Ron Paul Dear Colleague on Know Your Customer Invading Privacy of Law-abiding Citizens
Ron Paul Dear Colleague on Know Your Customer Invading Privacy of Law-abiding Citizens
March 26, 1999
(J. Bradley Jansen was Ron Paul’s legislative staffer for these issues at the time)
“Between 1987-1996 banks filed more than 77 million Currency Transaction Reports with the U.S. Treasury. From this, 7,300 defendants where charged, but only 580 were convicted. This is less then 1/1,000 of 1%! Over 99.999% of those that had their privacy invaded were law-abiding citizens going about their own personal financial business!”
Law Enforcement Alliance of America, staff briefing March 19, 1999,
(Journal of Commerce, 10 Dec. 96, citing Dept. of Justice Report)
March 26, 1999
Dear Colleague:
The recent decision of the financial regulators to withdraw the Know Your Customer proposal should be applauded, but the informal requirement under the Federal Reserve’s Bank Secrecy Act’s compliance manual must be removed as well.
Despite the fact that banks have been required to spy on their customers since the Bank Secrecy Act of 1970 –and with 86% of banks already having a KYC policy, only 7% of responding banks are aware of any prosecution cases that resulted from their filing of CTRs [Currency Transaction Reports], or from their reporting of a suspicious currency transaction, according to a 1990 American Bankers Association member survey, “Money Laundering Deterrence and Bank Secrecy Act Research Report.”
The Independent Bankers Association of America made clear in its letter to regulators, “There has been no indication of instances when these reports have been successfully utilized in the prosecution of criminal activities…The IBAA and others have encouraged law enforcement officials to share the results of these efforts with banks, but there has been little evidence that would convince banks that their compliance with the Bank Secrecy Act is providing useful information leading to prosecution and conviction of criminals.”
Let’s not sacrifice law-abiding constituent’s privacy on a scheme that does not even initiate investigations or lead to criminal convictions.
Respectfully,
Ron Paul