The Right to Financial Privacy: Crafting a Better Framework for Financial Privacy in the Digital Age

Abstract

The Right to Financial Privacy Act of 1978 was enacted to protect Americans from warrantless surveillance. In theory, it was supposed to counter the financial surveillance born out of the Bank Secrecy Act of 1970 and the Supreme Court case United States v. Miller in 1976. In practice, however, the Right to Financial Privacy Act failed to live up to its name because it was enacted with a list of 20 different exceptions to its protections. From law enforcement inquiries to federal statutes, the exceptions covered nearly all forms of financial surveillance. Worse yet, these issues have only been compounded in the digital age. The prevalence of credit cards, mobile banking, and other app-based financial tools has created an unprecedented supply of financial data. Government efforts like Operation Choke Point, the Treasury’s $600 reporting threshold proposal, and the constant increase of the scope of Bank Secrecy Act reporting have already made it evident how these financial data are being used. Such unrivaled access to the lives of all Americans makes it evident that now, more than ever, it is time to rethink how financial privacy is treated in the United States. Turning back the clock may not be possible, but removing the exceptions to the Right to Financial Privacy Act would establish the financial privacy protections that Americans should have had from the beginning.

Keywords: Financial Privacy, Bank Secrecy Act, Suspicious Activity Report, Anti-Money Laundering

JEL Classification: G1, G18, G2, G28,