"Know Your Customer Update" #2

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"Know Your Customer Update" #2

Date: Wed, 17 Mar 1999 08:43:43 -0800 (PST)

From: List Manager



1) 171,268 sign online petition against Know Your Customer!

2) Know Your Customer is wounded - but is it really dead?

3) Will the real "Know Your Customer" repeal legislation please stand up!

4) More cosponsors for HR 516: "The Know Your Customer Sunset Act"

5) Quote of the week


Here's what's going on with the FDIC's proposed "Know Your Customer" regulation:

1) 171,268 signed online petition against Know Your Customer!

The FDIC received over 250,000 letters, e-mail messages, and faxes during its public comment period, which ended on March 8. Of those, 171,268 were generated by the online petition at http://www.DefendYourPrivacy.com! This represents over 67% of all the comments received by the FDIC! Thank you for your help in this vital fight for personal privacy.

The success of this cyber-campaign has been noted in articles in Wired, World Net Daily, and the New York Times. Visit the media page at http://www.DefendYourPrivacy.com for links to these and other articles about the campaign and Know Your Customer.

2) Know Your Customer is wounded - but is it really dead?

On March 8, the head of the FDIC announced that "the public has spoken very loudly and clearly." Chairwoman Donna Tanoue said that she will urge the FDIC's board to drop the controversial rule at their next meeting, scheduled for March 23.

However, only two of the four agencies that originally sponsored Know Your Customer have said that the regulation should be scraped. While both the FDIC and the Comptroller of the Currency have spoken against the regulation, neither the Office of Thrift Supervision nor the Federal Reserve has taken a public position. All four agencies had proposed nearly identical versions of Know Your Customer regulations.

In addition, an FDIC spokesman had stated previously that the agency might withdraw the regulation, but implement Know Your Customer-style requirements as a "policy" instead. That's why it's too soon to claim the rule is DOA. Even if the FDIC decides to kill it, which hasn't happened yet, the same bureaucrats who first proposed this dangerous regulation could quietly bring it back after the public outcry has subsided.

3) Will the real "Know Your Customer" repeal legislation please stand up!

In the wake of the public outcry against Know Your Customer, it seems like everyone in Congress is leaping forward to claim credit for killing it. But, how many of these repeal efforts actually accomplished anything?

In the House Banking Committee, Rep. Ron Paul (R-TX) sponsored amendment 8 to HR 10 that would have prohibited the FDIC from implementing any form of Know Your Customer regulation. Rep. Bob Barr (R-GA) and Richard Baker (R-AL) introduced a much weaker substitute amendment that ultimately passed the committee. The Barr-Baker amendment would block the current Know Your Customer proposal, but leave the door open for similar proposals in the future. Barr spoke against the tougher version in committee. The bill still has to be approved by the full House and Senate, and be signed by the President, before becoming law.

The U.S. Senate voted 88-0 to ask the FDIC to withdraw its proposed Know Your Customer rule. While symbolically important, the resolution lacks the force of law, and doesn't repeal the authority of the FDIC and other financial institutions to impose Know Your Customer regulations.

Thus far, HR 516, introduced by Rep. Paul, is the only bill that would immediately terminate all Know Your Customer regulations, and prevent any similar regulation in the future.

4) More cosponsors for HR 516: "The Know Your Customer Sunset Act"

Support for HR 516, "The Know Your Customer Sunset Act", is bipartisan and growing rapidly. The bill now has 47 cosponsors, including influential members like Majority Whip Tom Delay and Judiciary Committee Chairman Henry Hyde. Information on HR 516, including a complete list of cosponsors, is now available at http://www.DefendYourPrivacy.com. We also plan to begin a new petition campaign to build support for legislation to permanently stop Know Your Customer. In the meantime, contact your local Congressman and ask him to cosponsor HR 516.

The office of Rep. Paul will host a Congressional staff briefing ("Should We Require Banks to Spy on Their Customers?") on Friday, March 19th.

5) Quote of the week - By Joseph Farah, World Net Daily

"While the unanimous vote by the Senate and the likely withdrawal of the "Know Your Customer" proposal at the FDIC are developments worth cheering about, they will represent nothing more than temporary victories for freedom and constitutional rights. The government will be back. There will be new attempts to find out how you are spending the small amount of money your "public servants" permit you to keep. When you least expect it, they will be back in your pocket and snooping in your private affairs once again."


DefendYourPrivacy.com is provided as a public service by the Libertarian Party.

To request information about the Libertarian Party, please visit http://www.lp.org/lp-membership-iform.html?

To support this project financially, please visit http://www.lp.org/lp-kyc-contrib.html

To join the Libertarian Party please visit http://www.lp.org/lp-membership.html

-- a (a@a.a), March 17, 1999


This is something that we cannot afford to let slip through. If we don't keep up the pressure permanently, the government will be back. Again and again and again and again, until they wear us down. . .

-- Hardliner (searcher@internet.com), March 17, 1999.

Clinotn and His loyal Senate Democrats stated they would publicly vote against (oppose by filibuster) any legislation that would actually prohibiting the "Know Your Customer Plan".

They would, however, be willing to jump on the bandwagon and support the "verbal" resolution -which as pointed out, has no authority and is meaningless.

More troubling, the actual policy makers and "bureacrats" inside the FDIC and the agencies believe they are still "right" - that the public is "wrong" about wanting its privacy, and that this or an equal bill is "needed" and "must" be passed sooner or later.

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), March 17, 1999.

Look for this measure to get included in Clinton's "bank holiday" Executive Order late this year when he restricts the amount of cash that can be withdrawn by a person - obviously, each bank will have to track who has withdrawn what amount of cash ......

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), March 17, 1999.

I have news for you, the FDIC's examination procedures have included procedures to examine a bank's "Know Your Customer" program for at least the past couple of years and it will NOT be removed. Even though there has been no regulation to require such a program, Saftey and Soundness examiners will hammer a bank for not having such a program as an unsafe and unsound fraud prevention program. Even without the KYC regulation, we will continue to be required, by examiners, to monitor "suspicious" activity and make certain reports of your activity. I'm not saying its right, I'm just letting you know that the defeat of this proposal really means little. KYC is alive and well in the banking industry (like it or not).

-- banker (banker@abank.somewhere), March 18, 1999.

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