The Patriot Act You Don't Know About

Who knew how deeply the Patriot Act intrudes into our lives.

The time between the closing, next week, on my New York sale and the closing on my Maine purchase is tight. At first, I intended to have my New York bank wire the proceeds of the sale to my Maine bank. That is, until the New York bank informed me they hold the money for three days – without paying interest - before wiring it, even though they will receive it in the form of a cashier’s check which is universally understood to be cash.

I was furious, assuming they arbitrarily keep the money to benefit from the float for three days.

And then I was told that the Maine bank will hold the money for additional three days before it’s available to me, again with no interest. That’s eight days total, with the weekend, before I can have my own money - without interest.

A few days’ interest may not seem like much until you know that the value of my apartment increased 750 percent while I owned it and the interest, until I buy the new apartment and pay off some bills, is substantial from a middle-class point of view.

It took turning a few cartwheels, but my financial adviser eventually worked out an arrangement so I’ll get the money in time for the Maine closing and all is well. But the reason for the bank hold on the funds stunned me: it’s not so the bank can cash in on the float at customers’ expense; it is a provision of the Patriot Act.

All bank transactions of more than a certain amount must now be vetted to assure that it is not terrorist money being moved around and banks are granted three days to do whatever investigation they or the government do. During those three days – at each stop of the way wherever money is being moved, the money sits in limbo with no one making interest on it.

Although the proceeds from the house sale is a lot of money to me, it is a small transaction compared to commercial money transfers. How many millions of dollars in interest – whether to banks, individuals or corporations – must have been lost so far due to this Patriot Act provision – which is certainly passed on to you and me in increased prices. And I haven’t heard of any terrorists being caught in this manner.

Many years ago, I was privy to an extended telephone conversation between a wealthy, big-name, Hollywood producer and a bank. The producer, oblivious to or uncaring of my presence, was loudly threatening the banker with hideous personal consequences if he was not paid interest on a transfer of funds over a weekend, which the banker was refusing.

What I was thinking as I listened to this colorful invective was, “Oh, for god’s sake, it’s two days. Let it go,” until the amount was mentioned: $25 million. And this was back in the late 1970s when interest rates were hovering somewhere around 18 percent.

Suddenly, I had a great deal of sympathy for the producer, as I do for everyone now, who comes up against this little-known provision of the Patriot Act. I wonder how many others there are hidden in the small print waiting to screw up our lives.

Comments

[Paul]

It seems a small price to pay-3 days. People have to expect some inconviences when national security is at stake. After all they don't know you (or I) from a terrorist.

[Tabor]

So no interest is being made on the money by the bank as well, because it is being held?

[Vanda]

I've been lurking here for a week or so. Have a safe trip to you new home. I've so enjoyed the kitty stories:-)

[Ronni Bennett]

Tabor: No interest is earned for the bank. They are required to keep the funds in "vault" until released after the hold period.

[Michael]

The Patriot Act burns me and I was not even aware of this little tibit.

I am steaming at the big brother attitude of our government. Astounded by what is going on here and around the world.

Paul your attitude is what the government has been playing on to wring our freedoms from us. A small price here. A small price there and then there is no freedom.

I am sickened.

Ronni
I hope your move goes well. and as always Crabby rocks.

Take Care
Michael

[NaplesRed]

I have to agree with you and Michael, Ronni. I am reminded of Robert Brady's link the other day, "Congress Suddenly Deeply Concerned With Constitution." House Speaker Dennis Hastert, Attorney General Gonzales and President Bush were "working with the Justice Department to set up guidelines for the FBI to review materials it seized during the raid of the offices of Rep. William Jefferson, D-La."

There is a guideline. It's called the Constitution, and if the lawmakers look down, they'll find it under their feet where they have been trampling on it regularly.

On another note, I am still laughing at the Cat Travel Stories. Well told and priceless.

[Milt]

I'm with you Ronni, a little here a little there, it adds up to loss of all freedom, in time.

[leah]

Thousands were affected (read afflicted) by the McCarthy era. The Patriot Act and its consequences are having an untoward effect on every last one of us, one way or another, invading every crevice of society - a sort of new McCarthyism.

[Paul]

I am all for our freedom as Americans, but I realize that we have to be serious about protecting our security if we want to be protected from terrorists. Unlike some people I do not see a government conspiracy here!

[Laura]

I don't see a government conspiracy here, either. I see government stupidity. Honestly, I can understand why they want to check on funds, but that takes real money out of real people's pockets - there has to be a better way to do it. And if there's not...well, as it's been said, trading freedom for security doesn't work. You end up with neither.

[Anon]

I work for an investment bank. To those that think there is reason for holding money (Paul) with no interest becase of concerns of terrorists being behind the cash movements, there is something you need to know: KYC. Know Your Customer. KYC is a standard operating procedure for all banks and ALL the accounts they open and maintain.

