America’s largest banks are increasingly acting as surveillance arms of the federal government as well as enforcement agents for left-wing ideology, congressional witnesses asserted last week.
Since the passage of the Bank Secrecy Act in 1970 to combat organized crime and money laundering, the federal government has been systematically expanding its net to capture more detailed financial information on law-abiding Americans without seeking a warrant or having evidence of criminal activity, they testified.
“Americans write the story of their lives in their bank accounts,” Brian Knight, senior research fellow at George Mason University, stated on March 7 at a House of Representatives hearing on the weaponization of the federal government. “To function in a modern economy, Americans must create a trail of records that can reveal their movements, their religious and political beliefs, their sexual preferences, health conditions, whether they’re likely to own a gun or have had an abortion.
“The government can access these records without meaningful due process or the person ever knowing it happened.”
Regarding financial surveillance, Americans are supposed to be protected by the Fourth Amendment from unwarranted government searches, except in cases in which law enforcement can show “probable cause” of a crime before a judge. But the Bank Secrecy Act (BSA), and subsequent laws such as the 2001 PATRIOT Act, the 2020 Anti-Money Laundering Act, and the 2021 Infrastructure Act, have given government the power to circumvent those rights.
When it was passed, the BSA was immediately challenged as unconstitutional. However, the U.S. Supreme Court relied on a concept called the “third-party doctrine” in its 1974 ruling that the BSA did not violate the Fourth Amendment, allowing the law to stand. The third-party doctrine argues that once Americans share their personal information with institutions such as banks, they voluntarily surrender their rights to privacy.
Critics of this doctrine, however, say that it is very difficult for most Americans to live without bank accounts, credit cards, payment apps, loans, and other financial services. A 2022 report by the McKinsey consultancy found that “nearly nine in ten Americans are now using some form of digital payments, and they are engaging with these rapidly evolving solutions in an increasing variety of ways.”
Financial service companies collect detailed transaction data on users of their platforms, much of which is routinely passed on to federal authorities without a search warrant. Financial surveillance laws prohibit financial institutions from notifying customers that their information has been shared with law enforcement, thus protecting government secrecy rather than individual privacy.
“The [BSA] was so controversial that it spurred Congress to pass multiple bills, including the Right to Financial Privacy Act, with the explicit intent of countering the very financial surveillance that the Bank Secrecy Act created,” Norbert Michel, a director at the Cato Institute, told committee members. “Unfortunately, that 1978 bill was so watered down with 20 different exceptions that it failed to live up to its name.”
Expanding the Scope of Surveillance
The financial surveillance laws mandate that banks, broker-dealers, casinos, mortgage companies, mutual funds, money-service companies, and other financial institutions report to the federal Financial Crimes Enforcement Network (FinCEN) all transactions of more than $10,000, as well as any other transactions they consider “suspicious.”The $10,000 threshold, which would be more than $70,000 in today’s dollars, was set at a level intended to capture large-scale crimes but was never indexed toward inflation. Thus, as inflation eroded the value of the dollar over the past 50 years, the number of transactions captured by bank surveillance laws increased exponentially.
In addition to the effective lowering of dollar thresholds, what qualifies a transaction as “suspicious” also has been expanded.
At a May 2023 House Judiciary Committee hearing, a Bank of America “whistleblower” testified that the bank data-mined its customers in collaboration with the FBI, searching for anyone who had traveled to or made purchases in the Washington, D.C., area, or who had made firearm purchases around the day of Jan. 6, 2021. Bank queries also have included customers who shopped at Dick’s Sporting Goods, Cabela’s, or Bass Pro Shops, and search terms such as “MAGA” and “Trump.”
In addition, credit card companies Mastercard, Visa, and American Express agreed in 2022 to establish a separate merchant code for firearms that would allow them to track related transactions and hand over any that they considered suspicious to the FBI. Under pressure from gun owners, the card companies paused that initiative, but the issue has not yet been fully resolved.
In September 2023, California passed a law requiring banks and credit card companies to track gun purchases. However, several states, including Florida, Idaho, Mississippi, Montana, North Dakota, Texas, and West Virginia, enacted laws to ban the financial tracking of firearms.
“Given the conflicting state laws on this topic and the likelihood that other states will enact legislation to either restrict or mandate the code, our implementation pause remains in effect,” Visa Senior Vice President Robert B. Thomson III stated, but he added that his company would attempt to comply with California’s law.
