The Patriot Act and the Banks

Discussion in 'The Fire For Effect and Totally Politically Incorr' started by Shizamus, Oct 3, 2003.

  1. Shizamus

    Shizamus New Member

    Jun 27, 2001
    South Florida SUN Sentinel
    Patriot Act Requiring People To Provide Detailed Personal Information To Banks,0,7707157.story

    By Business Writer Purva Patel

    October 1 2003

    If it's not doing so already, expect your bank to ask for loads more personal information when you
    open any new account -- the deadline for complying with some major provisions of the USA Patriot
    Act has arrived.

    Passed two months after the Sept. 11 attacks, the law aims to stem money laundering and terrorist
    financing. The new rules require banks and other financial institutions to gather more detailed
    information on their clients to prove their identities and make sure they're not on any government
    watch list, starting today.

    Consumers and businesses can expect to dole out more private data, especially if they aren't citizens
    or based in the United States.

    While the Patriot Act may cause headaches for consumers, smaller community banks are having to
    allocate more of their budgets than larger banks to comply. Banks such as Wachovia and Bank of
    America already comply with many federally imposed anti-money-laundering requirements and have
    had extensive identifying systems in place, spokeswomen said, so their customers may not see much
    of a change aside from signs and notifications that the bank plans to comply.

    The task is estimated to cost some small banks as much as 20 percent of profits and is
    time-consuming, according to experts and local bankers who use documents from tax returns to
    utility bills. Some bankers even travel across borders to confirm a client's business really exists.

    `Some resistance'

    First Southern Bank in Boca Raton asks customers for everything from voter registration cards to
    firearm licenses.

    "We're running into some resistance," said R. Moyle Fritz Jr., CFO. "Most of the customers have
    heard of the Patriot Act, but they're not really aware of how it's going to impact them."

    Fritz estimates the bank has spent $150,000 to $200,000 this year on software, new personnel and
    training to comply with the new rules.

    While the law requires banks to verify identities, keep records of their efforts and make sure
    customers aren't on any watch list, how banks go about getting to know their customers ranges from
    collecting an employer's address to the client's tax status. Other items may include investigating the
    source of a customer's funds, other accounts linked to that person and what they intend to use the
    funds for.

    Banks and financial institutions must confirm customer identities with identification that includes a
    name, date of birth, address and identification number such as a taxpayer identification number for
    citizens or a government-issued document for noncitizens. It sometimes takes several documents to
    validate information where a driver's license once sufficed.

    "It is both good and onerous," said Jack Trufelli, compliance director for BAC Florida Bank in
    Coral Gables. "It's a burden, but it's something we obviously have to do."

    BAC Florida Bank hired three more compliance officers, ramped up the list of papers it asks for
    from clients and bought specialized software to monitor transactions, Trufelli said.

    "Most of the customers understand why we're doing this -- that it's not prying for the sake of
    prying," he said.

    Tighter security

    Many other banks have complained that the new rules have strained relationships with long-time
    customers, according to initial results of a study by Florida Atlantic University professor David
    Wernick on post-Sept. 11 security's effects on the South Florida economy.

    "The due diligence is significantly greater, and a lot of the customers resent being put through the
    third degree, especially if they've been with the bank for a while," Wernick said. Some customers,
    especially those from abroad, may take their business to other countries.

    Where banks can draw the line as financial police is unclear. Now that the U.S. Attorney's Office
    has formed a task force to investigate allegations of foreign money laundering in six Latin American
    countries, including Nicaragua and the Dominican Republic, many international bankers are
    wondering where their duties end, said Bowman Brown, who serves as chairman of the Florida
    International Bankers Association's regulatory affairs committee.

    The Patriot Act requires financial companies to more closely scrutinize private banking accounts
    requested by foreign political figures and their family members and associates.

    "What's enough in terms of due diligence to determine whether your client is or isn't a close
    associate?" Brown asked.

    While it's critical to fight foreign corruption, Brown said the policing could also have negative
    political effects.

    "It seems to me it could help eradicate political corruption in these foreign jurisdictions but also could
    be seen as the U.S. exporting its morality again to other jurisdictions on an imperialistic and colonial
    basis," he said. "It depends on your perspective."

    Purva Patel can be reached at or 954-356-4667.

    USA PATRIOT Act (H.R. 3162)


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    EFF Analysis of the USA PATRIOT Act

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    The Secret Patriot Act II Destroys What Is Left of American Liberty

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    Ominous Sequel to USA Patriot Act
  2. Shizamus

    Shizamus New Member

    Jun 27, 2001
    Banking System Hijacked
    The Treasury Department has effectively gone down the road of Nazi Germany by taking away people's right to have a bank account if they appear on a government list. In other words, effective today (Oct 1) when you go out and try to open a new bank account, the government has told banks that they must run your name against a government list. To quote precisely from 106 pages of "final" treasury regulations at : :
    The proposed rule (final and effective today)
    required(s) a bank to have procedures for determining whether the customer appears on any
    list of known or suspected terrorists or terrorist organizations provided to the bank by any

    Federal government agency. (emphasis added) In addition, the proposal stated that the procedures must

    ensure that the bank follows all Federal directives issued in connection with such lists.

    Most commenters were concerned about how a bank would be able to determine

    what lists should be checked for purposes of this provision and how these lists would be

    made available. Some commenters asked that the final rule confirm that a bank will not

    have an affirmative duty to seek out all lists compiled by the Federal government and

    would only be required to check lists provided to it by the Federal government. Some

    commenters noted that lists published by OFAC are published but are not provided to

    financial institutions.(32) Many commenters urged that all lists within the meaning of

    section 326 of the Act, be centralized, issued by a single designated government agency,

    and provided to financial institutions in a commonly used electronic format. Some of

    thesecommenters suggested that instead of providing multiple lists, the government set

    up a single website that would permit a bank to search for a name alphabetically, similar

    to the OFAC list. Other commenters asked Treasury and the Agencies to clarify what

    action a bank should take when a customer appears on a list.

    (32) Nevertheless, the legislative history for this provision indicates that the lists Congress intended financial

    institutions to consult “are those already supplied to financial institutions by the Office o f Foreign Asset

    Control (OFAC), and occasionally by law enforcement and regulatory authorities, as in the days

    immediately following the September 11, 2001, attacks on the WorldTradeCenter and the Pentagon.” H.R.

    Rep. No. 107-250, pt. 1, at 63 (2001).

    Now here's the reality of this: Illegal aliens in California will still be able to open a bank account - as will anyone else with olive skin and Hispanic surname - but if you happen to end up on the OFAC list - tell me what kind of recourse you will have?. Even if innocent because there's no recourse. And, without a bank account, how are you going to cash a paycheck? See what I mean - the power is there if government decides to abuse

  3. Marlin

    Marlin *TFF Admin Staff Chief Counselor*

    Mar 27, 2003
    At SouthernMoss' side forever!
    We've run into the Patriot Act in every corner of our lives going through the changes necessary since SoMo and I married. Even to make minor changes in long existing banking and insurance accounts additional types of information are requested.

    While we have not been asked for data that goes beyond a Driver License, there is no question that this law and its result is the most dangerous thing to come along in the form of an attack on our individual liberties envisioned by the Founding Fathers.
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