Bank accounts cannot be opened without having gone through a vigorous ownership vetting procedure. The account is subsequently 'monitored' for "inappropriate" or "out of character" fund movements (amounts, currencies, dates, who the funds comes from, who the funds go to....). In the case Ronni has outlined, her bank would have had advance warning of the funds being moved (given she has noted correspondance arising from the need to settle on the new house), as well as a long standing relationship with her. There is no clearly no terrorist link here to justify the delay.

As for the interest due. All banks sweep funds into a single net position at the end of the day. If they are net 'short' they borrow to cover the overnight overdraft (borrowing is cheaper than funding the overdraft - as is the case for most individuals). If they are 'long', the money is put out to The Market where is can earn more interest that just sitting in THEIR bank account (again, much like in the case of an individual account holder). Within large banks, those departments that were 'short' are charged interest, those departments that are 'long' earn interest. So why is it so very unreasonable for Ronni to expect the interest to come to her? I dont think it is.

When dealing in foreign exchange, better rates than those posted in the high-street can be accessed if you move large sums: the rate often becomes that in the FX market on The Street. When someone is losing access to large sums of their own money it seems only reasonable they receive the interest they are due. Especially given the Clearing argument holds no water: cash is moved, electronically SAME DAY in the case of US dollars moving within the US banking system.

Sorry Paul, I'm so with Ronni on this one. And after more than a decade working in the business, in cases such as this, I have NEVER seen a reason for cash to be delayed or for interest not to be paid across to its righful owner.

Ronni, if you have the energy for it, I would go into battle on this one.

[Len]

So, what is the bank actually doing in that three day period? I bet: nothing. Government conspiracy? Not likely. Government stupidity, more likely.

[Naomi Dagen Bloom]

ronni, once again you've taken your own experience and expanded on it for a larger message. glad you're going to a place where there's less largeness, hopefully, more everyday respect.
we were on bedford street last night and talked of how much pleasure we had from your review of your years there. hoping you and ollie get to the cooler maine coast soon. it's moving toward very hot in nyc.

[dus7]

TY Ronni, for again sharing a personal vignette that is ultimately helpful to many and opens useful discussion. The Comment by 'anon', for instance, is interesting. The [new] account is subsequently 'monitored'... so we see that not only is movement of our money controlled, our personal accounts are subject to monitoring, raising the already touchy issue of privacy.

[joared]

Having spent some time working in a loan dept. of a bank, can only reitterate Anon's emphasis on the practice and importance of KYC which is true, also, at the most simple level of banking.

Amazing, Ronni, that your bank could have done business this long with you without establishing your veracity, credibility, legitimacy, you name it. If you're a terrorist, I hope they catch you. As I've read this blog, you certainly have been secretive about your life, so expect there's lots they have to check out! (she said sarcastically.)

From my point of view, the facts you describe are outrageous in terms of an individual's financial loss; more than a serious inconvenience to conducting necessary personal business transactions for establishing a residence; but a violation of citizen's rights courtesy of The "Patriot"(?) Act.

I am of the view this Act is not at all patriotic in the true sense of the word. In fact, it's enactment may have been well-meaning by some, but the effects result in the opposite. Hasn't helped that those responsible for foisting this on us have a blatant track record of lies and deceit. They have rewarded our trust by systematically divesting each of us individually of our rights and privacy. They have done this in the name of preserving our freedom, keeping us safe and secure.

I find it frightening that there are those who are actually willing to give up their freedoms and rights bit by bit thinking they will be more physically secure ultimately. For how long? From who? The terrorists we purport to be thwarting, including their infamous leader, must be feeling quite smug to see they are accomplishing exactly what they wanted, the erosion of our democracy, this republic, by our own hand. What does it matter whether it is by stupidity or conspiracy. What does matter is that it is happening. What does matter is what the people of this nation do about it.

Last year I became aware of Oak Hill Publishing Company that offers a free pocket size copy of The U.S. Constitution. I can only wish that every citizen of this country, which I dearly love, would make a point of obtaining a copy, more importantly, reading it, thinking seriously about what those words mean, then ask themselves do the policies, interpretaions, actions, which are pervasive today, truly reflect the principles of our constitution as our founders established?

[Paul]

I am all for Ronni having her interest, but let me have my security (such as it is). After all if the wolves ever do get through the door interest will not be my main concern at that point-survival will!

[nlowell]

Please remember that the name of this bill is not a descriptor but a highly contrived acronym - USA PATRIOT Act. The full title is "Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism."

It may be one of the most egregious examples of governmental reverse-speak ever. It does little to protect us, does much to strip us of traditional rights and freedoms, and establishes traditions that may take decades to reverse.

