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Email Flood Forces FDIC to Drop US Bank Plan
slambo writes "The New York Times is reporting today that a flood of emails caused the FDIC to drop a proposal for banks to monitor transactions over a long term. While it's not quite a /. effect, government is learning of the power of email - they aren't used to getting such an overwhelming response from such a wide swath of the US. (NYT requires a registration to view the article, but registration is free). "
Know Your Customer was discussed on the USTP (www.ustaxpayers.org) mailing list. Here's a blurb from the 3/5/99 mailing:
t m
Update: FDIC "Know Your Customer"
Comments to the FDIC on "Know Your Customer" rule now total over a
140,000! Law enforcement is coming out in opposition. Law enforcement
is mobilizing against KYC. An article appeared in the Peninsula Daily
News on Feb. 14th, "Bank on More Government Intrusion with FDIC rule".
Even Steve Forbes has come out opposing KYC. Read his comments at:
http://www.forbes.com/forbes/99/0308/6305031a.h
Also, the Office of the Comptroller of the Currency, one of the four
government agencies supporting KYC, announced this morning at a
Committee on the Judiciary, Subcommittee on Commerical and
Administrative Law, that it is now backing down and will not move
forward on KYC.
The support has been encouraging for the defeat of KYC, which has helped
Congressmen Ron Paul (R-TX) and Tom Campbell (R-CA). They introduced an
amendment today in the House Banking Committee to stop bank spying. The
committee has an opportunity to vote on this amendment on the markup of
HR 10 today.
The Text of the amendment states:
"(2) LIMIT ON AGENCY AUTHORITY.?No provision of this Act or any other
provision of Federal Law may be construed as requiring any insured
depository institution or any institution-affiliated party to monitor
the legality of the transaction activities or customers."
The amendment's major objective is to end the REQUIREMENT of having
banks spy on their customers. This means that it does not stop a bank
from volunteering to adhere to KYC. At the same time, law enforcement
is still permitted to obtain information with a warrant.
One of today's witnesses against KYC was Solveig Singleton - Lawyer,
Cato Institute. The following is from her testimony:
"The FDIC's "Know Your Customer" proposal is inconsistent with
declarations made by the FTC, the Commerce Department, and by Vice
President Al Gore on American's privacy rights. Government-supported
programs like "Know Your Customer" pose a unique threat to human rights,
because government alone has the power or arrest and prosecution, and to
demand asset forfeitures.
* The "Know Your Customer" proposal fosters mistrust and resentment of
government, particularly among immigrants and minorit y groups.
* The proposal sidesteps the Fourth Amendment.
* "Know Your Customer" will not make our streets or banks safer.
* "Know Your Customer" eerily recalls Communist China, where
neighborhood committees of retired communist party members reported on
their neighbors.
Abuses of information collected by government in the past show that
government will not observe safeguards intended to prevent the abuse of
the power to collect information."
Finally, the government listened to people and stopped a plan that was both silly and dangerous. If only they'd get it straight on crypto, too... Unfortunately, decisions like this one are rare - and they'll probably try to pull it off again, but sneakier, once the uproar dies down and we're done patting ourselves on the back. What, me cynical? Personally, I think for every new law or regulation they pass, governments should be forced to repeal an old one.
Number two on the oxymoron list: "We're from the government, and we're here to help"
-- Josh Turiel
"2. Do not eat iPod Shuffle."