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© 2001, American Civil Liberties Union. Reprinted with permission of the American Civil Liberties Union (

How the USA-Patriot ACT Puts Financial Privacy At Risk

Title III of the Uniting and Strengthening America By Providing Appropriate Tools Required To Intercept and Obstruct Terrorism Act (H.R. 3162, the "USA PATRIOT Act") would continue the unfortunate trend of expanding government access to personal financial information rather than safeguarding it against intrusion. While there is a need to shut down the financial resources used to further acts of terrorism, this legislation goes beyond its stated goal of combating international terrorism and instead reaches into innocent customers' personal financial transactions.

If the USA PATRIOT Act becomes law, financial institutions would monitor daily financial transactions even more closely and be required to share information with other federal agencies, including foreign intelligence agencies such as the CIA. In 1992, Congress amended the Bank Secrecy Act to authorize the Treasury Department to require "Suspicious Activity Reporting." In essence, this amendment gave the Treasury Department a blank check to require reporting of any "suspicious transaction relevant to a possible violation of law or regulation." Suspicious activity reports are not limited to anti-terrorist activities or even money laundering, but rather go to violations of any law or regulation. Section 351 of the bill extends immunity for such disclosures to specifically include contract law. This could mean that the privacy policies established under the Gramm-Leach-Bliley Act would be trumped when companies disclose information they claim was merely relevant to a violation of law or regulation.

Section 358 requires that, in addition to law enforcement, intelligence agencies such as the CIA would also receive suspicious activity reports. These reports are usually about wholly domestic transactions of people in the United States, and do not relate to foreign intelligence information. In addition, Section 358 would allow law enforcement and intelligence agencies to get easy access to individual credit reports in secret. There would be no judicial review and no notice to the person to whom the records relate. Through these provisions, the CIA would be put back in the business of spying on Americans, and law enforcement and intelligence agencies would have access to a range of personal financial information without ever showing good cause as to why such information is relevant to a particular investigation.

When these personal financial information anti-privacy proposals are combined with other information-sharing provisions contained in the USA PATRIOT Act, highly personal and potentially damaging information will be transmitted to many federal agencies that could lead to adverse consequences far beyond the stated goal of the anti-terrorism bill.

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