[109113] in Cypherpunks
SNET: LP RELEASE: Know Your Customer Victory?
daemon@ATHENA.MIT.EDU (Vladimir Z. Nuri)
Wed Mar 10 20:22:10 1999
To: cypherpunks@cyberpass.net
Date: Wed, 10 Mar 99 16:33:56 -0800
From: "Vladimir Z. Nuri" <vznuri@netcom.com>
Reply-To: "Vladimir Z. Nuri" <vznuri@netcom.com>
From: Robalini@aol.com
Subject: SNET: LP RELEASE: Know Your Customer Victory?
Date: Wed, 10 Mar 1999 16:22:26 EST
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Subj: LP RELEASE: Know Your Customer Victory?
Date: Tuesday, March 09, 1999 11:57:41 PM
From: 73163.3063@compuserve.com
-----------------------------------------
NEWS FROM THE LIBERTARIAN PARTY
2600 Virginia Avenue, NW, Suite 100
Washington DC 20037
World Wide Web: www.LP.org
-----------------------------------------
For release: March 10, 1999
-----------------------------------------
For additional information:
George Getz, Press Secretary
Phone: (202) 333-0008 Ext. 222
E-Mail: 76214.3676@Compuserve.com
-----------------------------------------
Know Your Customer regulation
is wounded -- but is it dead?
WASHINGTON, DC -- A regulation that would have required banks to spy
on their customers for the federal government appears to have been squashed --
for the time being, anyway -- thanks in large part to the efforts of the
Libertarian Party.
"We have won the first round of the battle against the Know Your
Customer regulation," said Steve Dasbach, the party's national director. "But
the fight against this dangerous proposal may not be over yet."
On Monday, the head of the Federal Deposit Insurance Corporation
announced that "the public has spoken very loudly and clearly." Chairwoman
Donna Tanoue said she will urge the FDIC's four-member board to drop the
controversial rule at their next meeting on March 23.
The Know Your Customer regulation would have required banks to
determine where customers get their money, monitor bank transactions, and
report any "unusual activity" to federal law enforcement agencies.
The FDIC backed away from the proposal after being hammered by up to
253,000 e-mail messages, letters, and faxes during its public comment period,
which ended on March 8. Of those comments, 171,268 were generated by the
Libertarian Party's DefendYourPrivacy.com website.
Up and running since February 17, the site generated an astonishing
8,563 signatures a day on an electronic petition against the regulation -- or
67.7% of all the comments received by the FDIC.
"The success of our DefendYourPrivacy.com website shows that the
computer mouse is mightier than the musket, and that the World Wide Web is the
political organizing tool of the 21st Century," said Dasbach. "It also shows
that cybercitizens, when given information about threats to their privacy,
will mobilize to fight those threats and make their voices heard."
The DefendYourPrivacy.com site explained the Know Your Customer
regulation; allowed voters to send e-mail comments directly to the FDIC; and
let people automatically notify others about the site via e-mail, starting a
"chain reaction" that picked up steam as the days passed.
As the tidal wave of comments against Know Your Customer mounted,
politicians started deciding that they, too, opposed the regulation.
Last week, by an 88-0 vote, the U.S. Senate expressed "support" for a
measure directing the FDIC to drop the proposed rules. But a bill to give that
measure the force of law was blocked by Senate Democrats.
Also last week, the House Banking Committee adopted an amendment to a
financial services bill that would kill Know Your Customer. However, a broader
amendment filed by Congressman Ron Paul (R-TX) that would have prohibited any
federal agency from implementing any similar bank spying rule was defeated.
Also, only two of the four agencies that originally sponsored Know
Your Customer have said the regulation should be scrapped. 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.
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."
That's why it's too soon to authoritatively state that Know Your
Customer is DOA, said Dasbach.
"Know Your Customer is wounded, but it isn't dead yet," he said. "Even
if they decide to kill it -- which hasn't happened yet -- the same bureaucrats
and politicians who first proposed this dangerous regulation could quietly
bring it back after the public outcry has subsided."
That's why Libertarians will stay vigilant, said Dasbach -- and have a
back-up plan in place to fight Know Your Customer if and when it comes back.
"Depending on what is announced at the FDIC's March 23 meeting, we are
prepared to mount a lobbying campaign in favor of HR 516, a comprehensive
financial privacy bill sponsored by Congressman Ron Paul," he said.
HR 516 would "reign in the creeping surveillance state" by prohibiting
the FDIC and other federal agencies from implementing Know Your Customer,
would repeal other federal banking regulations, and would open up federal
financial files to the public.
"Know Your Customer is a disease that threatens our freedom. HR 516 is
the cure," said Dasbach. "The LP has already thrown a monkey-wrench into the
FDIC's plan to impose its wacky bank spying scheme. With HR 516, we have the
opportunity to kill this invasion of privacy permanently."
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