[107323] in Cypherpunks
SNET: Banks tell IRS your changes in earning/buying habits & track you by cellular use
daemon@ATHENA.MIT.EDU (Vladimir Z. Nuri)
Sun Jan 10 21:56:35 1999
To: cypherpunks@cyberpass.net
Date: Sun, 10 Jan 99 18:48:39 -0800
From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Reply-To: "Vladimir Z. Nuri" <vznuri@netcom.com>
From: USCMike1@aol.com
Subject: SNET: Banks tell IRS your changes in earning/buying habits & track you by cellular use
Date: Mon, 4 Jan 1999 03:54:59 EST
To: SRNienow@aol.com, gitchieg@hotmail.com
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USCMike1
Thanks to gitchieg@hotmail.com, SRNienow@aol.com, and Schlafly for this post
From: eagleflt@bignet.net (EAGLEFLIGHT ----- David E. Rydel)
From: "gitchie goomie" <gitchieg@hotmail.com>
>Date: Thu, 31 Dec 1998 09:09:45 PST
>From: SRNienow@aol.com
>Date: Thu, 31 Dec 1998 11:44:47 EST
>Subject: Monitoring law abiding citizens
>
>There is a similar "know your customer" requirement for other types of
>financial institutions as well, imposed by the SEC and/or NASD (I forget
which).
>
> Monitoring Law-Abiding Americans
>
>December 30, 1998 by: Phyllis Schlafly
>
>Hiding behind the unprecedented headlines of the last few weeks,
>"Big Brother" government has been steadily expanding its
>encroachments on our personal privacy. What we thought was one of
>the most benign and beloved of federal agencies, the Federal Deposit
>Insurance Corporation (FDIC), proposed a revolutionary regulation
>called "Know Your Customer."
>
>The proposed FDIC regulation would require each bank to do the
>following: determine the identity of all its customers, determine each
>customer's sources of funds; determine each customer's normal and
>expected bank transactions; monitor the activity of each account,
>looking for deposits and withdrawals that are inconsistent with the
>expected pattern of financial transactions; and report any
>transactions that someone might call "suspicious."
>
>Wow! Did you think that freedom in America includes the freedom to
>manage your own money without the government looking over your
>shoulder? Well, think again.
>
>"Know Your Customer" will enter a profile of all your financial
>transactions on the bank's database. The bank will maintain a
>computer record of the amounts you normally deposit each month
>and the sources of the money (e.g., your weekly paycheck, your
>Social Security, your stock dividends) and the amounts you normally
>withdraw each month (e.g., rent or mortgage, automobile payment,
>food, utilities, credit card payment, cash for pocket money).
>
>Then, if you deviate significantly from this pattern (such as by earning
>some extra money or buying or selling a car), your once-friendly bank
>will report the "inconsistent" transactions to a federal database.
>
>The bureaucracy's moniker for Know Your Customer is the Minimum
>Security Devices and Procedures and Bank Secrecy Act Compliance
>Program. The proposed regulations will authorize federal agents to
>inspect "all information and documentation" of accounts.
>
>Some banks have already created a Know Your Customer policy.
>The Terre Haute Savings Bank publishes a long list of banking
>"activities that are suspicious in nature," including: "Customer is
>reluctant to provide any information requested for proper
>identification.
>. . . Traffic patterns of a customer change in the safe-deposit area. .
>.
>. Increased wire activity when previously there has been no regular
>wire activity. . . . Borrower pays down a large problem loan suddenly,
>with no reasonable explanation of the source of funds."
>
>The government pretends that this extraordinary surveillance is
>necessary to detect money laundering by drug kingpins. In fact, the
>government averages less than 100 money laundering convictions per
>year, few of which even involve drug kingpins.
>
>When this regulation was announced during the second week of
>December, it attracted almost 3,000 complaints in the first three
>days. A spokesman for the California Bankers Association, John
>Stafford, charged that it is both intrusive and cumbersome, and that
>Know Your Customer really means "Invade your customers' privacy."
>
>John Ehrensperger of Atlanta's Sun Trust Bank commented, "It turns
>us into surveillance agents for the government." Most banks,
>however, haven't spoken out because they will just pass the costs
>along to their depositors, and they are comfortable with the federal
>law that immunizes them from liability when disclosing allegedly
>suspicious customer activities to the government.
>
>Current law already requires banks to report to the government cash
>transactions exceeding $10,000. The bank must complete a five-page
>report that includes the customer's name, address, Social Security
>number, driver's license or passport number, date of birth, and
>information about the transaction.
>
>The banks send this information to the Suspicious Activity Reporting
>System, a huge searchable database that went on line in Detroit in
>April 1996 and is jointly administered by the IRS and FinCEN. This
>database shares its secrets with more than a dozen agencies,
>including the FBI, IRS, Secret Service, bank regulators, and state law
>enforcement.
>
>Federal Government surveillance is also curtailing personal privacy on
>another front. The Federal Communications Commission (FCC) is
>trying to turn all wireless phones into personal tracking devices so
>that, if you use a cell phone, the government will always know where
>you are.
>
>When Congress passed the Communications Assistance for Law
>Enforcement Act (CALEA) in 1994, it was clearly understood, and
>FBI Director Louis Freeh confirmed in his testimony, that the statute
>does not include any power to "disclose the general location of a
>mobile facility or service." The FCC is now trying to rewrite the
>statute by a regulation, issued October 22, that would require cellular
>and other wireless phone companies to track the location of their
>customers, identifying the cell site at the beginning and end of every
>call.
>
>Fifty million Americans now carry cellular phones and have made
>them part of their daily lives. If this FCC regulation is allowed to go
>into effect, the federal busybodies will have the power to monitor our
>movements, our associations, and our activities.
>
>This is one more tentacle of the Clinton Administration's plan to
>monitor the daily business of law-abiding private citizens and treat us
>all as if we are criminals. It's completely phony for the Clintonites to
>complain about the "poisonous politics" of spying on public officials'
>misbehavior when the Administration has a comprehensive plan to
>spy on private citizens' whereabouts and money.
>
> Phyllis Schlafly column 12-30-98
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