PRIVACY RIGHTS: BANKS HOPE TO BLOCK CUSTOMER MONITORING RULES

Banking industry officials in Cape Girardeau and the entire state are opposing federal regulations which they say would compromise the financial privacy of millions of Americans.

The so-called "Know Your Customer" regulations -- proposed by the Federal Deposit Insurance Corporation (FDIC); Office of the Comptroller of the Currency (OCC); Office of Thrift Supervision (OTS) and the Department of the Treasury -- would require banks to:

-- Establish a profiling system monitoring the deposit and withdrawal habits of each customer.

-- Determine customers' sources of funds.

-- Monitor and identify inconsistent transactions.

-- Determine if any transaction is suspicious, and if so, report accordingly.

If adopted, the regulations could go into effect April 1, 2000.

The goal of the proposed regulations is to crack down on illegal money laundering and drug dealing.

The Missouri Bank Association (MBA) has taken a lead role in Missouri against the proposal.

"We and are urging bank customers to contact the regulatory authorities in opposition of the new regulations," said Bill Ratliff, senior vice president of the MBA. "We don't want these new rules."

He said the campaign is paying off.

"Authorities have received as many as 2,000 messages in cards and letters in one day, in opposition of the new rules," said Ratliff. "We're already estimating many as 30,000 responses from Missouri, and we still have another week to go.'

Local banking officials seem united in their opposition to the proposed regulations, citing two issues -- the cost of enacting the regulations and the privacy issue for customers.

"It is invasion of privacy and the government is asking us to help them," said Lowell Peterson, president of Mercantile Bank of Cape Girardeau. "Regulations are already in place regarding large cash transactions, and we're opposed to the new regulations."

Banks already have to report cash transactions of $10,000 or more to federal authorities.

"Customers are already providing us with a lot of documentation," said David Shell, an official at Capaha Bank. "The new regulations will expand on that even more."

"We just don't need any more new regulations," said Steve Taylor, of NationsBank.

Cord Polen of Commerce bank agrees. "It's an additional cost for the bank, and it's gets into the privacy issue for customers.

"We think the new rules go too far," said Charles Daniel, of Union Planters Bank. "It means we'll have to inquire on more transactions, and where the money came from."

"We already monitor our customers pretty good," said Steve Ketelsen of Wood & Huston Bank. "We think current rules have got things covered."

"We opposed to the new rules as they are written," said Bob Grebing of Alliance Bank. "They are way beyond what banking is about."

"I can be burdensome to banks, and very costly," said Douglas Watson, of Bank of Missouri. "And, it'll be tough on customers."

"We're strongly opposed to the new proposals," said Phil Ibers, for First National Bank. "It poses problems for us on two fronts -- with our customers, and the cost of training people."

People are also turning to members of Congress.

Rep. Bill Hilleary, R-Tenn., introduced a bill earlier this month to block efforts by the regulatory agencies to impose new regulations.

Hilleary said the new regulations might compromise the financial privacy of millions of Americans.

As posted on the FDIC "Know Your Customer" Web page, regulations would force banks to effectively spy on their customers, Hilleary said. He argued that the rules would amount to unwarranted snooping into the private financial dealings of millions of customers.

"Anyone who puts a down payment on a new car, or buys an anniversary gift for a spouse could prompt a federal investigation into their private finances,

"This is federal intrusion at its worst and I hope the FDIC abandons this dangerous scheme," he said.

Kris Kruger, spokesman for Rep. Jo Ann Emerson, R-Cape Girardeau, said a bill similar to the FDIC proposal (HB-4005) passed the House last year, but did not pass in the Senate and never became a law.

The planned rules are still in the "comment stage" until March 8.

IF YOU'RE OPPOSED

Bank officials are urging their customers to take the time to express their feelings on the issue to federal financial regulators:

*Federal Deposit Insurance Corporation (FDIC), Division of Supervision, 1201 W. Peachtree St., SE, Suite 1600, Atlanta, GA 30309, Attn: Jim Watkins. FAX: (404) 817-8806.

*Federal Reserve Bank of Atlanta, 104 Marietta Street, NW, Atlanta GA, 30303, Attn: Cynthia Goodwin, Phone: (404) 589-7248, FAX: (404) 589-7302 or FAX: (404) 589-7342.

*Office of the Comptroller of the Currency (OCC), Communications Division, 250 E St., SW, Washington, DC 20219, Attn: Doc #98-15.

*Office of Thrift Superivision (OTS), P.O. Box 105217, Atlanta, GA 30348, FAX: (404 888-5634.