Video: Know Your Customer = Big Brother?
posted at 10:12 am on February 22, 2010 by Ed Morrissey
Banking laws require financial institutions to report certain transactions by their customers to the federal government in order to stop money laundering and to uncover the conspiracies funded by them — drug rings, terrorists, fraudsters, and more. Most people think that the thresholds for reporting are sufficiently tight to keep the government out of their business. However, financial institutions had to report more than 18 million transactions last year. Did that stop crime? Not exactly:
Like Dan Mitchell of the Center for Freedom and Prosperity, I look at this less as a black-and-white issue and more as a pragmatic decision in a tough world. However, if what we’re doing is casting so wide a net that we’re managing to find all the nuns and volunteer workers but missing 99.9% of the actual crime, then obviously we need to recalibrate our approach. That should be kept in mind as Congress creates another set of new regulations on the financial services industry, too. We want to stop actual fraud, not bring legitimate transactions to a crawl and give the government even more access to what should be private information.
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By way of comparison, is there any reasonable estimate of how many fraudulent (i.e. money laundering) transactions take place every year?
jwolf on February 22, 2010 at 10:16 AM
Thought you were taking some time off……?
OmahaConservative on February 22, 2010 at 10:17 AM
OMG!!! Ed is going libertarian on this!
MeatHeadinCA on February 22, 2010 at 10:19 AM
These blanket rules aren’t very effective because crooks learn them and know what to do to get a round it, and normal people and businesses are chronically trod upon or are at least inconvenienced by them. (See gun control laws)
forest on February 22, 2010 at 10:22 AM
How about we spend more time monitoring spending by those wonderful ELECTED officials. Seems like more shenanigans happen in D.C. than any other location. (I love to use the word shenanigans!!)
search4truth on February 22, 2010 at 10:24 AM
I mean can any agency even think about looking at 18 million transactions every year? I would think that would not be physicaly possible.
Johnnyreb on February 22, 2010 at 10:24 AM
Adds to the meaning of Cash is King.
Cindy Munford on February 22, 2010 at 10:27 AM
What we want is irrelevant. This administration and Congress are for big intrusive government. The thirst for more and more control over our lives is unquenchable.
Most people watching the interview paid attention to Mike Huckabee’s fawning all over Michelle Obama. It was disgusting. Yet, I wonder how many people noticed the radical ideas Michelle Obama was throwing out there. For example, she talked about “food deserts” which are areas where there is no ready access to grocery stores and fresh produce. Translated from socialism, this refers to the areas in the ghetto/ inner-city where crime has driven out the grocery chains. Mark my words, it is only a matter of time before the filthy lying coward in the White House will be forcing companies to open up unprofitable outlets in the name of fighting childhood obesity.
highhopes on February 22, 2010 at 10:28 AM
But that isn’t what the government wants.
rbj on February 22, 2010 at 10:30 AM
George Soros’ head pops up again in the Project Syndicate
J_Crater on February 22, 2010 at 10:32 AM
Don’t tell Mike Huckabee!
http://www.politico.com/news/stories/0210/33250.html
(story about Huckabee ripping CPAC as too “libertarian,” not “republican” enough)
cs89 on February 22, 2010 at 10:35 AM
Or opening govt owned chains with the declaration that this proves the private sector is incapable of delivering basic needs.
MarkTheGreat on February 22, 2010 at 10:37 AM
Unfortunately Huckabee is one of those conservatives who believes that lots of govt is needed in order to make people perfect.
MarkTheGreat on February 22, 2010 at 10:38 AM
So the question is,who in America,
are the evil doers!!
And,I thought the Liberals were against
spying on the American people!!
canopfor on February 22, 2010 at 10:40 AM
Dan, you sound like Elmer Fudd.
spmat on February 22, 2010 at 10:42 AM
Huckabee is no conservative. He is a closet socialist
highhopes on February 22, 2010 at 10:44 AM
Romney isn’t much better. He is all messed up in that Mass care fiasco.
Johnnyreb on February 22, 2010 at 10:48 AM
O/T:Out of town …
….So a belated congratulations to you Captain on your much deserved award and recognition at CPAC.
Congratulations to Allah and the Green room also for their contribution and the new partnership with Salem.
Not saying goodbye to the boss lady because she will always be here in some form or fashion.
Thanks for all you do in breaking the liberal monopoly on the exchange of information coming from the MSM.
This is so very important in getting the facts out to people like us and is very much appreciated.
Baxter Greene on February 22, 2010 at 10:54 AM
You’ll upset the concern squish trolls… *tsk tsk
MeatHeadinCA on February 22, 2010 at 10:54 AM
Disarm the Law-abiding laws (aka ‘Gun Control’) also don’t work, but that doesn’t stop the forcible citizen disarmament advocates from pushing them.
Chip on February 22, 2010 at 10:57 AM
When I needed to transfer some funds into a Norwegian bank account I had to fill out reams of paperwork that they sad was DHS-mandated. I was also told that for transfers to some countries, this paperwork was not mandated because there was so much moolah transferred there.
Like which ones, I asked? Oh, Mexico, Dubai…
Don’t remember the rest, but there were several Arab countries on the list.
