Feds Propose Even More Surveillance of Your Banking Habits
It is remarkable just how unremarkable America’s massive financial surveillance system has become to most people. Americans were rightly outraged when Edward Snowden revealed the government’s widespread spying campaigns on online communications. Yet every day, our financial transactions are subject to similar scrutiny. The programs aren’t even secret: you can read up about them on official government websites. But for some reason, we accept this surveillance as a fact of life. We shouldn’t.
If you give an agent a surveillance program, he will try to expand it. This is the case with the many legally questionable financial reporting requirements sprung forth from the Bank Secrecy Act of 1970 (BSA), which is kind of like the PATRIOT Act for money.
Most recently, the Federal Reserve and Treasury Department have proposed expanding what is called the “travel rule” to capture international funds transfers above $250. Currently, financial institutions are required to make certain reports on customers when they send international transactions in excess of $3,000. This has been the threshold since the travel rule was first adopted in the U.S. in 1996, despite inflation since then.
Here’s how it works: Let’s say someone wants to send $5,000 to someone else in the U.S. or abroad. That person goes to their bank and tells them where they’d like to send the money. The bank, by law, must collect, store, and send certain identifying data to the receiving financial institution, including the name, address, and account information for the sender and receiver. This data must be passed along intermediary financial institutions and stored for at least five years. It isn’t immediately shared with the government unless it is determined to be “suspicious” enough to trigger Suspicious Activity Report (SAR) requirements under the BSA. In other words: banks must keep this data on hand in case the government needs it.
These surveilled people are suspected of no crime, nor are they given any opportunity to opt out of this data collection. Still, the government preemptively requires that their transactions be tagged and tracked as if they had done something wrong.
The threat of government involvement is apparent. It has effectively deputized banks to keep treasure troves of transaction data on hand in case it should become useful.
But there are m
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