In the face of overwhelmingly negative public comment, government regulators recently announced they were pulling the plug -- for now, at least -- on plans to require banks to profile and track their customers. However, Rep. Ron Paul (R-Texas), a member the House Banking Committee, warns that most big banks already have "Know Your Customer" programs in place.

• The "Know Your Customer" regulations proposed last December would require banks to keep records on the spending and savings habits of every client, with any deviation at all being reported to the IRS, FBI, DEA and other government agencies as being "suspicious."

• Those agencies, in turn, would be able to freeze accounts and seize assets without there ever being a court order or proof of criminal wrongdoing.

• The reality is that the financial regulatory agencies have for some time "recommended" that banks have "Know Your Customer" procedures in place, and many banks a long time ago adopted these rules very quietly and "voluntarily."

Not every bank is participating in this privacy grab, says Paul. Furthermore, bank consumers have a right to know what records their bank keeps on them and what is being done with the information.

Paul has introduced a bill, H.R. 517, the FinCEN Public Accountability Act, which would give Americans access to their files. Until such legislation passes, he suggests bank customers concerned about their privacy send a letter to their bank, asking about their policies and requesting a response in writing. If the bank does have these programs -- which are not required -- the customer can demand that such files not be kept.

Source: Rep. Ron Paul, "Get to Know Your Banker," Texas Straight Talk, April 12, 1999.

For text http://www.house.gov/paul/tst/tst99/tst041299.htm