Financial Privacy in a Free Society

22 Pages Posted: 27 Jun 2017

See all articles by David Burton

David Burton

The Heritage Foundation

Norbert J. Michel

The Heritage Foundation

Date Written: September 23, 2016

Abstract

Financial and personal privacy is a key component of life in a free society, where individuals enjoy a private sphere free of government involvement, surveillance, and control. The U.S. financial regulatory framework is largely inconsistent with these ideas, and it is long past the time for fundamentally reforming the information exchange and reporting system that has grown over the past three decades. The current regulatory regime is overly complex and burdensome, and its ad hoc nature has likely impeded efforts to combat terrorism, enforce laws, and collect taxes. To better meet the needs of the citizens these laws are meant to serve, regulators must develop better information about the costs and benefits of the current regime, especially given that the current framework appears grossly cost ineffective. This paper provides a quantitative estimate of the cost of the current AML regime, recommends seven reforms to move the U.S. toward an improved financial privacy regime that protects individuals’ privacy rights while improving law enforcement’s ability to apprehend and prosecute criminals and terrorists.

Keywords: information exchange, AML, money laundering, know-your-customer, tax, Bank Secrecy Act, financial privacy

Suggested Citation

Burton, David and Michel, Norbert J., Financial Privacy in a Free Society (September 23, 2016). Available at SSRN: https://ssrn.com/abstract=2992784 or http://dx.doi.org/10.2139/ssrn.2992784

David Burton (Contact Author)

The Heritage Foundation ( email )

214 Massachusetts Ave NE
Washington, DC 20002-4999
United States
202-608-6229 (Phone)

Norbert J. Michel

The Heritage Foundation ( email )

214 Massachusetts Ave NE
Washington, DC 20002-4999
United States

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