Just my opinion.

Enjoy "The Hill" Ronni. Wish I was there.

[knomad]

We got caught up in the same nonsense last year and I wondered why we got questioned about the source of the check we were depositing and told that they could take up to eleven days to clear the check. I was not informed about the no interest part. We were told the reason it would take so long was because the check was written on a bank in the East and we were in Arizona and the information took longer to ascertain. This seemed a bogus reason to me with electronic clearing being accepted as the same as presenting the paper check.

We finally worked out with the bank that when the checked cleared the originating bank the whole amount was released. Nothing was said about the Patriot Act.

I think the banks and governments can investigate the flow of money without impeding it.

[Wendy]

Sorry I'm late to this discussion. I hit this wall a month ago when I tried to move my business account from one bank to another. I was born in this town of 1,500 people and so was my father and my grandmother. I write a weekly column for the newspaper ... so the -- oh, six or seven people -- who don't know me by sight, know me by name. My bank officer was the grand-daughter of a man with whom I went to high school. I've seen her performa, and complimented her, in at least 4 local musicals.
The money transfer took 2 weeks. I had to have the original papers with my former married name in Oregon sent down from the Oregon Secretary of State. (I had, of course, already had to submit tax returns.) Patriot Act.
And the bank officer apologized and said, "We have to do this because the auditors check the paper trail of required ID and I could lose my job." (The bank is a branch of a big bank.) Forget KYC.
As far as "I'd rather be safe" ... how much money do you think is moved around the banking system to drive a truck full of home-made bombs into a federal building in Oklahoma?

[Anon]

Wendy: lol! KYC is the name of the auditable process rather than a "yep, she's my mate" type set-up.
But you definitely brought a smile!
You'll love my new finding this week though: turns out we're moving to RKYC (REALLY Know Your Customer)! Im thinking some external consultants were brought in somewhere along the line for this one! :o)

[Wendy]

RYKC...very funny. You're undoubtedly right about the external consultants. That "R" alone probably represents six months of meetings, proposals, drafts, plenary sessions, executive retreats, and $. Next iteration: faith-based banks.

[GLN]

I have to agree with NaplesRed in the matter of Congress getting all hot and bothered about the White House seizure of 'their' documents. They have been taken by a sudden fit of Constitutional Fever. It's so different when it's their own ox that is being gored - - where were these guys when they so blithely passed (several times now) the Patriot Act that waters down individual protections against government snooping and govenment seizures? Do we have one set of rules for Congress and another for the common citizen?

[jami]

i just hit this wall when moving an account to etrade. they've been holding my money -- in "vault," i guess -- for a month now because i can't convince them that i, a gentle young woman with a good job who hasn't even ever smoked pot, am not a criminal.

i hate that our country has changed from innocent-until-proven-guilty to the reverse under this leadership.

vote democrat in 2006.

[joared]

Patriot Act strikes again! Just wanted to let all know about my recent experience.

If you have a shared account i.e. checking, savings, money market, CD, etc., with a spouse who then dies and you now need to have your adult children added as co-owners, so they can access this account, in the event you are unable to do so, and funds are needed for your care, tough luck...unless you happen to be among those whose children live nearby, or are able to visit you frequently.

Forget about know your customer and even your customer's family. It doesn't matter if they've known you and your children much of your lives. If the adult children can't show up with you in person at your friendly neighborhood bank, you can't add their names to your personal accounts to insure that in the event you are incapacitated in the future your children can use your own money for your care.

If the adult children are not living close by, or might even be in a different state clear across the country from you, there's a good possibilty they won't be able to go to the bank with you.

Thanks to the Patriot Act, no more can the banking institutions add these loved ones to your accounts as co-owners, after having provided you with a signature card which you have mailed to your adult children, they have signed and returned to you or the bank, as was the former practice when the banker was trusted and expected to know the customer.

I would think a badly needed Patriot Act provision should enable the adult children's bank to verify, document their legitimacy and signature as individuals and customers, then forward the needed signature cards to the parent's bank. This is not a practice.

Anyone who sets up a trust can eliminate this problem, but I suggest there are many people for whom setting up a trust, lawyer's fees, etc. are not viable options.

For me, this is just one more example of the travesty in the false name of security that the Patriot Act has foisted on the American people. I can only hope when election time comes, some serious changes occur with who is elected to office.

By the way, did anyone happen to notice our House of Representatives voted themselves a pay raise while declining to vote an increase in the minimum wage for the working men and women of this country? (This came to my attention recently at PureLand Mountain per Robert Brady.)

Are our Representatives rewarding themselves for all their hard work on our behalf??

Or, if cost of living and increased expenses justify this raise, does this mean only our Representatives incur increased expenses for daily living, but the rest of the working people do not?