New “reform” law destroys financial privacy

Hallelujia!  We’ll now have another “Reform!” law — this one designed to “reform” our “financial services” industry to prevent any further meltdowns such as that which struck in 2008 and continues to cripple segments of our economy two years later.  The president himself could hardly contain his hyperbole in describing the legislation he is today set to sign into law; he calls it “innovative” and “creative.”  Yet, lurking within its hundreds of pages of fine print, are provisions that will essentially destroy what little financial privacy remains for virtually every consumer of financial services in the country.  In that respect, yes, the legislation certainly is ”creative”; but that is one kind of creativity we can do without.

But it’s really too late.  Thanks to this financial services “reform” law, federal bureaucrats will have ready access to virtually every financial transaction that will take place in the country — from the largest bank acquisition to the smallest ATM withdrawal.  The guise under which federal regulators will be able to gather and data-base such detailed financial transaction information will be the responsibility given them in this new law to ensure that every “financial product or service” is “fair, transparent and competitive.”  And, of course, the reasoning goes, in order for the government to figure out if the system is running “fairly, transparently and competitively,” it has to be able to monitor all the myriad services and transactions which banks and other financial services entities offer. 

Does it give you a warm, fuzzy feeling knowing that your private financial transactions will be collected by a new “Bureau of Consumer Financial Protection?”  Are your fears about the government being able to data-base all such information allayed because the law includes language purporting to prohibit the government from gathering certain financial records if its purpose for collecting the data on individuals’ financial transactions is specifically to “gather” or “analyze” “personally identifiable financial information of consumers?”  Such language may give the impression that the masses of financial information now authorized to be collected and data-based by the government will be “privacy-protected”; but the reality is that such language, offered by Sen. Mike Enzi (R-WY) in a last-minute attempt to protect consumers from just this threat, is little more than a fig leaf.

The bottom line here is that behind this facade of “financial service reform” is perhaps the single biggest threat to an individual citizen’s financial privacy since the birth of the IRS.

35 comments Add your comment

Ragnar Danneskjöld

July 21st, 2010
7:18 am

Good morning all. Given that our economy is roaring too strongly, surely we can all agree that Congress has done the right thing by adding additional constraints to the life force of private enterprise, the capital funding mechanism. Change we can believe in.

Eric

July 21st, 2010
7:20 am

I’m in agreement . . . I fail to see any consumer financial protection in this new law. No telling how all this data will be used years from now! What we really could benefit from, instead, are stronger protections around identity theft and rogue credit reporting practices. But no one in our government ever asked me what I need . . . they just act on their own, while I get to read about it after-the-fact.

N.Ga. Nut Lover

July 21st, 2010
9:13 am

I must say my confidence in Ga. voters has been restored after the very dismal showing of John Oxendine. Every time I saw poll results with him in a commandinding lead I would shake my head in digust and disbelief. May the investigation now begin!

Sick&Tired

July 21st, 2010
9:14 am

Please, the government has always had access to every transactions you have made in the last 25 years or more. You can’t do anything in this country or any place else without someone knowing about it and keeping record of what you did.

This isn’t anything new or improved.

roughrider

July 21st, 2010
9:26 am

What Mr. Barr forgot to mention was that the ” Patriot Act ” ,passed by the republicans, had already removed any privacy that we might have and also did away with the 4th Ammendment.

JEM

July 21st, 2010
9:38 am

Agreed, Sick&Tired @ 9:14 am. Just something Dems can feel good and boast about and for Reps to make a stink about. And the beat goes on…

nelsonhoward

July 21st, 2010
9:41 am

Well, it was pretty far from unanimous, the vote in the senate was 59-39 so you must have some elected officials concurring with your position. Also, what I read was that merchants that extend credit direct to consumer, that information would be exempt. None the less, once the government has access to all financial information, that covers it all. Where money is involved, that is the whole nine yards, there are no secrets. Everything is transparent now,

Duh

July 21st, 2010
9:44 am

Roughrider, get with the program. This isn’t a Dem vs Rep blog like you are used to with Bookman and Tucker.

[...] Read More [...]

moddyd

July 21st, 2010
10:31 am

@Duh if it was one could shoot back at Roughy that the Dems in power re-upped the Patriot Act. But like you said we arent going to talk about that here.

