Document:California Press Release 21 December 1998 Big Brother Bank
- NEWS FROM THE LIBERTARIAN PARTY OF CALIFORNIA
- Office of the Executive Director
- 11956 Riverside Dr., #206
- Valley Village, CA 91607-3772
- For immediate release: December 21, 1998
- For additional information:
- Juan Ros, Executive Director
- Phone: (818) 506-0200
- Fax: (818) 506-0212
- Web: http://www.ca.lp.org/
'Big Brother Bank' coming to a neighborhood near you, Libertarians warn
LOS ANGELES - 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.'"