[MOL] This is an answer to the banking issue.........Nanc [00579] Medicine On Line


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[MOL] This is an answer to the banking issue.........Nanc



Subj:	 Re: Repeal "Know Your Customer" Rule
Date:	3/9/99 7:48:40 PM Eastern Standard Time
From:	Michigan@abraham.senate.gov (Michigan)
To:	NLPOST@aol.com

     Dear Friend:
     
     Thank you for contacting my office with your concerns regarding the
Federal 
     Deposit Insurance Corporation (FDIC)  Know Your Customer  amendment to
the 
     Minimum Security Devices and Procedures and Bank Secrecy Act Compliance 
     Program.  
     
     Know Your Customer  is intended to help protect the integrity and 
     reputation of the financial services industry while combating money 
     laundering and other illegal activities which may occur through financial
     institutions.  Specifically,  Know Your Customer  would mandate that 
     financial institutions determine their customers  sources of funds; 
     determine and monitor the normal and expected transactions of its 
     customers; and report appropriately any transactions of its customers
that 
     are determined to be unusual or suspicious, consistent with already 
     existing FDIC regulations requiring the reporting of suspicious 
     transactions.
     
     However,  Know Your Customer  would be costly to implement, by raising 
     banks  operating costs, which would eventually translate into higher 
     banking costs to customers.  In addition to questions over cost and 
     paperwork, there are concerns that this proposal will inappropriately 
     infringe on the privacy rights of customers. 
     
     March 5th, by an 88-0 vote, the Senate expressed support for a measure 
     directing the FDIC to drop the  Know Your Customer  Proposal.
Accordingly, 
     I too voted to express my opposition to the  Know Your Customer  measure.
     While the FDIC is responsible for improving and protecting our banking 
     system, it must take care not to overreach its bounds or place undue
burden 
     or cost on banking customers.  The FDIC must respect the interests and 
     rights of American citizens when considering any proposal.   
     
     Be assured that I will continue to monitor this issue as it develops 
     further.  Thank you again for contacting my office.
     
     With best wishes.  
     
     Sincerely,
     
     
     Spencer Abraham
     United States Senator
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