Congress Must Strengthen Financial Privacy Laws, ACLU Says
FOR IMMEDIATE RELEASE
WASHINGTON — A controversial proposal to monitor bank customers, which has raised the ire of groups as diverse as the American Civil Liberties Union, the Free Congress Foundation, the Eagle Forum, and the Consumers Union, received further criticism at a subcommittee of the House Judiciary Committee today. The ACLU urged Congress to stop the regulations and to enact legislation that would protect financial privacy.
The “Know Your Customer” proposal would require banks to create profiles of all their customers and monitor all of a customer’s transactions to determine if any are unusual and therefore “suspicious.” Those transactions would then be reported to the federal government. The regulations would vastly expand current bank reporting practices.
“The ‘Know Your Customer’ regulations assume that every bank customer is guilty until proven innocent,” said Gregory T. Nojeim, a legislative counsel for the ACLU, who testified before the committee. “If these regulations are adopted, a fifth grader establishing a savings account for her allowance will have to worry that a generous cash gift from her grandparents may bring federal agents to her door.”
Since the regulations were proposed last December, more than 100,000 people have written to the FDIC to register their anger.
“Simply rejecting the ‘Know Your Customer’ proposal without strengthening the weak financial privacy laws that allowed its creation would be a cruel hoax to the over 100,000 Americans who have demanded that their bank transactions be kept private,” Nojeim said. “When it comes to financial privacy, the buck stops with Congress.”
Nojeim explained that beginning in 1970 Congress authorized the Treasury Department to require banks to spy on their customers. Nojeim said that Congress must either strengthen the Right to Financial Privacy Act or repeal or substantially modify the Bank Secrecy Act, under which “Know Your Customer” was proposed.
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