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.