Five Decades of Financial Oversight: A Call for Reform

For 55 years, governments have compelled banks to monitor and report customer transactions, often based on arbitrary thresholds rather than suspicious activity. This regime of financial surveillance began with the Bank Secrecy Act, signed into law by President Nixon on October 26, 1970. The legislation was initially intended to prevent Americans from hiding money in foreign bank accounts, but it has since expanded to target tax evaders, drug traffickers, terrorists, and most recently, cryptocurrency users. The list of 'financial institutions' required to report customer transactions has also grown to include not only banks and credit unions but also car dealerships, pawn shops, and even the U.S. Postal Service. As a result, over 27.5 million reports were filed on customers last year. A major issue with the current system is the $10,000 threshold for reporting transactions, which has not been adjusted for inflation since its inception. In the 1970s, $10,000 could purchase two new cars, but today it barely covers 15% of the price of a single vehicle. The Supreme Court has warned that this regime poses 'substantial and difficult constitutional questions' regarding privacy. To address these concerns, Congress has three options: adjust the reporting thresholds for inflation, eliminate the reporting requirements entirely, or repeal the Bank Secrecy Act in its entirety. The first option would involve increasing the $10,000 threshold to at least $77,000. The second option would require law enforcement to obtain a warrant to access someone's financial records. The third option would allow banks to decide what information they need and who they do business with, while still maintaining laws against knowingly assisting criminal activity. Regardless of the path chosen, reform is long overdue, and it is essential to respect financial privacy and stop the expansion of surveillance.