N A T I O N A L C E N T E R R E P O R T S
FDIC drafts Know
Your Customer regulations
Many concerned home school leaders have contacted us about the recently issued Federal Deposit Insurance Corporation (FDIC) draft regulations. The proposed regulations include the Know Your Customer rule (Section 326.9) which would enable the government to track citizens.
The four regulatory agencies over banks are the FDIC, the Federal Reserve, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision. Each agency drafted and published its own separate, but similar, regulations in the Federal Register on December 7, 1998.
These new regulations would require all banks, including non-FDIC members, to implement the Know Your Customer program. This means every bank must:
The National Center is planning to submit comments opposing the mandatory Know Your Customer rule to all four agencies during the 90-day comment period which expires March 8, 1999. If the proposed regulations are enacted in their present form, they would not be enforced until April 1, 2000.
1) determine the identity of the banks new customers;
2) determine the source of funds for transactions;
3) determine the customers normal and expected transactions;
4) monitor the customers transactions and identify the transactions that are inconsistent with normal and expected transactions; and
5) determine if a transaction should be reported in accordance with the FDICs Suspicious Activity Reporting Regulations.
In the meantime, Congress, particularly the Committees on Banking, has the right to intervene and prevent the rule from taking effect. Home schoolers have some particularly conservative friends on the House Banking Committee: Jim Ryun (KS), a home school father; Dave Weldon (FL), also a home school father; Bob Barr (GA); and Ron Paul (TX). With solid legislators like these standing up for our right to privacy, the National Center believes that there is strong potential for these regulations to be intercepted and defused at the congressional level.
The National Center will keep readers informed of further developments.