[Politech] Financial privacy, Bank Secrecy Act, and laws mandating snooping [priv]

From: Declan McCullagh (declan@private)
Date: Wed Oct 12 2005 - 14:20:54 PDT

Let's not let the banks slide, as Ethan correctly advises. Still, it 
seems to me that there's a big difference between (a) one bank teller 
who asks inappropriate questions (and may be a clueless new hire and 
even violating bank policy by doing so) and (b) a concerted, savvy, and 
effective attempt by federal politicians and Fed/Treasury/FinCen to 
eviscerate the Fourth Amendment and rid us of financial privacy over a 
course of many decades. It's not really fair to equate the two (not that 
Ethan does, but others might be tempted).

Previous Politech messages:


-------- Original Message --------
Subject: RE: [Politech] Why bank snooping: DO blame the federal 
government - but don't let banks slide either...[priv]
Date: Wed, 12 Oct 2005 01:19:56 -0400
From: Ethan Ackerman <eackerma@private>
Reply-To: <eackerma@private>
To: Declan McCullagh <declan@private>
CC: Jim Harper <jharper@private>

Greetings Declan,
I thought it might be useful to 1)amplify and 2)clarify Jim's response to
the banks behaving badly, as several things are WORSE than he indicated.

1)Jim mentioned foreign currency reporting, but to amplify just how invasive
things are, here in the US with just US currency, FDIC regs. still require
filing suspicious activity reports - in some cases for as little as $5000 -
for as flimsy a standard as:
"if the bank knows, suspects, or has reason to suspect...The transaction ...
is not the sort of transaction in which the particular customer would
normally be expected to engage..."
12 C.F.R.  353.3(a)4  at

Banks HAVE to report this type of thing, or they face disciplinary
proceedings and sanctions, and not just hypothetical ones - this does happen
often: See

In addition to this forced "tattling" on customers, federal regulations
REQUIRE that banks invasively collect and retain information on customers
(and keep it available for federal investigators, though not necessarily
report it) for such menial transactions as a $3000 cashiers check -
information like: "(A)  The name and address; ...social security
number...alien immigrant identification number...date of birth ...date of
purchase; ...type(s) of instrument(s) purchased; ...The serial number(s) of
the instrument(s) purchased; and [T]he amount in dollars of each of the
instrument(s) purchased;
31 C.F.R.  103.29(a)2(i) - at

(While many are sloppy in their own right, is there any wonder why banks
lead the news in incidents of data leaks?)

2)To clarify Jim's post and Serge's experience  - these invasive and (I
agree with Jim here but the courts often don't) unconstitutional rules don't
directly or even implicitly permit banks to withhold customer deposits -
this is BAD banking practice.  These reporting rules obviously lean heavily
on banks to ask snoopy questions and generally over-collect private info,
but NOT to withhold funds.  State & federal depository & credit laws and a
bank's terms of service govern when banks can withhold money, and if banks
arbitrarily do so for other reasons, they may be liable to suit.   This is
the "patriot act effect(*)" and should be resisted at every opportunity -
use the power of your purse to take your banking elsewhere.

(*) the "patriot act effect" describes the tendency of anyone with some
element of authority to cite onerous govt. rules as a justification for
everything, from TSA groping grandma to landlords denying apartments to
Muslims - "...because its in the Patriot Act."


-------- Original Message --------
Subject: Re: [Politech] Banks want to know why you want your money, 
"know their customer" all too well [priv]
Date: Tue, 11 Oct 2005 14:33:02 -0400
From: Stephen Cobb, CISSP <scobb@private>
To: Declan McCullagh <declan@private>
References: <434BDEFC.4000609@private>


This sounds like profiling, pure and simple, probably local, possibly
illegal. I've never encountered anything like this and I happen to have
needed numerous cashier's checks this year, for a variety of purchases. I
obtained them from several different banks here in Florida (including
several different B of A branches) and nobody has asked me anything about
source of funds (apart from which account I wanted to fund the checks) or
the purpose (and some of the amounts were high five figures).

However, bear in mind that I am a MAWG (Middle-Aged White Guy). Not that I
chose or aspired to be one, it just happened. And in recent years I have
often observed MAWGs, even scruffy ones like me, being treated differently
from non-MAWGs. I'm not saying this is right or fair or anything. It just
seems to be a fact of life in our society, whether it is banking, traffic
cops, or salespersons in certain retail establishments.

I totally agree with Serge that the questions he was asked were
inappropriate. And I'd be surprised if they were 'legal.' I suggest
checking out other banks and asking, before opening an account, how they
would handle such transactions. If the bank gives the 'right' answer, I
would move my accounts there.


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