 Allysia Finley in The Wall Street Journal covers the widespread and growing practice of federal agencies’ using the Bank Secrecy Act to surveil and punish politically disfavored groups through “debanking.” Banks face penalties that can go into the billions of dollars if they fail to close an account for a customer who is the target of numerous “Suspicious Activity Reports” (SARs), which flag them as “high risk.” Last year, banks filed 4.6 million SARS, leading to an unknown number of customers losing their accounts. Victims include former First Lady Melania Trump, and groups targeted by some in government such as firearms dealers, payday lenders, and pawn shops. Now the provision has blocked the Blockchain Association, a trade group for the cryptocurrency industry. Barney Frank, a former Chair of the House Financial Services Committee, says that the FDIC seizes banks “to send a message to get people away from crypto.” Finley writes: “The overbreadth in bank reporting is a plus for the government, since it gives the Federal Bureau of Investigation a trove of reports to scour without a warrant. The more info it has on more bank customers, the better, even if most haven’t committed a crime. Regulators prohibit banks from notifying customers if they have filed a SAR.” Unraveling the use of the Bank Secrecy Act to compile voluminous records of Americans’ private financial activities should be high on the list for reform by the incoming Trump administration and the next Congress. Comments are closed.
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