Letter to Senator Proxmire from Frederick M. Pownall__ Statement of Andrew J. Shepard, chairman of the board, Exchange California Savings & Loan League, statement of Thomas M. Clusserath, 272 Cannon, Howard W., U.S. Senator from the State of Nevada, statement 330 Ervin, Sam J., Jr., U.S. Senator from the State of North Carolina, ex- Hruska, Roman L., U.S. Senator from the State of Nebraska, letter re- 331 Independent Bankers Association of America, statement of H. L. Gerhart, Liberty Lobby, statement of Warren S. Richardson, general counsel_ 289 28 Mathias, Charles McC., Jr., U.S. Senator from the State of Maryland: 59 Prepared statement__. 39 National League of Insured Savings Associations, letter and statement re- 319 B. Report of currency transactions by financial institutions_. C. Reports of transportation of currency or monetary instruments Treasury Department-Continued Currency and foreign transactions reporting forms_. (1) Form 4683__. (2) Form 4789_ (3) Form 4790_ Bureau of Customs cases involving bank records_ Eugene T. Rossides, Assistant Secretary: Exchange of letters with Senator Tunney. Prepared statement__ Legislative history of Public Law 91-508_. Proposed amendments to currency and foreign transactions regula- Recent Internal Revenue Service cases involving bank records__. Senator Ervin__ Senator Tunney_. Summary of the results of the task force study on recordkeeping and William L. Dickey, Deputy Secretary for Enforcement, Tariff and Tunney, John V., U.S. Senator from the State of California : Correspondence with : Page 313 313 315 317 104 26, 55 48, 105 70 60 ་ྲ༤ མི ཅེ 99 105 93 32 29 285 Arthur R. Miller, professor of law, Harvard University. U.S. District Court, northern District of California, memorandum of decision 277 United States Savings and Loan League: Letter to Treasury Department from William C. Prather, general 285 Statement of Stephen Slipher, legislative director. 284 Wisconsin, letter from attorney general Robert W. Warren_. 333 AMEND THE BANK SECRECY ACT FRIDAY, AUGUST 11, 1972 U.S. SENATE, COMMITTEE ON BANKING, HOUSING AND URBAN AFFAIRS, SUBCOMMITTEE ON FINANCIAL INSTITUTIONS, Washington, D.C. The subcommittee met at 10 a.m., pursuant to call, in room 5302, New Senate Office Building, Senator William Proxmire, presiding. Present: Senators Proxmire and Bennett. Also present: Senators Mathias and Tunney. Senator PROXMIRE. The subcommittee will come to order. I apologize for being late. I had a speech to give on the floor. The Subcommittee on Financial Institutions will begin 2 days of hearings on regulations issued by the Department of the Treasury to implement the Currency and Foreign Transactions Reporting Act of 1970, otherwise known as the Bank Secrecy Act. The hearings will also cover bills introduced to amend the Bank Secrecy Act including S. 3814 by Senator Tunney and S. 3828 by Senator Mathias. The principal purpose of the Bank Secrecy Act is to enable law enforcement authorities to obtain the evidence needed to prosecute white collar criminals. While the act was concerned with the illegal use of secret foreign bank accounts, it was also concerned with domestic criminal activities including tax evasion, securities manipulation, and other white collar crimes. The act was designed to achieve these objectives by requiring financial institutions to maintain certain records which the Secretary of the Treasury determined to have a high degree of usefulness in tax, criminal, or regulatory proceedings. In prescribing these record keeping requirements, Congress clearly did not intend for law enforcement officials to have access to bank records without obtaining a subpena. For example, the report of the Senate Banking Committee on the legislation states and I quote: Access by law enforcement officials to bank records required to be kept under this title would, of course, be only pursuant to a subpena or other lawful process as is presently the case. The legislation in no way I am still quoting the words of the committee, authorizes unlimited fishing expeditions into a bank's records on the part of law enforcement officials. Unfortunately, this legislative intent may not have been realized in the regulations issued. The regulations do not outline the procedures whereby Federal law enforcement officials can obtain access to the records which banks and other financial institutions are required to keep. Nor do the regulations prohibit a bank from releasing these records unless pursuant to a subpena or other legal process. I believe we need to take necessary action to safeguard the regulation. A strong argument has been made that unlimited access to these records can invade a person's right of privacy and have a chilling effect on freedom of speech and association. On the other hand, we should not let these concerns obscure the basic purpose of the legislation nor should we repeal or substantially weaken the substantive provisions of the legislation. I am hopeful that these hearings can point the way toward accommodating the individual's right of privacy with the legitimate needs of law enforcement officials to prosecute white collar criminals. (The two bills being considered are reprinted as follows:) |