| Following tens
of thousands of consumer complaints that proposed Know Your
Customer rules would turn bank employees into government spies,
Rep. Ron Paul, R-Texas, is moving to stop the measure.
Paul, a member of the House Banking Committee,
announced his proposal Wednesday to protect people's financial
privacy. Among other things, he is blocking proposed money
laundering rules that would secretly follow the habits of
bank customers.
"American citizens have the right
to be free of the snooping, spying, prying eyes of government
bureaucrats,'' Paul said.
This action may be having a domino effect.
At least two of the federal banking agencies that are proposing
the Know Your Customer rules indicated they may follow Paul's
lead. Officials of the Federal Deposit Insurance Corp. and
the office of the U.S. Comptroller of the Currency said they
are reconsidering their proposal.
The current requirement for banks is to
report any "suspicious'' transactions to law enforcement
authorities.
Proposed regulations would go a step further
-- requiring banks to verify their customers' identities,
know where their money comes from and determine their normal
pattern of transactions. Any deviations would have to be reported.
The American Bankers Association last
week urged federal banking regulators to withdraw the proposal,
warning it could make Americans lose confidence in the banking
system and government.
About a dozen lawmakers, including Rep.
Tom DeLay, R-Texas, the Majority Whip, Government Reform Committee
Chairman Dan Burton, R-Ind., and Resources Committee chairman
Don Young, R-Alaska, have agreed to join Paul as co-sponsors
of the bill to stop Know Your Customer.
The two other measures in Paul's package
-- to repeal the Bank Secrecy Act and to let people see files
on them created by the federal Financial Crimes Enforcement
Network -- have not yet attracted any co-sponsors.
The four federal bank regulatory agencies
are seeking comments from the public through March 8.
-- Posted: Feb. 5, 1999
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