Bob's Kid on February 22, 2010 at 10:59 AM
Indeed. The way it is now is like the employees monitoring the boss. That needs to change or we will be perpetually screwed.
genso on February 22, 2010 at 11:03 AM
Ed,
Put up some specific suggestions that have a reasonable expectation of working.
Or quit blowing a lot of, well …. hot air.
pabarge on February 22, 2010 at 11:06 AM
Which is a legitimate point of discussion. Unfortunately, Huckabee’s squad of morons couldn’t get past Romney’s faith to have that discussion and conversely we were supposed to ignore Huckabee’s faults because he was a fundamental Christian. If there is any one group in the GOP who helped get Obama elected in 2008 it was the Huckabee supporters.
highhopes on February 22, 2010 at 11:07 AM
Gun laws
School Standards (NCLB, for example)
Drug Laws
Banking Regulations
Yeah… not exactly stellar examples of how Government passing legislation somehow gets anywhere near eliminating the offenses the legislators claim it will…
MeatHeadinCA on February 22, 2010 at 11:08 AM
The government hates cash transactions for a simple reason — it is harder for them to get a slice. At least one of the examples cited in the video, a frozen bank account, sounds like a violation of the 4th Amendment.
GnuBreed on February 22, 2010 at 11:11 AM
Keep in mind, Cash for Clunkers was supposed to get old cars off the road in the name of ecology but it morphed into a second bailout for the auto industry. Then there is all those stimulus packages and reform measures that are clearly not going to live up to promises from the beginning.
What we need for 2010 is a Congress that wants to shrink government. The best we can hope, however, is to get a Congress that doesn’t want to grow government as much.
highhopes on February 22, 2010 at 11:20 AM
I will never bow down to Big Brother. If anything, I’ll kick him in the nanoos!
capejasmine on February 22, 2010 at 11:29 AM
Suspicious Activity Reports (SARS) requirements are not new to the Obama administration. They have been in place for decades, but were most recently elevated by the requirements of the Patriot Act. Financial institutions that fail to file SARS are more likely to be audited, so they often err on the side of reporting. The costs of compliance are a huge, btw.
SWLiP on February 22, 2010 at 11:35 AM
My guess is if unemployment continues to be a problem we will see the resurrection of an FDR era law banning firing people. Eventually we’ll get to what you are talking about.
chemman on February 22, 2010 at 11:48 AM
They are only against spying on liberal (progressive) people. Everyone else is fair game.
chemman on February 22, 2010 at 11:53 AM
It was a SARS filing that brought down Elliott Spitzer. Someone noticed that he was wiring funds below the $10k reporting threshold (what money laundering specialists call “structuring”). The bank filed a SARS, which got the FBI interested on the assumption that Spitzer was being blackmailed. The rest is history.
SWLiP on February 22, 2010 at 1:02 PM
My buddy buys and sells antiques and it is mostly a cash business, so he regularly gets cash or deposits large sums of cash. His bank informed him a couple of years ago that he had been flagged for suspicious activity.
He was told that the computer programs don’t just look at transactions of $10K or more – they look at transactions of anything ‘close’ to $10K and even flag any pattern of transactions! So if you cash or deposit $2K – $5K several times a month, you are probably being watched.
He told them that he has been doing business with their bank for 20+ years, that everybody there knows him and knows what his business is, but he would be happy to take his accounts elsewhere.
rockbend on February 22, 2010 at 1:03 PM
rockbend:
Your buddy made an appropriate point. His bank obviously has a blinkered notion of “kyc” and the reporting requirements. I would recommend that they attend a compliance training seminar.
SWLiP on February 22, 2010 at 1:30 PM
One thing we can know for sure. No one would ever lie about who they are. Not only that, there has never been one instance of a School teacher committing a crime, whether that teacher was retired or otherwise. I have always said it is not the role of the government to fight crime. This is best handled at the local level by the free market.
Given the fact that we can always count on criminals to report who they are and what their intentions are all this cloak and dagger, smoke and mirrors nonsense is just another way to spend our tax dollars. Not only that people who are dissuaded from crime are required to report this fact on their tax return, a document no one ever lies on. This is just another example of the government trying to do something.
Observation on February 22, 2010 at 1:43 PM
Recalibrate our approach? Interesting. Sounds like a word Obama would be using after “misspoke” and “inartful”.
kens on February 22, 2010 at 2:31 PM
FIFY.
AnotherOpinion on February 22, 2010 at 2:43 PM
Welcome to the USA as envisioned by Obama, Pelosi, and Reid.
Mallard T. Drake on February 22, 2010 at 3:44 PM
I am in a financial services industry where this very thing is happening. These new regulations have put hard-working and honest vendors out of business and rewarded certain vendors who are “connected”. Meanwhile, transaction times have slowed to a crawl while our industry battles through 40 new regulations per transaction…each needs to be checked, and double checked, and compared with affiliates involved in the transaction, and numbers perfected….
It’s maddening. It’s also a drain on profits and resources…and it allegedly done all for the benefit of the consumer.
In actuality, it’s done for the benefit of a growing bureaucracy which needs government workers to enforce all f the new regulations. When costs go up and consumers have to be given 20 more confusing disclosures per transaction just to satisfy regulations, how does that benefit the consumer?
Nigel on February 22, 2010 at 9:30 PM