The Banking Surveillance Industrial Complex
A bombshell report was released in December of 2024 by the House Judiciary Committee, revealing that a massive and constitutionally dubious surveillance operation has been underway by the federal government against countless Americans. Titled, “How the Federal Government Weaponized the Bank Secrecy Act to Spy on Americans,” its key findings demonstrate that the FBI and the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) have been working together to undermine the 4th Amendment and conduct widespread warrantless surveillance on the financial transactions of innocent U.S. citizens engaging in constitutionally protected behavior.
How do they do this? It’s simple: the federal government turns financial institutions into de facto arms of law enforcement to do their dirty work for them. Because the 4th Amendment of the U.S. Constitution only limits government agencies and institutions, it doesn’t apply to private businesses. This means that financial institutions—although heavily regulated to the point of becoming quasi-governmental entities—are not held to the same standards as law enforcement; but federal agencies have learned how to abuse the system to get private businesses to conduct searches for them without any warrant or subpoena.
The Bank Secrecy Act, a 1970’s law intended to combat money laundering, requires a financial institution to submit a Suspicious Activity Report (SAR) whenever it identifies any transaction it believes may be related to the violation of a law or regulation. The Committee report demonstrates how the FBI regularly manipulates this process to access information for which they otherwise would have to get a court order:
The FBI circumvents this process by tipping off financial institutions to “suspicious” individuals and encouraging these institutions to file a SAR—which does not require any legal process—and thereby provide federal law enforcement with access to confidential and highly sensitive information. In doing so, the FBI gets around the requirements of the Bank Secrecy Act (BSA).[1]
In 2023 alone, there were 4.6 million SARs filed by financial institutions with FinCEN. This BSA data—which holds highly sensitive and personal financial information of everyday Americans—is then accessible to “at least 25,000 authorized users across federal, state, and local government[s]” who “have warrantless access to these filings…through the FinCEN Query Program.”[2]
In addition to SARs, the BSA also requires financial institutions to file a Currency Transaction Report (CTR) on any person who conducts a transaction over $10,000 or multiple transactions that amount to over $10,000 in a single day.[3] This means non-suspicious transactions like the purchase of a car, furniture, jewelry, art, and even tuition payments totaling more than $10,000 are more than likely filed under a CTR even though they have no evidence of being linked to a crime. Keep in mind that the $10,000 threshold is nearly 80-years-old and, thanks to never-ending inflation by way of the federal reserve, that would equate to $75,000 in today’s money.[4] It is such a problem that even the American Bankers Association has urged FinCEN to rethink CTR requirements.
Between SAR and CTR filings, FinCEN said it received over 25.4 million BSA reports (SAR + CTR filings) from 294,000 financial institutions and other entities in fiscal year 2023.[5] If this is not alarming enough, digging into the “cited reasons” for a filing should be cause for even further concern. While the expressed mission of the BSA is to combat money laundering and terrorist financing, FinCEN reported that out of the 4.6+ million SAR filings in 2023, 3.174 million of them were cited for “Other Suspicious Activities.” Filings for “money laundering” only tallied up to 1.629 million and “terrorist financing” came in at only 1,500. There is absolutely no question that what FinCEN tracks is no longer reflective of its stated purpose and goes beyond the Bank Secrecy Act. Again, it is becoming such a logistics nightmare for the financial industry that some are asking, “do[es] law enforcement want to know everything or do they want intelligent SARs?”[6]
According to the Committee report, the FBI encouraged financial institutions to engage in mindreading exercises such as using First and Second Amendment-related transactions as early signs of radicalization, thus warranting further tracking.[7] Furthermore, an email from the FBI to Bank of America personnel reveals that “the FBI sought information on any BoA customer who transacted in the Washington, D.C., area and who made ‘ANY historical purchase’ of a firearm or who had made a hotel, Airbnb, or airline reservation within a given date range in January 2021.”[8]
Combine this with revelations from a March 6, 2024 Judiciary Committee interim report that revealed federal law enforcement’s use of sweeping search terms like “MAGA” and “TRUMP” to target Americans, it becomes evident that the federal government is not only engaging in privacy violations on an unimaginable scale, but it is targeting Americans precisely for engaging in constitutionally protected behavior.
Not only will Congress and the incoming Trump administration need to take prudent action against this unconstitutional assault on Americans, but Americans themselves need to seriously consider alternative approaches to handling their money and demand from financial institutions better privacy policies that protect them from government agencies on all levels.[9] [10]
Notes
[1] See page 2, “Report: How the Federal Government Weaponized the Bank Secrecy Act to Spy on Americans”
[2] See page 3, ibid.
[3] See page 6, ibid.
[4] See page 9, ibid.
[5] See page 8, ibid.
[6] See page 11, ibid.
[7] See page 14, ibid.
[8] See page 26, ibid.
