more on tracking old money

[David Farber <dave () farber net>]

Begin forwarded message:

From: Jonathan Peterson <jonathan.peterson () gmail com>
Date: August 9, 2006 9:36:44 AM EDT
To: dave () farber net
Subject: Re: : tracking old money

>Moreover, how much taxpayer money is spent gathering such information?

I hear about this stuff all the time because my wife is a consultant  
specializing in federal banking regulatory compliance - the trust is  
being investigated because of the Bank Secrecy Act.  The law as  
written by congress is VERY nebulous as to what banks need to be  
doing, but the federal regulators administering the law are pressing  
banks to do massive amounts of financial investigation.  Banks are  
stuck between protecting the privacy of their customers and the  
potential for massive fines.

So instead of only investigating suspicious activity and passing on  
potentially useful information to the feds, banks protect themselves  
by investigating everything and passing it all along.  Defeating the  
purpose of the law while throwing away your privacy.

And to answer your question, NO real  taxpayer money is being spent,  
instead banks and financial institutions are incurring massive  
amounts of new operating expenses (that are eventually passed on to  
consumers).  FWIW - Our back of the napkin analysis shows that  
financial institutions have incurred north of $1 billion to comply  
with the act, and so far it has been credited with ONE conviction (a  
drug money launderer).

There is a great story of the cost and uselessness of kneejerk  
lawmaking and over-zealous federal regulators who see themselves  
changing from accountants to protectors of the homeland with the  
stroke of a pen and the largely conservative bank presidents and  
boards who've been hoist by this petard just waiting for someone to  
write it.

Jonathan Peterson
jonathan () way nu

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