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Commentary: Privacy of Our Financial Records

By Karen Spencer

Buffalo, NY – In 1978 Congress passed the Right to Financial Privacy Act (P.L. 95-630, Title XI, 12 U.S.C. 3401 et seq.) which said no government authority could have access to your financial records unless it involved a lawful investigation of a violation of a criminal or civil statute. Before your records could be divulged the government authority had to either 1) issue an administrative or judicial subpoena with prior notice to you and give you the right to a hearing in court or 2) obtain a search warrant.

Exceptions to these requirements of judicial scrutiny were made for the Secret Service or government authorities authorized to conduct foreign intelligence activities such as the FBI. To access financial records the FBI could write a letter to the financial institution certifying that the records were being sought for counter-intelligence purposes. But, the letter had to give "specific and articulable facts giving reason to believe that the customer is a foreign power or agent of a foreign power."

So from 1978 to 2002, the FBI could only see your records if they suspected a violation of law and notified you beforehand giving you a chance to object in court or if they obtained a search warrant. The only exceptions to this judicial oversight involved foreign intelligence activities AND that a person whose records were sought was believably a foreign power or its agent.

The 2002 Patriot Act expanded these exceptions to include "a government authority authorized to conduct investigations of international terrorism." More significantly, the FBI only need certify that its purpose is to protect against "international terrorism or clandestine intelligence activities, provided that such an investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment."

No longer must you be suspected of a crime or civil violation. No longer must the FBI give a factual basis for believing you to be an agent of a foreign power. It merely must allege that your records are relevant to a terrorism investigation.

So now without a search warrant or notice U.S. citizens' financial records are fair game and the bank can't tell you that the FBI is looking at your records. How broadly can the FBI define "international terrorism" and just what are "clandestine intelligence activities?"

Vague terms like these easily lend themselves to a fishing expedition -- a fishing expedition with no judicial oversight for accountability.

But wait, the morning Saddam Hussein was captured, President Bush quietly signed an amendment to this so-called Right to Financial Privacy Law expanding the definition of "financial institution." It is no longer simply a bank, credit union or consumer finance institution.

Now the FBI can access your records from securities brokers; travel agencies; pawnbrokers; insurance companies; realtors; telegraph companies; auto, boat or airplane salespersons; dealers in precious metals; the US Postal Service, casinos, or any agency the Secretary of the Treasury so determines!

This Intelligence Authorization Act for Fiscal Year 2004 (P.L. 108-177, Section 374) is definitely an invitation to a fishing expedition and we won't even know they are fishing. The potential for unchecked abuse is great. Greater than J. Edgar Hoover's secret files on student radicals in the 1960s and 70s.

Our expectation of privacy that Congress so loudly reaffirmed in 1978 is gone. Our fundamental system of checks and balances is eroding and along with it our cherished civil liberties. When will we say "Stop!?"

Karen L. Spencer is Archives & Special Collections Librarian in UB's Law Library.