Jeb

July 21st, 2010
10:47 am

Its ironic how your fear of govt makes you all sound like a bunch of paranoid hippies.

Captain

July 21st, 2010
10:53 am

You think this Financial Reform Bill is bad? We don’t yet know the details. Look at what we’ve learned over the past two months about ObamaCare. It will cost at least $300 Billion more than estimated, it will restrict access to Doctors, it will increase premiums, AND NOW THE OBAMA ADMINISTRATION IS DEFENDING IT AGAINST CONSTITUTIONAL ARGUMENTS BY SAYING IT IS A “TAX”. Didn’t the President say it WASN’T A TAX? I can hardly curb my enthusiasm for Cap and Tax, one more part of our Freedom and Free Market Economy the Obama Admin and Democrats will be attempting to take over. Let’s see…Financial Reform which allows the Sec of Treasury to seize what HE/SHE perceives as a risky company, that includes Insurance companies such as State Farm, Allstate, Met Life; Federal Control of Health Care; the Auto industry where companies are Gov’t owned and the Gov’t decided who could and could not retain their dealerships; the Mortgage Business with Freddy and Fannie. What’s left? The Energy Industry, Home Building? They are next with Cap and Trade. Want to sell your home? With Cap and Trade you will need to have an Energy Audit conducted or you can’t sell it. Want to add-on to your home? Can’t do so until the Feds sign off, or decline, based on the energy consumption. Want to build a swimming pool? Wait, it uses electricity, can’t be permitted until the U S Dept of Energy approves the plans. Don’t believe me? Read the Bill passed by the U S House of Representatives, it’s all right there.

Ben

July 21st, 2010
10:54 am

The only issue with this bit of “reform” is that the Republicans obstructed from actually letting it be something that could make a real difference.

AJC, why do you employ this guy? Such a regrettable human being.

No More Progressives!

July 21st, 2010
11:20 am

Ben

July 21st, 2010
10:54 am
The only issue with this bit of “reform” is that the Republicans obstructed from actually letting it be something that could make a real difference.

AJC, why do you employ this guy? Such a regrettable human being.

What an absolutely arrogant and classless thing to say.

You bilious, impertinent ass.

Veteran Observer

July 21st, 2010
12:17 pm

What a JOKE, a “financial reform bill” with an exemption for the federal mortgage programs that started the whole mess! As a bumper sticker the other day said “Obama I want my change back!” I can’t wait until November to deal with these Democrats. It will be interesting how former Governor Barnes walks the tightrope between kissing the President and the unhappiness with the President that the majority of voters in the state feel very strongly in his campaign!

StJ

July 21st, 2010
1:06 pm

If you needed another reason to go back to spending good old American cash instead of plastic, this would be it.

stranger in a strange land

July 21st, 2010
1:10 pm

Ragnar – hmmm, based on your early morning comment, I can only hope your fever has now broken and that you are once again lucid. (tongue planted firmly in cheek) :-)

William in Lithonia

July 21st, 2010
9:56 pm

Since Ronald Reagan’s Republican Revolution of Voodoo Economics and Religious Intolerance where the top 5% of Americans got their taxes cut in half and our National Debt went from 1 Trillion to 10 Trillion after George W. Bush got done with us and another tax cut for the rich that concluded with a destroyed economy,

Republicans have led us down a path believing that “Economic Freedom is tax cuts for the rich that will trickle down to the middle class.” But it hasn’t worked out that way.

If we take a look at what has worked in America’s past, the 70% to 90% tax rates on the top income level, and targeted tariffs protecting American Jobs, gave us the Greatest Middle Class in our history.

Ironically, the same people who want walls and armies on our borders protecting us from poor Mexican laborers are subsidizing foreign oil companies that pollute our beaches and are subsidizing good paying American jobs to be shipped overseas.

Do the Republicans really expect Americans to have money in their pockets to create jobs by their spending when they can’t even afford to pay their house payment competing with wages in China?

It is not the wealthy who create jobs, it is consumer spending. And the top 1% who make 23% of all the wealth in this country just aren’t spending enough of it to sustain a good economy. Wealth does not trickle down from tax cuts, in fact, the wealth evaporates when the economy crashes.

