While I believe that the proposed rule represents a well-intentioned effort to combat money laundering at U.S. financial institutions, it has also become apparent that as drafted, the proposal is susceptible to interpretations that have troubling Constitutional and regulatory implications. I recognize that the ability of criminal elements to enter the proceeds of their illicit activities into the legitimate financial system corrodes the integrity of that system, and demands an aggressive response from relevant regulatory agencies and law enforcement authorities. However, in developing strategies to counter money laundering, the government must also be vigilant in its defense of Constitutional liberties, and ensure that proposals that rely upon financial institutions to monitor their customers' account activity accord proper deference to the privacy concerns of those customers.
Banking depends on confidence of depositors in financial institutions.