'BIG BROTHER BANK' COMING TO A NEIGHBORHOOD NEAR YOU, LIBERTARIANS WARN

LOS ANGELES, Dec. 21 /PRNewswire/ -- Banks will serve as the eyes and ears
of the government if a recently published federal proposal is enacted, the
Libertarian Party of California warned today.

Published in the December 7th Federal Register, the proposed regulations --
deceptively dubbed "Know Your Customer" -- would require private banks to
monitor their customers' transactions and report any "suspicious" activity
to the federal government.

"'Know Your Customer' is a euphemism for 'Watch, Monitor, and Suspect All
Customers,'" announced Libertarian state chair Mark Hinkle. "The plan is a
stunning violation of personal privacy -- not to mention the Fourth
Amendment guarantee against unreasonable search and seizure."

In addition to the Constitutional and privacy issues, the Libertarian Party
finds the proposed regulations problematic because:

(1) Banks already face a mountain of cumbersome reporting requirements. For
example, banks are required to file Currency Transaction Reports for any
customer who makes a transaction of $10,000 or more. "With the additional
burden of a 'Know Your Customer' program, banks would have to expend
substantial, valuable time and resources on monitoring every single
transaction that takes place," noted Hinkle. "The government is drowning
private banks in a sea of unconstitutional, unfair, and unnecessary
regulations."

(2) The regulations add another element to the war on drugs.

Regulators claim the plan is needed to "combat illicit activities." But as
author James Bovard wrote in a recent Investor's Business Daily editorial,
"These new regs are largely a result of the failure of money-laundering
laws to curb the flow of drugs," and would create "broad new classes of
criminals who have nothing to do with narcotics trafficking."

(3) Bank customers would be guilty until proven innocent.

"Anyone who comes into a large sum of cash -- such as a widow receiving an
inheritance or an employee awarded a bonus -- would have to prove the
legitimacy of the source of funds or risk coming under suspicion,"
predicted Hinkle. "Such suspicion flies in the face of a free society."

The regulations were simultaneously proposed by the Federal Reserve System,
the Federal Deposit Insurance Corporation, the Treasury's Office of the
Comptroller of the Currency, and the Treasury's Office of Thrift
Supervision. All are accepting public comment on the regulations until
March 8, 1999.

Banks and privacy groups are stepping forward to oppose the plan. The
California Bankers Association has drafted an opposition letter, and the
ACLU, the Free Congress Foundation, and the Electronic Privacy Information
Center are mobilizing to fight the proposal.

"Add the Libertarian Party of California to that list," declared Hinkle.
"Banking customers should be free to conduct business in private without
worrying that 'Big Brother' is watching. We urge all Californians to
express their outrage to the morally bankrupt regulators in Washington and
send a clear message: 'Leave us alone.' Or better yet, voters should start
a new program for bureaucrats: 'Know Your Constitution.'"

Checked-by: Richard Lake