Photo Brewster Kahle in front of the Internet Archive Federal Credit Union in New Brunswick, N.J. Credit Bryan Anselm for The New York Times Brewster Kahle didn’t need to start a bank. He made a fortune building start-ups and then used his money to build the Internet Archive, a nonprofit organization trying to maintain a copy of everything published on the Internet. In 2008, though, Mr. Kahle saw how hard it was for the employees at his firm to obtain loans, and more broadly, how the existing financial system had helped contribute to the financial crisis. He thought he could do things differently, and he aimed to prove it when he began applying to open a credit union in early 2011. Since then, the credit union has faced a barrage of regulatory audits and limitations on its operations, first when it tried to work with low-income immigrants in New Jersey and especially after it looked at providing banking services to Bitcoin companies that were being rejected by other banks. Now, Mr. Kahle is giving up on his dream of creating a new kind of bank, one for social good rather than profit. He hopes to give the credit union charter to a nonprofit organization in New Jersey that can make use of it – or relinquish it. Mr. Kahle’s experience – and internal documents – provide a glimpse into how regulators approach a new technology like Bitcoin, which most banks have refused to touch, partly because of the hesitation of regulators. More broadly, the troubles faced by his Internet Archive Federal Credit Union point to how difficult it can be to try out anything new in the heavily regulated financial industry. After an 18-month application process, regulators let the Internet Archive Federal Credit Union open in 2012, but with […]
