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Re: [ISN] Feds Want Banks to Spy on All Customers...Even You! (fwd)
I spotted the *rhetorical* steel case in the first note.
The disturbing thing here is the requirement to report deviations from a
pattern. That is where it becomes a NaziReptilianProctoscope$ystem. It's
my fucking money, I can do whatever the fuck I want with it, whenever
the fuck I want to. I wish those fuckers would look at the Fourth
Amendment.
The structuring stuff looks like it could get pretty wierd: how I move
my money should not matter but maybe it does.
Why do reptiles have such a bad name? Some of my favorite politicians
are reptiles.
BTW - the FDIC site state that there is no statutory requirement for a
'Know Your Customer' system. You could also say that they are not
interested in little guys, that they need this stuff to do their job,
but if the laws are written so that anyone can be targeted without a
warrant then there is a *big* problem. Especially worrisome is automated
pattern analysis without a warrant - a violation of the 4th.
So, what are the alternatives to keeping your money in a standard
financial institution?
Seems to me that keeping it at home is pretty risky - eventually some
low-life will figure it out and then you'll have to choose between your
cash and your left nut.
Keeping it all tied up in goods is not any bargain either. A small
fraction perhaps...
Mike
>From the FDIC site.
Pardon the formatting - it's straight from the .gov.
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http://www.fdic.gov/search97cgi/s97_cgi.exe?action=View&VdkVgwKey=http%3A%2F%2Fwww%2Efdic%2Egov%2Fbanknews%2Fmanuals%2Fexampoli%2F98FINREC%2Ehtm&DocOffset=1&DocsFound=11&QueryZip=know+your+customer&Collection=www&SortField=Score&SortOrder=Desc&SearchUrl=http%3A%2F%2Fwww%2Efdic%2Egov%2Fsearch97cgi%2Fs97%5Fcgi%2Eexe%3Faction%3DFilterSearch%26QueryZip%3Dknow%2Byour%2Bcustomer%26Filter%3Dfilters%252Fallwww%252Ehts%26ResultTemplate%3Dfdic%252Ehts%26QueryText%3Dknow%2Byour%2Bcustomer%26Collection%3Dwww%26SortField%3DScore%26SortOrder%3DDesc%26ResultStart%3D1%26ResultCount%3D25&ViewTemplate=view%2Ehts&ServerKey=Primary&AdminImagePath=&Theme=Power&Company=FDIC
"Know> <Your> <Customer>"
Policy
One of the most important, if not the most important
means by which financial
institutions can hope to avoid criminal exposure to
the institution from customers who
use the resources of the institution for illicit
purposes is to have a clear and concise
understanding of each customer's practices. The
adoption of "<know> <your>
<customer>" guidelines or procedures by financial
institutions has proven extremely
effective in detecting suspicious activity by
customers of the institution in a timely
manner.
Even though not required by regulation or statute, it
is imperative that financial
institutions adopt "<know> <your> <customer>"
guidelines or procedures to enable
the immediate detection and identification of
suspicious activity at the institution. The
concept of "<know> <your> <customer>" is, by design,
not explicitly defined so
that each institution can adopt procedures best suited
for its own operations. An
effective "<know> <your> <customer>" policy must, at a
minimum, contain a clear
statement of management's overall expectations and
establish specific line
responsibilities. While the officers and staff of
smaller banks may have more frequent
and direct contact with customers than their
counterparts in large urban institutions, it
is incumbent upon all institutions to adopt and follow
policies appropriate to their size,
location, and type of business.
Objectives Of "<Know> <Your> <Customer>"
Policy
1.A "<know> <your> <customer>" policy should
increase the likelihood the
financial institution is in compliance with all
statutes and regulations and adheres
to sound and recognized banking practices.
2.A "<know> <your> <customer>" policy should
decrease the likelihood the
financial institution will become a victim of
illegal activities perpetrated by a
customer.
3.A "<know> <your> <customer>" policy that is
effective will protect the good
name and reputation of the financial institution.
4.A "<know> <your> <customer>" policy should not
interfere with the
relationship of the financial institution with
its good customers.
At the present time there are no statutory mandates
requiring a "<know> <your>
<customer>" policy or specifying the contents of such
a policy. However, in order to
develop and maintain a practical and useful policy,
financial institutions should
incorporate the following principles into their
business practices:
1.Financial institutions should make a reasonable
effort to determine the true
identity of all customers requesting the bank's
services;
2.Financial institutions should take particular care
to identify the ownership of all
accounts and of those using safe-custody
facilities;
3.Identification should be obtained from all new
customers;
4.Evidence of identity should be obtained from
customers seeking to conduct
significant business transactions; and
5.Financial institutions should be aware of any
unusual transaction activity or
activity that is disproportionate to the
customer's known business.
An integral part of an effective "<know> <your>
<customer>" policy is a
comprehensive knowledge of the transactions carried
out by the customers of the
financial institution. Therefore, it is necessary that
the "<know> <your>
<customer>" procedures established by the institution
allow for the collection of
sufficient information to develop a "transaction
profile" of each customer. The primary
objective of such procedures is to enable the
financial institution to predict with
relative certainty the types of transactions in which
a customer is likely to be engaged.
Internal systems should then be developed for
monitoring transactions to determine if
transactions occur which are inconsistent with the
customer's "transaction profile". A
"<know> <your> <customer" policy must consist of
procedures that require proper
identification of every customer at the time a
relationship is established in order to
prevent the creation of fictitious accounts. In
addition, the bank's employee education
program should provide examples of customer behavior
or activity which may
warrant investigation.
Identifying The Customer
As a general rule, a business relationship with a
financial institution should never be
established until the identity of a potential customer
is satisfactorily established. If a
potential customer refuses to produce any of the
requested information, the
relationship should not be established. Likewise, if
requested follow-up information is
not forthcoming, any relationship already begun should
be terminated.
Structured Transactions
Section 103.53 prohibits the structuring of
transactions for the purpose of evading the
currency transaction reporting requirements. Anyone
who causes or attempts to
cause a bank to fail to file a CTR or to file a false
CTR is covered under this section
as well as anyone who attempts to structure or assists
in structuring any transaction
with one or more domestic financial institutions. A
cash transaction in excess of
$10,000, which is subsequently withdrawn upon
realization that a CTR is being
prepared, should be reported as a possible attempt to
structure a transaction. See
also 31 U. S. C. 5324.
Examiners should be alert to consecutive transactions
involving cash in excess of
$10,000. Suspect transactions should be pursued
further. The following are examples
of types of transactions that may be reviewed for
possible structuring activity:
1.Cashed checks - pay particular attention to
multiple items cashed by the same
person.
2.Cash deposits.
3.Savings withdrawals/certificates of deposit
redemptions.
4.Personal money orders or official checks sold.
5.Official checks sold or cashed - look for
consecutive items.
6.Savings Bonds sold or redeemed.
7.Traveler's checks sold or cashed.
8.Loan payments or loan proceeds made in cash.
9.Securities sold or purchased for cash if the
financial institution acts as agent for
an individual and the transaction involves more
than $10,000.