Saving Privacy Act Counters the Federal Financial Surveillance Leviathan

Sen. Mike Lee (R-UT) (Pictured Left) and Sen. Rick Scott (R-FL) (Pictured Right)

​Sen. Mike Lee (R-UT) is advancing his new Saving Privacy Act to protect Americans’ personal financial information from warrantless snooping by federal agencies.“The current system erodes the privacy rights of citizens, while doing little to effectively catch true financial criminals,” Sen. Lee said. The bill’s co-sponsor, Sen. Rick Scott (R-FL), added: “Big government has no place in law-abiding Americans’ personal finances. It is a massive overreach of the government and a gross violation of their privacy.”
 
Are these two senators paranoid? Or are they reacting to genuine “massive overreach” from a government that already illicitly spies on Americans’ personal finances? Consider what PPSA has reported in the last three years:
 

• A new Security and Exchange Commission program – authorized by no law –

grants 3,000 government employees real-time access to every equity, option trade, and quote from every account of every broker by every investor.
 
“Traditionally, Americans’ financial holdings are kept between them and their broker, not them, their broker, and a massive government database,” state auditors and treasurers wrote in a recent letter to House Speaker Mike Johnson. “The only exception has been legal investigations with a warrant.”
 

• A new “beneficial ownership” requirement is forcing millions of Americans who own small businesses to send all the ownership details of their businesses to the Financial Crimes Enforcement Network (FinCEN) of the U.S. Treasury.
   
  While the government assures lawmakers that strict safeguards are in place – given recent high-profile hacks and deliberate leaking of confidential taxpayer information by an IRS consultant, the possibility of data breaches or political abuse is very real. American history offers many examples of financial information being abused for personal or ideological retribution, from the days of Richard Nixon to those of the IRS’s Lois Lerner.
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• Under the law, a bank must be served with a warrant or subpoena before releasing the details of a customers’ account. No such constitutional niceties are needed to access wire transfers of money. A unit of the Department of Homeland Security accesses bulk data on Americans’ money wire transfers above $500 collected by a non-profit, private-sector organization, the Transaction Record Analysis Center (TRAC).
   
  Sen. Ron Wyden (D-OR) and the ACLU reported that the database of money transfers grew from 75 million records from 14 service businesses in 2017 to 145 million records from 28 companies in 2021. More than 600 law enforcement agencies have access to TRAC’s information, ranging from a sheriff’s office in a small Idaho county to the FBI and the Drug Enforcement Administration, no probable cause warrant needed.

  
TRAC sucks in wire transfers within the United States between American citizens, as well as with those sending or receiving money from abroad. Sen. Wyden told The Wall Street Journal that TRAC lets the government “serve itself an all-you-can-eat buffet of Americans’ personal financial data while bypassing the normal protections for Americans’ privacy.”
 

• In 2022, PPSA reported on the Transparency and Accountability in Service Providers Act that would have enlisted 7.2 million employees of non-bank financial institutions to spy on their customers and report any activity deemed suspicious to the Federal Crimes Enforcement Network (FinCEN).
   
  Though Congress rejected that approach, banks still continuously scrutinize customers’ accounts and send voluminous reports to FinCEN, recording and reporting your financial life to the government without having to bother with warrants or other important safeguards of our privacy required by the Fourth Amendment. Other “financial institutions” are similarly required to make such reports, ranging from pawn shops, to car dealers, to jewelers, to broker-dealers.
  
  
• The Federal Reserve Board is publicly weighing whether or not to ask Congress to allow it to establish a Central Bank Digital Currency (CBDC), replacing paper dollars with government-issued electrons.
   
  Given the hunger that officialdom in Washington, D.C., has shown for pulling in all our financial information – including a serious proposal to record transactions from bank accounts, digital wallets, and apps – the Fed’s balancing of our privacy against surveillance of the currency is troubling. With digital money, government would have in its hands the ability to surveil all transactions, tracing every dollar from recipient to spender. Armed with such power, the government could debank disfavored groups or individuals.

 
Could that actually happen? It did across the border, when the Canadian government used emergency powers to debank truckers engaged in a political protest. At home, the tracking of Americans’ spending is a Fourth Amendment violation that inevitably leads to the degradation of the First Amendment.
 

• The House Judiciary Committee and its Select Subcommittee on the Weaponization of the Federal Government issued a report in March on secretive efforts between federal agencies and U.S. private financial institutions that “show a pattern of financial surveillance aimed at millions of Americans who hold conservative viewpoints or simply express their Second Amendment rights.”
   
  At the heart of this conspiracy is the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) and the FBI, which oversaw secret investigations with the help of the largest U.S. banks and financial institutions. Law enforcement and private financial institutions shared customers’ confidential information through a web portal that connects the federal government to 650 companies that comprise two-thirds of the U.S. domestic product and 35 million employees.
  
  

Aside from one’s online browsing history, there is little that reveals more about us – our social, romantic, political, and religious lives – than how we spend our money.
 
Sen. Lee’s bill counters this financial surveillance state by repealing many of the reporting requirements of the Bank Secrecy Act. It also repeals the Corporate Transparency Act (which forces small businesses to reveal their ownership), closes the SEC’s database on Americans’ trades, prohibits the creation of a Central Bank Digital Currency, and requires congressional approval before any agency can create a database that collects personally identifiable information of U.S. citizens.
 
Finally, Sen. Lee’s Saving Privacy Act would institute punishments for federal employees who release Americans’ protected financial information, while establishing a private right of action for Americans and financial institutions harmed when their privacy is compromised by the government.
 
The Saving Privacy Act is a landmark bill that deserves to become the basis of debate and action in the next Congress.