

    “But we are going to do something.”

    Oh. Right.

  3. Oh no! People engaging in voluntary economic activity without asking permission and taking orders! Make it stop! Make it stop!

    1. It’s for the children – and everybody is somebody’s child, correct?

      1. But children love ice cream.

        1. Exactly. We must protect the children from unscrupulous banker/ice-cream salesmen who want to drain their coffers while rotting their teeth and enfattening them. It’s a threefer! Financial services AND sugar AND obesity protection!

      2. It’s for the children – and everybody is somebody’s the government’s child, correct?

        ftfy

        1. Wait, wait, I thought we all belong to the government, as in property. Children are heirs to the fortune and I don’t get the impression I’m going to inherit anything other than the bill.

          1. You are both right. We belong to the government, as the government’s property, but are to be treated like children.

          2. Just split the difference and say that we are the government’s pets.

            1. No, pets have their needs met at no cost to them. We are more akin to indentured servants, except that indentured servants had a choice in the matter.

              1. pets have their needs met at no cost to them.

                Your pets, maybe. The Dean pack runs a nice neighborhood “protection” service and shows a modest profit.

                “Nice cat. Be a shame if anything were to happen to it.”

  4. So, “offering people a service to store their money” = “messing with their money”?

    I forgot… these are the people that think “reducing taxes” = “subsidizing” and “subsidizing” = “investing”

    1. The government is very afraid of a barter economy. It’s too hard for them to track, and if they can’t track, well then, they can’t control, and if they can’t control, well then, why do we need them?

      1. More importantly, it’s hard to tax a barter economy (or a money economy that doesn’t go through banks).

        1. Sort of what I meant by control. Our current tax system is a means of control as opposed to a means of raising funds.

          1. Everyone but Tulpa knew what you meant.

            1. As a mathematician I pride myself in not replacing what people say with something else I think they mean.

          2. Our current tax system is a means of control as opposed to a means of raising funds.

            I gotta disagree with this. There is certainly an element of control to the cornocopia of contradictory credits and deductions, etc, but the primary purpose is to get their hands on our money.

  5. “But we are going to do something. You can’t mess with people’s money.”

    The “people” he’s talking about are the big banks, who see all our money as theirs.

    “If a bank goes under, the depositors get their money back,” said Mr. Novak. “If the ice-cream store goes under, who knows what happens?”

    Pretty sure the depositors are fully aware of that possibility when they give their money to the ice cream store.

  6. that pays interest in the form of gift cards for ice cream, waffles and coffee.

    How is this any different than buying 4 meals and getting the 5th one free?

    1. Mayor Bloomberg on line 1, he’d like a word with you.

  7. “It’s a strange case, we don’t have the authority to go close an ice-cream store,” said Ed Novak

    Ed and I will agree on one thing. It is strange that they haven’t granted themselves this authority yet.

  8. “That’s what governments are for: to get in a man’s way.”

    1. As my neighbor likes to say “Government is the idiots who tell the experts how to do their job”.

      1. When the Soviets would take over an Eastern Bloc country, they would install their apparatchiks at the top, who would then go out and recruit peasants to run things at a local level. The end result was that you had uneducated dirt farmers who got a taste of power and would then use it to their own advantage. Meanwhile, the central government looked the other way as long as the power structure was kept intact.

        1. Sounds like a typical regulatory agency in this country.

          1. sarcasmic, you apologize to dirt farmers right now! What did they do to be compared to regulatory employees?!

            1. Good point. In the course of my work I have walked the halls of federal regulatory buildings, and the average dirt farmer is indeed more intelligent and hardworking than the most intelligent and hardworking federal employee I’ve ever met.

  9. Do they have any evidence that he is, in fact, messing with anyone’s money? If they can’t charge him with fraud or theft, they should leave him alone.

    1. He’s engaging in economic activity in a manner that differs from how authoritah has determined that it should be done.

      He might as well have killed someone.

    2. Haha! Oh my! HA HAHAHAHAHAHAHAHAHAHAHAHAHAHHAHAH DHAKA HAHAHAHAHAHA HANNAH HAHA!

      1. dhaka?

        hannah?

        I’m confused.

      2. Occasionally I like to just state the obvious.

  10. Such reckless icecream speculation in the name of profit will drive up dairy costs until poor black children can’t afford frozen treats.

    This whole thing is basically a backdoor Jim Crow.

  11. What don’t you drudges, slaves and other taxpayers understand about

    Legal tender for all debts public and private – ?

    Don’t like it? Go to jail. Coercive monopoly over money is insidious. Even innocent money-like experiments, such as this ice-cream one, create a degree of panic among those dependent on the protection racket as constituted.

    I refer you to the case of J.S.G. Boggs, he of what should be the famous Boggs Notes. Look it up and fear your friendly government, friends and fellow subjects.

    And this is an appropriate place to plug an economics site devoted to the free banking question: http://www.freebanking.org/

    1. I think a return to some form of the barter system is imminent, with cash being used only when that’s all what will work.

    2. Yep,

      This ice cream shop is a good example of how competing currencies could begin and what they would actually look like.

    3. I refer you to the case of J.S.G. Boggs, he of what should be the famous Boggs Notes. Look it up and fear your friendly government, friends and fellow subjects.

      We ran a short interview with Boggs 12 years ago.

      1. Now that you link to it, I even remember vaguely having read that. Thanks.

        But where is James Stephen George Boggs today? He appears to be alive and …. well, I don’t know, but residing somewhere around Saint Petersburg, Florida. (He had some trouble around 2007 or 2008 with the warondrugs thugsters.)

        Maybe it’s time to re-interview him. Perhaps in some Pittsburgh ice cream parlor.

  12. Let’s say, hypothetically, he over orders or a freezer goes out. Then their would be a “destruction of capital” and possibly a “credit crunch.” So, hypothetically, Benny and TIMMEH! would have to provide somekind of crisis bridge loan of sorts to save the Galactic Ice Cream Economy (flashback to ’08) or OH MY FUCKING GOD – WE’RE DOOMMMMMMED!

    So – TARP II: The Ice Cream Truck Cometh.

    1. “Credit Crunch” – I think you have just invented a new flavor of ice cream!

      1. Ben and Jerrys on line 2. They would like a word with you.

    2. “TARP II: The Ice Cream Truck Cometh.”

      I wonder what tune that truck would play? The ones around here played “Turkey in the Straw” this year.

      Maybe “Money” by Pink Floyd?

  13. I do wonder if the ice cream guy, angry at the big banks, and his customers are the type of people who have been calling for more regulation of those banks. And then if he and his customers are shocked to find those regulations turned on them. “That wasn’t what we wanted at all!”

  14. Oh Yeah! does not have depositors insurance. “If a bank goes under, the depositors get their money back,” said Mr. Novak. “If the ice-cream store goes under, who knows what happens?

    Oh! Oh! I know! Pick me! Pick me! I know!

    Ok, how about this: He liquidates his assets so he can repay his clients.

    What? Too novel? Too much of a strange idea? Really? Too far out? Banks, selling their assets to repay their customers? Is that too much “out there”? Huh? Huh?

  15. “But we are going to do something. You can’t mess with people’s money.”

    Next stop: the office of one Bernanke, Ben”.

  16. I wonder what tune that truck would play?

    The Battle Hymn of the Republic would be my guess.

  17. You can’t mess with THE People’s money. He missed a the. And remember to vote TEAM BE RULED. You don’t want to mess with The People’s Republic now do you.

  18. Wallace Stevens alt-text reference FTW. Nice work, Jesse.

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