United States banks do not tell you this, but they are now spying for the United States Government. I am now a chairman of a Credit Union (please join!) and as such went through Bank Secrecy Act training. “Bank Secrecy Act” I suggest is a misnomer– it is more accurately the “Bank Surveillance Act” since with this 1970 Act, the banks are to secretly report on their customers, and Credit Unions are to secretly report on their members, to the federal government for quite normal activities. This has real consequences, as I found out in my personal life.
The surveillance part comes when people want to use cash for transactions– if someone deposits $10,000 or more in their account, or withdraw the same, in the same day then the bank must file a report, called a “Currency Transaction Report“. But, if it is “suspicious”, and this is where things get pretty vague, then they must file a “Suspicious Activity Report” and this, I understand, goes to many agencies and causes alarms to start going off.
Oh, and the bank or credit union is absolutely required to not tell the member that any of this is happening. As my training class specified, if a person even takes out a lower amount, say $1,000 in cash, and then asks about reporting requirements, then the bank is required to file the alarm-bell-ringing Suspicious Activity Report, and not tell the customer.
Therefore just asking about the Bank Secrecy Act requires every bank teller to file a secret report flagging them as suspicious.
When they set $10,000 in 1970 it was worth more, actually worth $60,000 today when US government’s inflation calculation is used. Or put another way, if they wanted to have reports filed on transactions with $10,000 today, they would have pass the law in 1970 saying that any transaction over $1700 would be reported. So this law is covering many more transactions today then they used to.
This surveillance function may be there, not only to report on people, but to try to push people from using cash in the first place. Given the revelations of Snowden, I think we can assume that the US government sees all electronic transactions already, not just international transfers.
This had a very real effect on me when I wanted to loan an artist friend $30,000 so he could buy a house. I say artist friend because I thought I would be oh-so-cool by giving it to him in cash. Bad idea. He brought the cash to his bank to deposit and things started going wrong. They really wanted to know about where it came from, they wanted signed letters from me, which I gave them, and everything started to be uncomfortable. It was resolved, but only after a couple of months, and some calls from important people.
So laws that were place on the books long ago to flag quite large cash transactions now flag ones that are getting pretty small. The network of organizations that this information is going to is probably getting very large (but is probably secret). The government has enlisted every bank employee to spy on their members and secretly report on them.
All in all, we in the United States can do better than this.
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I was surprised when Chase bank began to require identification for any cash deposit. I’ll be changing banks in the near future as requiring an ID to deposit cash into my checking account is just too annoying.