MEASURE WOULD HALT 'SNOOPING' BY BANKS

Privacy advocates and bankers have complained that every teller could become
a cop.

Citing complaints that new rules could turn every bank teller into a cop, a
Texas lawmaker is proposing legislation aimed at protecting the financial
privacy of Americans.

The far-reaching legislative package unveiled Wednesday by Republican Rep.
Ron Paul would block, among other things, proposed anti-money-laundering
rules that would track the habits of bank customers.

At least two federal banking agencies are reconsidering the proposed "Know
Your Customer" rules in response to the public outcry that started in
December. The Federal Deposit Insurance Corp., for example, had received
more than 14,000 e-mail messages and letters opposing the proposal as of
Friday.

Privacy advocates, conservative groups, ordinary people and the nation's
bankers themselves have complained that the rules would transform every bank
teller into a cop.

"We proclaim that American citizens have the right to be free of the
snooping, spying, prying eyes of government bureaucrats," Paul told
reporters. He said his legislation would "give Americans the peace of mind
that comes from knowing that their every financial step is not being filed
away and viewed as potentially criminal."

Paul said about a dozen lawmakers, including House Republican Whip Tom DeLay
of Texas, had agreed to join him as co-sponsors of the bill to stop the
"Know Your Customer" rules.

But the other two measures in his package -- to repeal the Bank Secrecy Act
and to let people see the files on them created by the federal Financial
Crimes Enforcement Network -- hadn't attracted any co-sponsors, and
legislative prospects were clouded.

The Bank Secrecy Act of 1974 obligates banks to report customers' cash
transactions of $10,000 or more to law enforcement authorities. Paul said
the law has failed to help catch drug dealers, who "are smarter than most
bankers."

Paul, a physician who is on the House Banking Committee, once ran for
president as the Libertarian Party's nominee. His strict constitutionalist
beliefs routinely put him at odds with his fellow Republicans.

Paul maintains that the "Know Your Customer" rules violate the Fourth
Amendment prohibition against unreasonable search and seizure.

The proposed regulations would require banks to verify their customers'
identities, know where their money comes from and determine their normal
pattern of transactions.

The current requirements for banks to report any "suspicious" transactions
to law enforcement authorities would be expanded.