Teddy Roosevelt had raised the top tax rate to 80% while breaking up the Robber Barons and regulating the banks – before three Republican administrations from Harding, Coolidge, to Hoover cut the taxes on the rich, deregulated the banks, and eventually destroyed our economy in 1929. It was under Teddy Roosevelt that America became a super-power among nations.

If we learn from History we see that tax cuts for the rich do not stimulate a long term economy. The rich take their tax cut and buy the National Debt it creates – then they make interest on the debt that was created with the tax cut compounding the debt problem.

What stimulates a long term economy is consumer spending, a strong middle class. As Franklyn Roosevelt said, “Economic Freedom is money in your pockets.”

Before the tax cuts, to avoid paying those taxes, the rich would reinvest their wealth into their business and that created American jobs due to tariffs that prevented the rich from shipping those jobs overseas to avoid paying those taxes.

The Republicans social policy is bigotry and their economic policy is feudalism so why does anyone give them any credibility at all?

The Republicans economic policy is not America First, it is the Multi-National Corporations first.

Republicans have no allegiance to this country, only to Multi-National corporate wealth that demands less and less government that protects human rights and a middle class.

Government not only can create jobs, protect human rights and the environment. Government is the only institution that can create a Middle Class with tax policy and check the over reaching and self destructive powers of the corporation and intolerant religion.

Kirk Rangold

July 22nd, 2010
12:27 am

All I can say is that thank God that we have some ways to maintain our privacy. Sure, our (non-cash) financial transactions are all tracked by banks and those will now be monitored by the government but let us not forget that this is not the only privacy we must be concerned about.

You are concerned that Big Government or Big Banks know everything about you but how many people leave their unencrypted email on Google’s or Microsoft’s or Yahoo’s servers (can I call them Big Email?)? How many people actually take the time to use privacy apps like TrulyMail, PGP, and TrueCrypt to actually maintain their privacy?

While it is true we cannot control everything but we can control some things. Those things we can control, we should control.

Of course, we can control the government… but not enough of us choose to do so.

david wayne osedach

July 22nd, 2010
9:34 am

Privacy? That’s between me and my Cayman Islands account.

Sick&Tired

July 22nd, 2010
10:53 am

The crooks are still at it: “Reverse mortgages can lead to big trouble
Many of the bad guys from the subprime disaster are now targeting seniors.”

Fred

July 22nd, 2010
10:56 am

Jeb, its ironic how your comment sounds like a you’re a Jew headed to the gas showers.

Paul

July 22nd, 2010
11:24 am

The whole Obama Admin is a joke and the (news) media has now been fully exposed bringing forth slanted and untrue news stories.

Obama ask this USDA lady to resign and next thing you seen is CNN and MSMBC saying it was the Republicans who fired her. Man what false reporting. NOW, she is going to get a new job,,,,,,while millions are unemployeed. This whole amin makes me sick.

Gerald West

July 22nd, 2010
12:00 pm

In view of the $22 trillion meltdown caused by unregulated private financial enterprise, the need for regulation is indicated. Whether this particular 1000-page law is all that’s needed is open to analysis.

The best way to regulate financial transactions is by rationalizing the tax code, not by creating regulatory agencies. Gains from real investments in American commerce and industry should be taxed at half the rate of ordinary income. Gains from short-term investments, and from highly leveraged, purely speculative exotic financial instruments should be taxed at double the rate of ordinary income.

We have hundreds of casinos and scores of state lotteries for those who want to gamble. Let’s stop corrupting capital investment with games of chance.

Jefferson

July 22nd, 2010
12:11 pm

Better than before.

Bernie Madoff

July 22nd, 2010
10:01 pm

I’d like to go on record as opposing these financial reforms.

Not needed, nope.

Send your checks to cell # One Billion.

No More Progressives!

July 24th, 2010
10:02 am

William in Lithonia

July 21st, 2010
9:56 pm
Since Ronald Reagan’s Republican Revolution of Voodoo Economics and Religious Intolerance where the top 5% of Americans got their taxes cut in half and our National Debt went from 1 Trillion to 10 Trillion after George W. Bush got done with us and another tax cut for the rich that concluded with a destroyed economy,

Seem to have a little trouble deciding which topic you want to whine about.

What are voodoo economics?

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