In an earlier thread, "Know Your Customer" was mentioned briefly. Is that still a threat? Has anyone heard anything about this awful thing? I suppose this can be done by executive fiat or at the department level. Knowing whether it will be implemented in March could (should) have a decided effect on preparation plans.

-- Vic (Roadrunner@compliant.com), February 10, 1999

Answers

Last week a local paper ran an article saying that the FDIC got so many protests, that they were going to hold off and reconsider the whole idea.

-- curtis schalek (schale1@ibm.net), February 10, 1999.

According to American Banker magazine, they are back to the drawing table. The head of the FDIC wants revisions making it less intrusive on privacy and less costly to implement. I've read in local newspapers that local and national banks everywhere are extremely against the policy for 2 reasons: (1) It's too expensive to implement and maintain, and (2) They do not want to be put in a confrontational position with customers. They thrive by attracting customers, not chasing them away.

-- David Bowerman (David@BankPacman.com), February 10, 1999.

Because of heated protests both by bankers and private citizens, the KYC policy as originally presented is dead. A revised version will likely be put out for comment later this year, but the furor over KYC was probably enough to get it postponed until it will no longer be an issue.

-- Nabi Davidson (nabi7@yahoo.com), February 10, 1999.

Saw a program about it last night. The issue is not dead yet... They are still considering it. So far they have received 11,000 letters and correspondence from enraged citizen. They will listen until March 8th before making a decision...

Here is an email I got about it...

* Immediate action required! Contact the FDIC

BAD NEWS: There is slightly over one month left until the public comment period expires on the FDIC's proposed "Know Your Customer" regulation, which would require banks to spy on their customers for thefederal government.

GOOD NEWS: The Libertarian Party's all-out effort to kill thisoutrageous proposal by flooding the FDIC with letters, faxes, ande-mails is rapidly picking up steam -- and we need your help to finishthe job.

What is the Know Your Customer proposal, and how can you helpabolish it?

Know Your Customer is a Federal Deposit Insurance Corporation(FDIC) proposal that would require banks and other financialinstitutions to develop customer profiles, monitor their customers'accounts, and report any "unusual transactions" to federal law enforcement agencies like the DEA or the IRS.

The government claims it is trying to thwart money launderers anddrug dealers. But what this law would really do is turn every bankteller into a government informer and every American with a bankaccount into a criminal suspect -- and that's why Libertarians are fighting this law.

More specifically, the Know Your Customer proposal, as published in the December 7, 1998, Federal Register, requires that banks:

* Determine their customer's sources of funds * Determine their customer's "normal and expected" transactions.

* Monitor customer transactions and identify transactions that are inconsistent with normal and expected transactions.

* Report any "suspicious activity" to federal investigators.

This policy is scheduled to go into effect on April 1, 2000, unless we can put enough pressure on the FDIC to kill it. The FDIC is taking public comments on this issue until March 8 -- which gives usjust over one month to make it clear that the American public will not accept this outrageous regulation.

In order to achieve that, the Libertarian Party has joined a coalition to repeal the proposal along with the ACLU, the Free Congress Foundation, the California Bankers Association, and other privacy groups. Already, our efforts are paying off:

* On January 8, the national Libertarian Party issued a pressrelease denouncing the scheme as "the ultimate invasion of your financial privacy," and response from the media has been overwhelming: LP spokespeople have been scheduled for 25 broadcast interviews heard on a total of 356 stations, and interview requests continue to roll in.

* Even Congress is paying attention: On January 11, while an LP spokesman was being interviewed on radio station WJBO in Baton Rouge, Louisiana, Congressman Richard Baker become so alarmed by the angry calls that he called in and tried to do a little damage control! Baker, a senior Republican on the House Banking Committee, pledged to hold hearings on repealing the Know Your Customer program.

* Best of all, the FDIC has already been flooded with over 11,000 letters, faxes, and e-mails protesting the plan!

