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News (Media Awareness Project) - US DC: Legislators Argue For Banking Privacy
Title:US DC: Legislators Argue For Banking Privacy
Published On:1999-02-04
Source:Times Union (NY)
Fetched On:2008-09-06 14:08:25
LEGISLATORS ARGUE FOR BANKING PRIVACY

WASHINGTON -- Citing complaints that new rules could turn every bank
teller into a cop, some House members are proposing legislation aimed
at protecting the financial privacy of Americans.

The legislative package announced Wednesday by Republican Rep. Ron
Paul, R- Texas, would block proposed anti-money-laundering rules that
would track the habits of bank customers.

Paul said about a dozen lawmakers, including House Republican Whip Tom
DeLay of Texas, are joining him as co-sponsors of the bill to stop the
"Know Your Customer" rules. Privacy advocates, conservative groups,
ordinary people and bankers' themselves have complained that the rules
would make every bank teller responsible for doing the job of the police.

At least two federal banking agencies are reconsidering the rules in
response to the public outcry. The Federal Deposit Insurance Corp.,
for example, received more than 14,000 e-mail messages and letters
opposing the proposal as of Friday. The Office of the Comptroller of
the Currency also is looking into the situation.

"We proclaim that American citizens have the right to be free of the
snooping, spying, prying eyes of government bureaucrats," Paul told
reporters.

The proposed regulations would require banks to verify 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.

Two other measures in his package -- to repeal the Bank Secrecy Act
and to let people see files on them created by the federal Financial
Crimes Enforcement Network -- have not attracted co-sponsors, and its
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 catch drug dealers, who "are smarter than
most bankers." Paul, a physician who is on the House Banking
Committee, contends the "Know Your Customer" rules violate the Fourth
Amendment prohibition against unreasonable search and seizure.
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