Report: Your Bank Might Be Spying On You For The Feds

For many Americans, our banks know more about our lives than our own mothers. Based on our financial records, they can accurately guess a customer’s religious beliefs, political leanings, and more. Yet this extensive knowledge has been used to spy on us on behalf of the federal government, a revelation that was brought to light by a bombshell report released by the House Judiciary Committee (HJC) and accompanied by a video posted by the subcommittee.

The HJC report is titled “Financial Surveillance in the United States: How The Federal Government Weaponized The Bank Secrecy Act To Spy On Americans.” The Bank Secrecy Act (BSA), referred to in the report title, is an antiquated law enacted in 1970 to combat criminal money laundering schemes. The BSA requires a financial institution to file Suspicious Activity Reports (SARs) on its customer if it identifies “a suspicious transaction relevant to a possible violation of law or regulation” or file Currency Transaction Reports (CTRs) if a customer “conducts a transaction over $10,000 or multiple transactions that amount to over $10,000 in a single day.”

However, the HJC’s investigation revealed that a law that was meant to catch criminals had been weaponized by the federal government to surveil Americans without a warrant.

The HJC report uncovered three main issues. First is how financial institutions’ over-reporting has affected millions of law-abiding Americans. Since there is a significant monetary penalty for failing to file, the law incentivizes financial institutions to over-file SARs in a desire for self-preservation even when a customer’s activity could be completely legal.

To make matters worse, the threshold of daily transaction amounts set by the BSA is too low. According to the American Bankers Association (ABA), $10,000 in 1970 is equivalent to $75,000 today. Thus, an American who moves money between accounts to buy a house, a luxury car, or a piece of expensive jewelry could end up on a CTR report next to suspected drug dealers and terrorists.

Consequently, the SARs and CTRs have “proliferated exponentially and … are no longer inherently tied to combating financial crime.” In 2023 alone, nearly 300,000 “separate financial institutions and other entities” filed 25.4 million BSA reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN). These reports capture sensitive information such as personally identifiable information and detailed transactions of millions of Americans. Compliance with the BSA has turned “financial institutions into confidential informants that are required to secretly report Americans’ financial activities to the federal government.”

For example, an FBI whistleblower, George Hill, played a crucial role in prompting the HJC’s investigation. As a former intelligence analyst at the FBI, Hill informed the HJC and its subcommittee that “following the events of January 6, 2021, Bank of America (BoA), voluntarily and without legal process, provided the Federal Bureau of Investigation (FBI) with a list of names of all individuals who used a BoA credit or debit card in the Washington, D.C. region around that time.” BoA insisted that what it did complied with the BSA requirement.

Second, the HJC investigation revealed a shocking scale of data access. The data collected in these reports, which is highly sensitive, should have been strictly limited in access. However, the investigation found that tens and thousands of government employees have unchecked and warrantless access to FinCEN, often downloading information to their agency system. In 2023, government employees ran over three million inquiries through FinCEN. This massive scale of access is alarming and raises serious concerns about the potential for abuse, with the risk that some partisan government officials could exploit this access to target Americans who don’t share particular political views. That’s exactly what happened in the days following Jan. 6, 2021.

The FBI, per the report, uses “extremism” indicators to target conservative Americans. Instead of waiting for financial institutions to file SARs on their own, the FBI provides them with lists of Americans whose activities trigger these indicators. These indicators, such as purchasing a Bible or a firearm, making a transaction that involved the terms “MAGA” or “Trump,” or opposing Covid mandates, are clearly designed to target conservative Americans. The FBI then “encourages” these financial institutions to file SARs on the targeted individuals, a process that the HJC has deemed problematic.

As the HJC pointed out, “By providing financial institutions with lists of people that it views as generally ‘suspicious’ on the front end, the FBI has turned this framework on its head and contravened the Fourth Amendment’s requirements of particularity and probable cause.” Among the 17 financial institutions investigated by the HJC, the Standard Chartered Bank was apparently the only one that asked the FBI to go through a legal process before sharing customer data.

Additionally, FinCEN cast an even wider net by soliciting customer transaction information from financial institutions at vendors at D.C.-area airports, train stations, and bus stops around early January 2021 and Inauguration Day, even if the transactions were perfectly legal. This indiscriminate approach means that even an innocent American who bought a cup of coffee at the BWI Airport during that timeframe could be unknowingly caught in this net.

In addition to reporting, some financial institutions took a step further and “debanked” (denied financial services to) customers based on their perceived political views. Former First Lady Melania Trump disclosed in her memoir that a bank she had a long-term relationship with (she didn’t name it) terminated her account and refused to open an account for her son, Barron Trump. While Melania and Barron have plenty of other banking options, an ordinary American who is debanked will find it challenging to make a living and support his family when he cannot get paid for goods and services in our increasingly digital economy. Being debanked is like being put in a digital prison and being shut out of the modern society.

Finally, the federal government’s warrantless financial surveillance of Americans is poised to get significantly worse. Financial institutions and FinCEN are rapidly expanding their surveillance capabilities with the aid of new projects and technologies. Many banks have already implemented “surveillance monitoring” programs to capture a broader spectrum of customer data, including “cash activity, fund transfers, automated clearing house (ACH) transfers, and ATM transactions.”

The federal government, operating through the Bank Secrecy Act Advisory Group (BSAAG), is aggressively pushing financial institutions to adopt new technologies such as artificial intelligence and digital ID requirements to broaden their surveillance of Americans’ financial lives. The HJC has issued a stark warning that “every financial movement of every American could soon be automatically recorded and scrutinized.”

Americans should all be deeply concerned that our government and financial institutions are not only working together to spy on us but also potentially abusing their power to target and penalize Americans financially for their political or religious views. The incoming Trump administration and the Republican-led U.S. Congress must work together to prevent the potential weaponization of Americans’ financial data.