Biden’s Wrecking Ball for Financial Privacy

Sen. Mike Crapo (R-ID) denounced the Biden proposal as a “surveillance dragnet,” a “huge violation of privacy,” and “an egregious abuse of Americans’ right to due process by inferring that all US taxpayers are guilty of evading taxes until proven otherwise.” Paul Merski of the Independent Community Bankers of America warns that the Biden proposal would be “be a historic invasion of financial privacy like we’ve never seen before.” Merski also declared, “The IRS is absolutely incapable of handling or processing this massive amount of new data, and they would admit as much — that’s why they’re asking for an additional $80 billion in this budget.”

Actually, federal money cops have long been overwhelmed by too many reports from banks. Prior federal reporting requirements buried bureaucrats in useless reports and became a de facto Terrorist Hijacker Empowerment Act . The 9/11 attacks were preceded by the biggest failure ever by US financial authorities.

The Bank Secrecy Act of 1970 made it a federal crime for banks to keep secrets from the government. This law obliged banks and other financial institutions to submit a currency transaction report (CTR) to the federal government for each cash transaction involving more than $10,000. The feds harvested 17 million CTRs in 2000; federal agencies were flooded with tons of paper that bureaucrats often never bothered to examine. Beginning in 1996, banks were also obliged to file a Suspicious Activity Report on any transaction that “has no business or apparent lawful purpose or is not the sort in which the particular customer would normally be expected to engage.” The feds were soon receiving two hundred thousand suspicious activity reports per year. Greg Nojeim of the American Civil Liberties Union observed, “Congress barred financial institutions from telling their customers that their bank had spied on them by reporting their transactions to the federal government.”