Hello big brother, goodbye privacy: The Patriot Act and your retirement

[eauclaireliberal]

Hello big brother, goodbye privacy
The Patriot Act and your retirement

By Robert Powell - CBS MarketWatch.com

>>>BOSTON (CBS.MW) - Under the new Anti-Money Laundering Program required by the USA Patriot Act of 2001, retirees and would-be retirees who want to invest their money, say, from the sale of their house, an inheritance, a pension fund distribution, or life insurance proceeds will likely have to jump through lots of hoops to deposit their money in a financial institution.

According to the U.S. Treasury Customer Identification Program (CIP), which took effect on October 1, 2003, your banker, mutual fund firm, broker, adviser, or insurance agent must now verify that you are who you say you are when you open a new account, especially with a large sum of money. In other words, your banker must verify your identity before you open up a new account.

A financial institution has a three-point checklist for new accounts under the program, according to John Hall, a spokesman for the American Bankers Association. First, the bank has to verify the identity of the person and maintain record of the identification. Next, the bank has to check the new account owner's name against a list of suspected terrorists and organizations, and then it must give the new account owner some type of notification about why they are asking for all this information.

But that's not the worst of it, according to Charles O'Neill, an anti-money expert with DALBAR, Inc. in Boston. "The new CIP, in effect, allows financial institutions to better monitor your financial behavior," he says. "This is going to take the get-to-know-your customer rule to the next level. It's now get-to-know-your-customer-even better."

For instance, O'Neill says investors should expect their banker or brokers to ask them a series of questions about their new found money – the source of funds, their investment objective, and why they are investing. In some cases, O'Neill says the retiree who takes his check from the sale of a residence into a bank might be asked not just about source of funds, but the name and relationship of person who purchased his house.

O'Neill says the reason for these and what some might think are intrusive questions is this: The Suspicious Activities Report or SAR. Financial institutions must now report suspicious financial activities to the U.S Treasury and that means they must constantly review customer transactions with an eye on potential terrorist activities. Each firm, he says, must set up a "risk-based" computer system that flags transactions that are extraordinary. For instance, he notes that investors who make a series of deposits, say daily in the amount of $9,999.99, might get a "what's up" call from their friendly banker.<<<

[teryang]

1. Burdens on commerce will backfire

...placing bottlenecks on investment will discourage investment. People are burying whatever money they have now, hoarding cash or buying gold, works of art, etc. When I get shit from a banker or investment house I withdraw my funds.

These idiots have no idea of the economic significance of the principles behind our Constitution- that is why they are destroying it.

[bemildred]

2. This sounds like it might annoy the wealthy.

[The Zanti Regent]

3. Oh, who believes these rules will apply to the Saudi Royal Family?????????

I don't

Are you stupid enough to believe they will comply with this law?

[RainDog]

4. a smaller version of this has been going on for years

for years banks have had to file "cash transaction reports" for cash deposits over 10k. If someone consistently made 9,999. deposits, they were also noted on these transaction reports.

The reason for this was to stop money laundering by drug dealers. Obviously it has totally halted the trafficking in drugs....
:eyes:

Drug dealers would hire people to spend their days going to various banks to deposit money, but of course, the biggest drug dealers didn't have to resort to this sort of penny-ante, for them, way of laundering money.

I suppose this sort of scrutiny for everyone makes sense, especially if someone has worked all his or her life and lived in the same place and had a mortgage with the same bank...

those people, of course, will not be inconvenienced by this unless they want to retire to another place, and even then, I can't see how Uncle Roscoe is gonna be treated like a possible terrorist.

I wonder how this will translate into fees the banks charge in order to deposit someone's money, though? That would be another way for them to milk a bit more from retirees, I guess.

btw, did anyone watch PBS last night? The financial program before Bill Moyers? A woman was on there who has co-written a book about Enron. She talked quite a bit how banks basically chose to remain ignorant about obvious misdeeds by Enron because the banks collected so much in fees from Enron's pyramid scheme. Enron was the biggest generator of fees...milllions of dollars...for banks, so the banks had lots of incentive to be blind to Enron's total shell game disguised as a successful biz.

And the investment side of banks, who don't "share" info with the banking side, made all kinds of money themselves, and for Enron, by touting this amazing company and its profits...which, in turn, were based upon loans to themselves to fake profits that did not exist.

I'm beginning to wonder if capitalism isn't like communism. It works in theory, but in practice, it's only a cover for totalitarianism and corruption.

If the Bush league in this country doesn't think it can destroy the economy, they should look at what has happened to other totally corrupt regimes.

They all fall. They all create financial havoc in the country which has had to endure their criminality.