So you thought your money was safe and your bank account private
after the Federal Deposit Insurance Corp.’s “Know Your Customer”
regulations went down in flames, huh?

Fooled you! Eve Gerber of Slate Magazine reports
that even after
Congress summarily rejected the FDIC’s bank snooping plans, many of the
provisions of “Know Your Customer” are in effect — just as they were
before the measure was even proposed.

  • By law, she reports, all U.S. banks report currency transactions
    greater than $10,000 — a total of up to 12 million such transactions
    are reported annually;

  • Banks all report transactions greater than $5,000 whenever they have
    reason to believe the information is “relevant to a possible violation
    of law or regulation” — a total of about 50,000 of those reports are
    filed each year;

  • These unverified, unsubstantiated reports are then compiled by the
    Financial Crimes Enforcement Network and disseminated to 59 government
    agencies and to all U.S. attorneys;

  • The database is routinely accessed by law enforcement authorities;

  • Banks are forced to comply with government demands for information on
    customers but are prohibited from even notifying customers that intimate
    details of their financial histories are being disclosed to government
    bureaucrats and police;

Gerber’s report also states that more than 85 percent of U.S. banks
currently maintain “Know Your Customer” programs. Why? The Fed’s Bank
Secrecy Act Examination Manual mandates such draconian measures. Those
institutions failing to heed the warnings are subject to cease and
desist orders.

So what was all the hullabaloo over “Know Your Customer”? Why did the
U.S. Senate vote 88-0 against a plan very similar to others Congress had
already mandated?

The answers to those questions are actually quite encouraging. You
see, people fought back against “Know Your Customer.” Why did they fight
back? Because they were made aware of the threat the plan posed. They
were made aware, by the way, by a news organization curiously not
mentioned in the Slate report — WorldNetDaily, which broke the story
before any other news agency in the world

and continued regular coverage of the ensuing outrage for months to

Slate wonders out loud why so many people — 171,268 to be exact —
sent e-mail complaints to the FDIC over “Know Your Customer” if most of
the proposed rules were already in effect. It seems pretty obvious. No
one previously brought the matter to the attention of the people.
Learning about “Know Your Customer” on the Internet was a shock. It was
the first time many people had an opportunity to “just say no.” And
indeed they did, with the ease and speed of a mouse click.

What was different about this privacy protest than others? Maybe it
was the presence of a loud Internet media voice with a growing audience
of responsive and active readers.

After all, while I have all the respect in the world for the
Libertarian Party, had it ever successfully organized a potluck before
the defeat of “Know Your Customer”? Had Rep. Ron Paul, one of my
favorite members of Congress, ever before or since been recognized for
his uncanny national organizational abilities? Had the leaders of the
Christian Action Network ever been known for forging strategic alliances
with libertarians, neo-conservatives, civil rights activists and
Internet denizens?

I’m not trying to take any credit away from any of those folks for
their meaningful role in smashing “Know Your Customer.” But let’s be
real. All you have to do is scrutinize the FDIC’s own mail to see who
generated it. Let’s just say WorldNetDaily is a household epithet in the
offices of the FDIC.

But my point is bigger than my natural instinct toward
self-congratulations. It is this: The Internet has provided a new
vehicle for exposure of government fraud, corruption deceit and abuse.
Never before has there been such a potent medium — one that allows both
for quick dissemination of news and immediate response to public

Now how does that translate to eliminating 25 or 30 years of bad laws
and worse regulations? Exposure is always the first step. Rome wasn’t
built in a day, and neither was the modern-day Babylon known as the
government of the United States of America. It may need to be dismantled
brick by brick. If so, “Know Your Customer” demonstrates there’s still
some power in the press and in informed public activism.

Note: Read our discussion guidelines before commenting.