Personnel or offices maintaining customer information and documents at a location other than the location of the account or services would also have had to establish similar procedures to ensure that employees review information and documents to ensure compliance with Know Your Customer rules. While the proposal appears to have been an effort by the bank regulatory agencies to provide greater guidance to banks as to the nature and scope of an appropriate Know Your Customer Program, it was met by strong opposition by individuals and groups raising objections based on personal privacy concerns. The American Bankers Association urged the federal bank regulatory agencies to drop the proposal because it would increase regulatory burdens, expand the regulatory imbalance between banks and their competitors and raise serious privacy concerns on the part of bank customers. In addition numerous private sector organizations and individuals expressed their strong opposition to the proposal. In addition to private sector opposition, at least four different bills were introduced in the Congress to block or limit the ability of the bank regulatory agencies in adopting Know Your Customer rules.
Agencies Withdraw the Proposal.
In response to heavy public opposition, the bank regulatory agencies decided to withdraw the proposal. In withdrawing the rule, the agencies expressed their intent to continue to work together to find a proper balance between legitimate public privacy concerns and law enforcement efforts. Proposed New Rules Upset the Balance Between Fighting Crime and the Right to Privacy , Fin. A companion bill to H.R. 621 was also introduced in the Senate. All Rights Reserved.