Feds Kill "Know Your Customer" Regulation

greenspun.com : LUSENET : TimeBomb 2000 (Y2000) : One Thread

http://cnnfn.com/quickenonfn/banking/wires/9903/23/banks_privacy_wg/ Feds drop bank proposal

Regulators kill plan requiring banks to monitor their customers' activities

March 23, 1999: 1:43 p.m. ET

NEW YORK (Reuters) - U.S. banking regulators Tuesday dropped a controversial proposal that would have required banks to monitor their customers more closely to try to spot illegal activities like money laundering.

The proposed "Know Your Customer" rules sparked a public outcry and drew heavy fire from Congress and the banking industry, with opponents saying they would be a serious violation of personal privacy.

In a joint statement, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of the Comptroller of the Currency and the Office of Thrift Supervision said they had reevaluated the proposal and decided to withdraw it.

"The agencies received an unprecedented number of comments ... from the public, banking organizations, industry trade associations, and members of Congress," they said. "Most of the comments reflect public concern over the privacy of information that would be collected and held by financial institutions."

The proposal would have extended existing rules requiring banks to report suspicious transactions, making them set up systems to screen customers and monitor their accounts for unusual activity.

The regulators said they remained committed to the fight against money laundering, but would seek in future to reconcile this with concerns about personal privacy.

"The agencies agree that there must be an appropriate balance between these legitimate interests," they said.

The FDIC alone received over 225,000 comments on the proposal, most of them from private individuals opposed to the plan.

"I think it's the whole notion of personal privacy that so concerned consumers, and that is a lesson that everyone -- the bankers and the regulators -- should heed as we work on issues relating to privacy," FDIC Chairwoman Donna Tanoue said last week.

Spurred by the public outcry, the Senate voted March 5 to scuttle the rules, appending a provision to an education bill to prohibit the regulators from implementing them.

Bank groups also had protested the burden the rules would have imposed on them, and the American Bankers Association welcomed the decision to drop the initiative.

"We commend the regulators for withdrawing the Know Your Customer proposal today," ABA Executive Vice President Donald Ogilvie said.

"The proposal would have put banks in the untenable position of invading their customers' privacy and potentially could have eroded public confidence in the banking industry."

-- Skeptic (so@they_say.com), March 23, 1999


T'would seem to be evidence that the system works.

-- Paul Davis (davisp1953@yahoo.com), March 23, 1999.

The FDIC alone received over 225,000 comments on the proposal, most of them from private individuals opposed to the plan.

Cheers to everyone ;-)

Mr. K
***respectfully gave 2 cents too***

-- Mr. Kennedy (glad@this.result), March 23, 1999.

Yea! Ding Dong Ding Dong another toast to fellow FRLians! Of course we can't assume the death is permanent -- it will resurrect in more "pleasing" language and sneak around nosing into your & my TP stores until rolled over by rollover. So be vigilant! Does anyone think there is any privacy left when almost all stores are jumping on the "card" bandwagon? Aren't they going to tire of tabulating the tabby litter litres? Hhhhmmm, suspicious laundering, Old Git has an unusual amount of littering provisions ... snoop necessary, position a Watcher under her window, trace & track, report, analyze, write up ... we pay tax $$ for this? Hhhhhmmmmmppphhhhhfffff.

Got the windows draped, the peephole plugged, sitting under the table in the dark counting the rolls of TP, cackling, Y2K Miser, NOT !
PS kitties & rolls make a mess ;-)

xxxxxxx xxxxxxx xxxxxxx

-- Leska (allaha@earthlink.net), March 23, 1999.

As far as the feds are concerned, it's one step back in the "two steps forward, one step back" dance. They ARE NOT giving up.

The whole object of the "War on Drugs" with associated factors of "war on money laundering", currency controls (how much and in what form you can take money in and out of the country, with and without reporting requirements), asset seizure and forfeiture, etc. is CONTROL of the niggers on the federal plantation. (As far as the feds are concerned, we're ALL niggers, regardless of color.)

-- A (A@AisA.com), March 23, 1999.

The most appropriate "thank you" (an Oscar, if you will) should go to the web site: www.defendyourprivacy.com who organized the effective yet clever "democratic" process of offering all of us a simple means of notifying our CONgress(persons) and the tryranical FDIC of our concerns. Now it's time to sunset existing privacy encroaching laws such as The Bank Secrecy Act (which has nothing to do with secrecy, but represents earlier legislation legalizing bank snooping ). Next stop should be the elimination of Orwellian agencies such as FINCEN.

-- Don Chen (DChen@newbie.xxxcom), March 23, 1999.

While the Reuters story mentions the huge public outcry over KYC, here's a piece in today's NYTimes about the fact that much of the outcry was via E-Mail.

http://www.nytimes.com/library/tech/99/03/cyber/ articles/24email.html

-- pshannon (pshannon@inch.com), March 24, 1999.

Moderation questions? read the FAQ