AGENCIES DROP BANK PRIVACY CHANGES.Byline: Marcy Gordon Associated Press Associated Press: see news agency. Associated Press (AP) Cooperative news agency, the oldest and largest in the U.S. and long the largest in the world. Banking regulators, responding Tuesday to a public outcry over privacy concerns, scrapped proposed rules that would have required banks to track the transaction patterns of customers. The ``know your customer'' rules, aimed at fighting money-laundering, were put out for public comment in December by four federal banking agencies. Since then, the Federal Deposit Insurance Corp. alone has received some 225,000 e-mail messages and letters, nearly all opposing the rules. Privacy advocates, conservative groups, ordinary people and the nation's bankers have complained that the rules would turn every bank teller A bank teller is an employee of a bank who deals directly with most customers. In some places this employee is known as a cashier. Tellers are considered a "front line" in the banking business. into a spy for Big Brother. They maintained that the proposed rules were unconstitutional and would violate prohibitions against unreasonable search and seizure unreasonable search and seizure n. search of an individual or his/her premises (including an automobile) and/or seizure of evidence found in such a search by a law enforcement officer without a search warrant and without "probable cause" to believe evidence of a . Early this month, the Senate joined the deluge Deluge (dĕl`y  j), in the Bible, the overwhelming flood that covered the earth and destroyed every living thing except the family of Noah and the creatures in his ark. of criticism, voting 88-0 to express support for a measure directing the regulators to drop the proposals. The regulations would have required banks to verify their customers' identities, know where their money comes from and determine their normal pattern of transactions. The requirements for banks to report any suspicious transactions to law enforcement authorities would have been expanded. In a statement issued Tuesday after regulators voted at open meetings, officials of the four agencies said they had received an unprecedented number of comments protesting the proposal on privacy grounds. Lawmakers and bankers reacted swiftly and positively to regulators' votes. Senate Banking Committee Chairman Phil Gramm William Philip "Phil" Gramm (born July 8, 1942, in Fort Benning, Georgia, USA) served as a Democratic Congressman (1978–1983), a Republican Congressman (1983–1985) and a Republican Senator from Texas (1985–2002). , R-Texas, said he was ``glad to know that there are regulators who will listen to real people and walk away from a bad idea.'' Donald Ogilvie, executive vice president of the American Bankers Association The American Bankers Association (ABA) is comprised of banks and other financial institutions. It seeks to promote the strength and profitability of the banking industry by Lobbying federal and state governments, building industry consensus on key issues, and providing products and , said the rules would have put banks ``in the untenable position of invading their customers' privacy and potentially could have eroded public confidence in the banking industry.'' The decision to withdraw the proposal ``does not diminish in any manner our long-standing support'' for other federal laws designed to fight money laundering The process of taking the proceeds of criminal activity and making them appear legal. Laundering allows criminals to transform illegally obtained gain into seemingly legitimate funds. , the regulators said in a joint written statement. |
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