Afraid that a run on banks might result in a collapse of the fractional banking system. Don't worry, proposed federal regulations are being put in place to closely monitor all individual banking transactions.
The regulations would allow banks to:
 sever the relationship with the customer (including refusal
to open the account or refuse the transaction;
 block the account from withdrawals;
 possible forfeiture of the account after a certain period
of time;
Although these regulations are directed more toward money laundering schemes, they could also be used to stop a Y2K induced bank run.
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Under KYC regulations, every financial transaction will be monitored, and all banking activity will require identification. According to the proposed KYC rules, anyone who will not provide identification will not be allowed access to banking services.
The pretext for the KYC requirements is detecting illegal money transfers (money laundering) and the identification of tax evasion attempts. To accomplish the KYC objective, international cooperation is essential.
Once KYC regulations are in place, banks will be required to determine the source of customer deposits, classify them according to pre-determined "profiles," and monitor their banking activity to detect deviations from the bank's projections
The "Know Your Customer" program is international in origin. It is being promoted by the international organization known as the "Financial Action Task Force" (FATF) in compliance with international treaties. FATF has drafted reports which state that compliance with KYC requirements by member organizations (meaning both countries and banking institutions) is "voluntary." However, non-compliance will result in ostracization from the global banking community. As this concept filters down, likewise bank customers who do not "volunteer" into the KYC program will be denied access to all banking-related services.
The material that follows is taken straight from the web pages of the Financial Actions Task Force (FATF), the international organization that is forcing all U.S. banks to develop identification and monitoring systems so that the banking transactions of every American can be monitored. A link to the FATF web page is included below. (The term "member," when used in their documents, means any country that is a member of the Global-7 organization.)
In the U.S., the FDIC and the Federal Reserve Banking System are among the federal agencies currently in the process of instituting these "Know Your Customer" requirements in the form of regulations.
When the customer has not been adequately identified, various measures
can be taken by the relevant institutions:
 sever the relationship with the customer (including refusal
to open the account or refuse the transaction;
 block the account from withdrawals;
 make a suspicious transaction report;
 possible forfeiture of the account after a certain period
of time;
 keep the record of the data concerning the identification.
The above-mentioned measures can apply either separately or together.
For instance, after an account has been opened, a financial institution may
block the funds and simultaneously make a suspicious transaction report.
However, this position has been subject to criticism as incompatible with
the principle of good faith in business relations
The sanctions applicable to the institutions in cases of non compliance
with respect to customer identification are as follows:
 fines for individuals, companies and financial institutions;
 the possibility of imprisonment for individuals (members
of the board, directors, managers, employees, representatives
or other persons who permanently or occasionally render services
to them);
 disciplinary sanctions (warning, suspension of activity,
or withdrawal of agreement in most serious cases);
 rectification of any weaknesses in customer identification
as identified in the banking supervisory process;
 cease and desist, removal and prohibition and other such
actions.
Again, the above-mentioned sanctions can be applied either in
conjunction or separately. In many members, it is a criminal offence for an
institution to fail to take reasonable measures to establish the identity of
a prospective customer. Sometimes, not only the institutions but also their
employees can be punished by fines and imprisonment according to their
involvement in the offence and their position in the bank
Full implementation of KYC policies will have tremendous consequences for the way we conduct business in the future. Some of these consequences are:
IDENTIFICATION REQUIREMENTS:
 Identification will be required for all business transactions which use conventional methods of payment, i.e.: checks, credit cards, debit cards, money orders, wire transfers, and electronic transfers.
 Cash deposits and withdrawals above certain thresholds will require identification.
 Identification will be required for such things as renting safety deposit boxes, purchasing insurance, and making stock transfers.
 Customers who will not identify themselves will not be allowed to use bank services.
 New technologies using methods of "electronic identification" such as fingerprint scanners and facial recognition are encouraged.
LIMITATIONS TO BE PLACED ON CASH, GOLD:
 Cash transactions will be monitored through deposits and withdrawals.
 Electronic transactions will be logged into an information database and compared against pre-established profiles.
 Limits will be placed on the amount of cash that can be withdrawn at any given time and consecutive withdrawals may be treated cumulatively as one transaction for reporting purposes. Transactions exceeding the allowed limit will result in a "suspicious transactions" report being filed.
 Further limits to be placed on the amounts of money that can be transported across international borders - including both cash and electronic funds transfers.
 Ultimately, cash will likely be outlawed above a certain amount, and conducting private business using cash in amounts larger than the legal limit will constitute criminal activity.
 Gold acquisitions will be monitored and regulated.
MONITORING OF TRANSACTIONS:
 Bank customers will be required to reveal all sources of revenue (income). Accounts will be monitored to evaluate actual deposits compared against projections.
 Banks will establish profiles, classifications, and categorizations based on information supplied by the customer and other gathered information. All customers will be compared against the subjective classifications. Perceived anomalies in deposits or withdrawals will be reported as "suspicious activity."
 Banks are prohibited from informing customers when suspicious transaction reports have been filed on them.
 Modern "new technologies" to monitor and regulate cross-border transfers of cash will be instituted.
NEW "ELECTRONIC PAYMENTS" TECHNOLOGIES PROMOTED:
 Electronic funds transfers (i.e. smart cards, credit cards, debit cards, electronic purses, etc.) are the preferable method of payment under the Know Your Customer program because transactions can be monitored, recorded, and traced. Therefore, debit cards, smart cards, and electronic purses are encouraged for conducting business under KYC.
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Currently there are 5 bills in the House of Representatives and 1 in the Senate dealing with the KYC banking regulations.
HR 530 IH
American Financial Institutions' Privacy Act (Introduced in the House)
HR 516 IH
Know Your Customer' Sunset Act (Introduced in the House)
HR 575 IH
Know Your Customer Regulations Termination Act (Introduced in the House)
HR 621 IH
Know Your Customer Program Abolishment Act (Introduced in the House)
HR 518 IH
Bank Secrecy Sunset Act (Introduced in the House)
S 403 IS
To prohibit implementation of 'Know Your Customer' regulations by the Federal banking agencies
To see these bills, go to:
thomas.loc.gov
and enter “Know Your Customer” as the search criteria.
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