Public opposition to the plan is growing so quickly that the FDIC is starting to retreat on its position. It has now announced that the plan could be "substantially revised."

That's where you come in. Libertarians don't want this "Spy on Your Customer" program watered down, revised, or reformed; we want it repealed!

With your help, we can immediately DOUBLE the number of public comments the FDIC has received. How? By hitting the FDIC with an avalanche of 11,000 more letters, faxes, and e-mails -- which might be enough to bury this proposal once and for all.

That's right: If each of the 11,000-plus subscribers to the Libertarian Party's e-mail list fired off a comment to the FDIC right now, we could immediately double the number of public commentsreceived, putting tremendous pressure on the agency to rescind this plan.

And if everyone forwarded this e-mail to just one friend who is concerned about financial privacy, we could triple the number ofcomments, and so on.

HOW TO CONTACT THE FDIC:

* E-mail: comments@FDIC.gov

* Write: Robert E. Feldman, Executive Secretary, Federal Deposit Insurance Corporation, 550 17th Street, NW, Washington DC 20429 * Fax: (202) 898-3838

WHAT TO SAY:

First, state in simple and unambiguous language that you are opposed to the Know Your Customer regulation, and want it repealed.

Then, make some or all of the following points:

* In a free society, the government has no business even asking where you get your money or how you spend it -- and politicians certainly have no right to force your bank to monitor your account.This is the kind of thing you might have expected of the government of East Germany, China, or North Korea, but not in the U.S.A.

* The Know Your Customer regulation amounts to an illegal, warrantless search that violates the Fourth Amendment. Monitoring every bank account to check for laundered money is no different from pulling over every driver just in case some are intoxicated, or searching every home to check for stolen goods. It is unconstitutional -- plain and simple.

* The Know Your Customer regulation could subject your money to asset forfeiture. Asset forfeiture laws allow police to seize your car, your cash, and even your home without having to charge you with a crime -- and force you to go to court to get it back. Instead of being the safest place to store your money, banks could become the most dangerous place -- since Uncle Sam's bank robbers can seize it at will.

* Like asset forfeiture laws and fingerprints on drivers licenses, the Know Your Customer regulation is another Prove-You're-Not-A- Criminal law. In America, we're supposed to be innocent until proven guilty -- not the other way around.

* Most important, the Know Your Customer regulation cannot bereformed; it should be repealed! TIPS: Here are a few suggestions to make your efforts as effective as possible:

* Include your name and address; anonymous messages may be ignored.

* Be polite. Threats, abuse, and offensive language will cause your message to be disregarded. * Put the above points in your own words. The FDIC is receiving hundreds of form letters, faxes, and e-mails every day, so make yours look personal

* Be brief. Keep faxes and letters to one page, and e-mails to a few hundred words.

* Hurry! With the deadline just slightly over one month away, we need to pressure the FDIC bureaucrats now. Let's see if Libertarians working together can cause an "e-mail avalanche" - and a flood of letters and faxes -- at the FDIC!

Is there anything else you can do?

Yes: Pass this Action Item on to a friend or relative and ask them to contact the FDIC, too.

-- STFrancis (STFrancis@heaven.com), February 10, 1999.

I am proud to announce that all the banks in my area ran a Full Page ad denouncing the "FDIC Know Your Customer" proposal. First it explains what it is, and then says: " In other words, the government wants uf to monitor your transactions to see where your money is coming from, to whom you are writing checks and then report any "suspicious activity" to the Federal Crimes Enforcement Network."

I was/am impressed. One banker candidly told me, "It's none of their busines." Isn't this great?

-- gilda jessie (jess@listbot.com), February 11, 1999.

This UK tech news site claims the embedded serial numbers in Intel's PIII (and subsequent series) processors were developed to assist implementing the "Know Your Customer" plan.

http://www.theregister.co.uk/990210-000005.html

It will probably resurface in some other form at some other time. The collective public memory is short.

-- PNG (png@gol.com), February 11, 1999.