While these measures and laws such as the BSA were passed ostensibly to fight crime, those defending civil liberties say that the government is capable of accessing bank records and other private information if they reasonably believe a crime has taken place. To comply with the Fourth Amendment, law enforcement would simply present evidence to a judge that an individual acted illegally and get a search warrant.
“The American system of government was designed, with good reason, to ensure that individuals enjoy a private sphere, free of government involvement, surveillance, and control,” Mr. Michel stated. “Unless there is a reasonable suspicion that someone has committed a crime, people should generally be free to live their lives unmolested and un-surveilled by the government.
“This is literally why the Fourth Amendment to the Constitution protects Americans from unreasonable searches and seizures, and Americans’ financial records should not be an exception to that rule.”
In addition, critics say there is little evidence that this is having a significant effect on reducing crime.
In 2022, financial institutions sent more than 26 million reports to government officials regarding the transactions of their customers, Mr. Michel stated. These reports, called “suspicious activity reports,” are typically sent to FinCEN, a division of the U.S. Treasury Department.
“Even though it’s been decades since the first suspicious activity report was filed, the Financial Crimes Enforcement Network still cannot provide data that explains how law enforcement even uses those reports,” Mr. Michel stated.
Wall Street banks also came under fire for what critics claim is a pattern of refusing services to certain groups, including conservatives and Christians, on the justification of “reputational risk.”
Testifying before the House on politicized debanking, Jeremy Tedesco, senior counsel at the Alliance Defending Freedom (ADF), stated that FinCEN had “colluded with big banks to monitor their customers to identify domestic threats,” based on lists provided by the left-wing Institute for Strategic Dialogue and the Southern Poverty Law Center. The ADF was one of the targeted institutions, Mr. Tedesco said, along with religious or conservative organizations such as the Family Research Council, Liberty Counsel, the Pacific Justice Institute, and the Ruth Institute.
“Simply put, the federal government appears to have swept up Christian and conservative organization organizations in its domestic terrorist dragnet,” Mr. Tedesco said.
“In 2023, Bank of America closed the long-standing bank accounts of Indigenous Advanced Ministries, a Christian nonprofit that helps impoverished widows and children in Uganda.”
Bank of America has refuted this claim. William Halldin, a spokesman for the bank, told The Epoch Times that “religious beliefs are not a factor in any account-closing decision.”
Mr. Tedesco alleged that JPMorgan Chase had also closed the accounts of religious or conservative groups “and never provided a credible reason.”
In addition, on March 6, attorneys general from 16 states charged that Wells Fargo had gone beyond information gathering to playing the role of enforcer for a progressive agenda.
“Wells Fargo & Company appears to be using debanking as a political tool to extend the policies of the Biden administration throughout the economy,” they wrote.
The letter, authored by Montana Attorney General Austin Knudsen, also was signed by attorneys general from Arkansas, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Nebraska, New Hampshire, Ohio, South Carolina, Virginia, West Virginia, Utah, and Wyoming. The signers charged that Wells Fargo has engaged in illegal racial discrimination, discriminated against certain industries such as coal and firearms, and committed to pressure farmers to cut their greenhouse gas emissions.
One of the cases cited in the AGs’ letter was the closure by Wells Fargo of the accounts of the firearms company.
“Last year, Wells Fargo abruptly informed a Florida gun dealer (Wex Gunworks) that Wells Fargo was canceling its business line of credit, and sent a letter stating that ‘the reason(s) for this action is: Banking guidelines excludes lending to certain types of businesses,’” the AGs stated.
Wells Fargo responded that the decision to close the accounts of Wex Gunworks was due to issues pertaining to that particular company, and not to the firearms industry as a whole.
“The reasons behind our decision to close the accounts of Wex Gunworks, Wex Training Group, and Brandon Wexler were specific to these particular customers,” a Wells Fargo spokesperson told The Epoch Times. “The basis for the account closures was not due to the type of business.”
Amid allegations that some large banks may prefer not to service certain Christian groups, several pro-Christian banks have opened their doors.
One of them is Christian Community Credit Union (CCCU) in San Dimas, California, which conducted an October 2023 survey of 1,300 professed Christians in the United States, showing that about one-third of them considered switching banks over the past year because of values conflicts and other factors.
“We are excited to provide a financial institution that aligns with their values and invests in their communities,” Blair Korschun, president and CEO of CCCU, said.
Other Christian banks include America’s Christian Credit Union and Cass Commercial Bank.
