I have no way to verify this but maybe someone out there knows about it? I just happen to read this in one of our audiogons' seller ad. Word of advice needed as I use Paypal a lot.
Well if they are in trouble they have enough funds to cover a LOT of legal fees(you know those lawyers are brutal ;) it seems rediculious what they get to do transactions sometimes- such is life!! ~Tim
My state Louisiana is reportedly taking them to court for operating as an unregulated bank. I remember seeing it in the news but have not heard anything further. I think other states have taken legal action as well.
PayPal has FDIC insurance on your cash balance, even though FDIC does not think they are a bank. They merged with X.COM a couple years ago. X.COM was a real bank, so the money must be held there. New York banking regulators have aleady ruled that PayPal is not operating an illegal bank. The dangers of being a new format I guess. See this article:
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