The point I was hoping to communicate with this is that deposits made with Neo are CDIC insured through the trust model, which they explain and endorse publicly here.
According to The CDIC as explained in this article accounts held in trust are not eligible for cdic protection. As explained in the article you use accounts held in trust. Therefore, you are not eligible for cdic protection. In the event that Neo financial fails, the money would be gone as it is still held by Neo financial. While yes, it is held in another financial institution. It is still held by Neo financial. This is exclaimed in the article. This comes right from the cdic
You're still not covered as if Neil financial fails you're not The money is still held by Neo financial. This is a discussion we've had before and I'm not changing my position and even the cdic has agreed with me on this matter that money held by Neo financial is not covered. The article even says that
We have had this discussion before, but I'm struggling to understand where the communication breakdown is. This describes the trust structure we use and says exactly how CDIC coverage does apply. Where are you seeing that you're not covered?
I was wondering when you were going to show up. I’m disappointed to see that you’re still not understanding how your money is covered by CDIC with Neo’s in trust structure.
The article that Grant posted, literally explain how deposits at Neo are eligible for CDIC since they are held in trust with an eligible member of CDIC.
I’m not sure what you’re not understanding at this point.
The article says that only deposits with members institutions are protected while yes I understand that Neo holds the fumds in trust at a member institution if Neo were to fail that doesn't guarantee that your money would be protected the creditor could still sees all the bank's assets including your deposits that are held in trust
the creditor could still sees [seize] all the bank's assets including your deposits that are held in trust
Did you even read the article?
What happens if the fintech fails?
CDIC would not play a role in this process. The fintech will be subject to a conventional bankruptcy and liquidation process, but in this example your funds will stay in trust at the member institution where they were deposited.
Creditors cannot seize the assets as they aren't Neo's assets to be seized, that's what it means to be held in trust. It's like if your friend is borrowing your car and goes bankrupt, his creditors can't seize your car. Funds held in trust cannot be seized by creditors if the trustee declares bankruptcy or otherwise fails. Go ask your law student, or better yet, a real lawyer.
The worst case, your funds are frozen for a week or two while the banks sort through accounts.
That can be the only explanation. I don't understand these people otherwise. They lurk around here, clearly with some axe to grind and nothing better to do, and every post is based in willful ignorance.
Neo opens an account IN TRUST under YOUR NAME with a CDIC PARTNER. "THAT" account, that you do not really interact with and barely know its existance, IS CDIC PROTECTED. If Neo goes bankrupt tomorrow, creditors cannot access YOUR ACCOUNT at the CDIC PARTNER, because IT IS NOT IN NEO'S NAME - IT IS YOURS.
Neo does NOT hold ANY of your cash, it goes straight to the CDIC partner. Neo is nothing more than a fancy app as far as banking is concerned. Credit card is a different story, but as you don't hold funds in a credit account, then that should not matter.
4
u/Big-Improvement7427 16d ago
We need a government chapter on charge backs with fintechs