Big Brother has an ATM
Last night, Crooks and Liars sent me off to read this story about a retired school teacher who came face to face with Homeland Security when he decided to pay down his credit card debt:
They paid down some debt. The balance on their JCPenney Platinum MasterCard had gotten to an unhealthy level. So they sent in a large payment, a check for $6,522.
And an alarm went off. A red flag went up. The Soehnges’ behavior was found questionable.
And all they did was pay down their debt. They didn’t call a suspected terrorist on their cell phone. They didn’t try to sneak a machine gun through customs.
They just paid a hefty chunk of their credit card balance. And they learned how frighteningly wide the net of suspicion has been cast.
After sending in the check, they checked online to see if their account had been duly credited. They learned that the check had arrived, but the amount available for credit on their account hadn’t changed.
So Deana Soehnge called the credit-card company. Then Walter called.
“When you mess with my money, I want to know why,” he said.
They both learned the same astounding piece of information about the little things that can set the threat sensors to beeping and blinking.
They were told, as they moved up the managerial ladder at the call center, that the amount they had sent in was much larger than their normal monthly payment. And if the increase hits a certain percentage higher than that normal payment, Homeland Security has to be notified. And the money doesn’t move until the threat alert is lifted.
I’ve learned to ignore the droning rotor noise created by the black helicopters circling my house, so I dusted off my lawyer hat and undertook some cursory research. The Bank Protection Act, 12 U.S.C. § 1882, and its corresponding regulations at 12 C.F.R. § 21.11 require that national banks file a “suspicious activity report” if a transaction aggregating $5,000 or more “is not the sort in which the particular customer would normally be expected to engage, and the institution knows of no reasonable explanation for the transaction after examining the available facts, including the background and possible purpose of the transaction.”
Translation: Keep a close eye on your customers and let us know if one does anything fishy. If the reason a customer participates in a financial transaction is not readily apparent, assume he’s doing something fishy.
I can certainly understand why the federal government might find fiscal responsibility suspicious, and the regulation is not new; however, the extent to which our government now monitors every aspect of our lives under the guise of homeland security is chilling. I’d imagine that the feds are keeping a close eye on that potential terrorist cell in Nebraska.
If you’re concerned about financial privacy, you might have an ally in the banking industry. Overwhelmed with paperwork created by compliance with suspicious activity reporting requirements, the industry is lobbying Congress to ease the burden:
HOLLAND — Local bankers say they know their regular customers, and want the federal government to stop treating local businesspeople like drug dealers and terrorists.
They told U.S. Rep. Pete Hoekstra, R-Holland, at a Michigan Bankers Association gathering Monday that unnecessary reporting is costing the banking industry millions and clogging the system intended to stop the bad guys.
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Small banks are being overwhelmed by paperwork involved in doing suspicious-activity and cash-transaction reports on customers they know. Cash-transaction reports are done on any $10,000 transaction, and suspicious-activities reports are done on any amount.
“If the owner of the Front Porch ice cream parlor in Spring Lake does bang-up sales on the Fourth of July weekend and makes deposits of $3,000, $3,000 and $3,000 during the day because he doesn’t want the money sitting in the till, he has to get reported and investigated, if does this every July 4th,” said John T. Llewellyn, Michigan Bankers Association vice president for government relations.
Reporting transactions by regular customers are bogging down the federal system designed to catch the bad guys in the war on terrorism and drugs by swamping the system with thousands of unnecessary reports.
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