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House Judiciary Committee Investigates Major Banks for Unauthorized Sharing of Private Financial Information With the FBI

by Jo Ellen Nott

The House Judiciary Committee and Weaponization Select Subcommittee headed by Ohio Republican Jim Jordan is actively investigating major banks for allegedly sharing Americans’ private financial information with the FBI. The committee alleges the banks shared this information without proper legal processes, thus raising concerns about privacy violations and potential misuse of government leverage over the financial industry.

The investigation began on August 17, 2023, when Chairman Jordan issued subpoenas to Citigroup, JPMorgan Chase & Company, PNC Financial Services, Truist, U.S. Bankcorp, and Wells Fargo, prompted by FBI whistleblower testimony. The whistleblowers claimed that Bank of America voluntarily provided the FBI with records of individuals using its services in the Washington, D.C. area around the January 6, 2021, Capitol protest. Individuals who had purchased firearms in the period preceding the event with Bank of America products were reportedly prioritized on the list provided to the FBI.

If the allegations are true, it would mark yet another low point for privacy rights and due process of law in the long running collaboration between financial institutions and government agencies in which banks have become, in effect, a surveillance arm for the government by monitoring transactions and voluntarily sharing information with regulators.

The Financial Crimes Enforcement Network (“FinCEN”), originally established in 1990 and operating under the U.S. Department of the Treasury, is the linchpin of that collaboration. FinCEN’s stated mission is to combat money laundering, terrorism, and ensure the security of the financial system. Regulations, such as customer due diligence and the Bank Secrecy Act, require banks to identify and verify customer identities, keep records of transactions, and report suspicious activities.

The Patriot Act of 2001 further expanded surveillance measures, granting the FBI greater authority through National Security Letters to demand personal customer records without prior court approval. This regulatory influence often leads to over-interpretation of activities as “suspicious,” with banks potentially overstepping boundaries out of an abundance of caution to comply with regulatory expectations.

A report from the Free Speech Coalition, an adult-industry trade group, summarized the results of a survey earlier this year: “According to our data, nearly 2 out of 3 people who earn money in the adult industry have lost a bank account or financial tool, and nearly 40% have had an account closed in the past year.”

The report did not speculate about the cause of the closures, but the problem faced by adult entertainment businesses with their finances is suspiciously similar to problems created by the Obama Administration’s Operation Choke Point, which ended in 2017. Operation Choke Point allowed federal agencies, including the Department of Justice and the Federal Deposit Insurance Corporation, to pressure banks to deny services to businesses which government officials did not like.

The former editor of libertarian magazine Reason, J.D. Tuccille, writes that “the Free Speech Coalition report is only part of the evidence that government still cuts off disfavored individuals and industries from financial services. And if the feds are willing to lean on banks to deny service to targeted customers, they’re certainly willing to use their tools to conscript bankers as informants.”

In the end, regardless of the specific findings of the House Judiciary Committee’s investigation, all citizens should be aware that the arbitrary nature of unchecked government regulatory power has the potential for abuse, and there is an urgent need to oversee and regulate the regulators.  

 

Sources: Reason, Investopedia, Wikipedia, Zdnet

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