"Big Bank is watching." That's the message the Federal Deposit Insurance Corporation, the Internal Revenue Service and an
endless stream of federal government agencies are sending under proposed new regulations expected to be implemented within the
next year.
This massive new program -- euphemistically called "Know Your Customer" -- would convert our nation's banks into wholly owned
subsidiaries of the government-wide movement to invade every aspect of Americans' privacy.
The end-effect of the new regulations will be that law-abiding American citizens will be spending more of their time trying to prove
themselves innocent of unnamed crimes before federal agents. For example, an individual decides to sell his car through a classified
ad in the newspaper, and quickly finds a buyer, who hands over the cash. Now, our happy car-seller is still shopping around for the
vehicle he wants, so he wisely deposits the large cash into his account. Unfortunately, that simple act could trigger an alarm within
the bank's computers, alerting to the fact that this customer never makes such large deposits. The bank will be required to notify a
host of federal agencies, which will likely dispatch agents to question the man, assuming he must be a drug dealer, arms smuggler
or terrorist.
Sound loony? It is. But that is precisely what will be imposed on banks if these new regulations take effect.
Under these regulations, banks will be required to first create a profile of all new and current customers. The profile will include such
information as their credit history and other standard financial reviews, but will be expanded to include the customer's deposit and
withdrawal habits. This information will be gathered over the first few months of the account's creation. After that, any account
activity that deviates from the profile will be considered suspicious behavior.
Not only will "unusual" deposits into your account trigger suspicion, but so too might large cash withdrawals. Let us return to our
friend selling the car. Instead of selling his car, though, let us say he saved $100 each month for two years, so that he could by his
teenage daughter a used car. On the teen's birthday, so Dad goes heads off to by a vehicle, first stopping at the bank to withdraw
the $2,400 he had carefully saved. Again, such an action would likely put this man in the position of having to defend himself against
charges of buying drugs, laundering money, tax evasion or some other crime.
The government regulators defend the new rules, saying that such measures are needed to "combat illicit activities."
But at the expense of law-abiding citizen's privacy? And with the resources of private institutions? While such egregious violations of
individual rights are common in totalitarian regimes (Hitler's National Socialists elevated such abuses to a perverse art), they cannot
be tolerated in a free society. The regulators say these new banking rules are required under existing banking laws. If that is the
case, I will gladly relieve them of that burden by introducing, at the beginning of the 106th Congress in January, legislation to repeal
those laws. Somehow, though, I imagine such action will not stop them, only slow them down.
That an innocent man may be presumed guilty lest he prove himself otherwise is a concept embraced more and more by our
government regulators and lawmakers, though in absolute conflict with our national legal tradition.
Despite the warm and fuzzy name, the federal regulators are not interested in the banks "getting to know their customers." Their
only interest is in monitoring and controlling every aspect of life, so they can create the illusion of phantom crimes, and therefore
justify their existence. With complex laws and unimaginably obscure regulations, the cards are stacked against everyone, ensuring
that at any moment, the IRS or other agency can nail anyone for something.
In a society founded in freedom and liberty, individuals must be allowed to engage in life without fear of their actions being monitored
and misinterpreted by zealous government agents. Sadly, that is not the burgeoning legacy of the 20th Century. Big government, big
banks, big? everything is watching and waiting. |
