Should Banks Be Forced by the Government to Spy on Consumers?

February 22, 2010 by Dan Mitchell

There’s a principled Fourth Amendment argument against anti-money laundering laws. In this video, however, I mostly focus on the cost-benefit issue, explaining that the fight against crime will be more effective if law enforcement is not forced to look for a needle in a haystack.

Posted in Big Government, Bureaucracy, Center for Freedom and Prosperity, Constitution, Crime, Drug War, Financial Privacy, Human Rights, Liberty, Money Laundering, Privacy, Regulation, Statism, Uncategorized, Video | Tagged AML, Banks, Constitution, Crime, Financial Privacy, Money Laundering, Privacy, Regulation | 59 Comments

59 Responses

on February 18, 2022 at 6:49 pm Dan Mitchell article notes: Prime Minister Trudeau has invoked, for the first time in his country’s history, Emergency Measures Act powers to shut down a domestic political protest, the so-called Freedom Convoy movement… Trudeau is not sending in th

[…] Consider money laundering laws, which began ostensibly to stop crooks from using ill-gotten gains, but now have become a multi-billion dollar burden that require banks to spy on all customers. […]
on February 18, 2022 at 9:59 am The War against Cash, Part V | International Liberty

[…] Consider money laundering laws, which began ostensibly to stop crooks from using ill-gotten gains, but now have become a multi-billion dollar burden that require banks to spy on all customers. […]
on April 13, 2021 at 9:07 am The Pointless Burden of Anti-Money Laundering Laws | International Liberty

[…] in 2010, I narrated this video on money laundering for the Center for Freedom and Prosperity, mostly to help people understand that governments are […]
on December 30, 2020 at 12:25 pm Once Again, Everything You Need to Know about Government in a Single Story | International Liberty

[…] issue reminds me of the federal government’s policy on money laundering. In that case, the government not only orders banks to spy on customers, but also to read their […]
on November 19, 2020 at 11:10 am Money Laundering Policy: Another Pointless and Costly Step by Uncle Sam | International Liberty

[…] than ten years ago, I narrated this video in hopes of convincing politicians and bureaucrats that anti-money laundering laws (and associated […]
on March 4, 2019 at 12:40 pm My Sporadically Successful Career as a Global Money Launderer | International Liberty

[…] offset by any benefits. There is zero evidence that AML laws reduce underlying crime rates (which was the rationale for these laws being imposed in the first […]
on June 11, 2018 at 1:16 pm Trump and the G-7: Right Outcome, Wrong Reason | International Liberty

[…] Back in 2015, I wrote about the scandal involving former House Speaker Dennis Hastert and said we got the right result (legal trouble for Hastert) for the wrong reason (government spying on financial transactions). […]
on March 20, 2018 at 8:42 am Another Proposed Expansion of Costly and Ineffective Financial Regulation | International Liberty

[…] the video I narrated on this topic. It’s now a bit dated, but everything I said is even more true […]
on August 20, 2017 at 6:24 am The Much-Deserved End of Obama’s Operation Choke Point | International Liberty

[…] require banks to spy on innocent people and report their […]
on July 29, 2017 at 7:55 am Jeff Sessions wants to steal your stuff – DonnyFerguson.com

[…] bad government policies that trample our rights (i.e., money-laundering laws that require banks to snoop on law-abiding customers), civil asset forfeiture is largely a result of the government’s failed War on Drugs. In other […]
on July 24, 2017 at 10:10 am Jeff Sessions: Wildly Wrong on Civil Asset Forfeiture | International Liberty

[…] bad government policies that trample our rights (i.e., money-laundering laws that require banks to snoop on law-abiding customers), civil asset forfeiture is largely a result of the government’s failed War on Drugs. In […]
on June 22, 2017 at 2:07 pm New Legislation on Money Laundering Doubles Down on Failure | International Liberty

[…] require banks to spy on innocent people and report their […]
on January 31, 2017 at 10:23 am The Government’s War on Money Laundering Is Causing the Wrong Kind of Casualties | International Liberty

[…] some of those “false positives” are mentioned in this video I narrated for the Center for Freedom and […]
on January 6, 2017 at 11:06 am Donald Trump’s Very Good and Very Bad Business Policy | International Liberty

[…] Consider money laundering laws, which began ostensibly to stop crooks from using ill-gotten gains, but now have become a multi-billion dollar burden that require banks to spy on all customers. […]
on October 13, 2016 at 8:25 am Money Laundering Laws Are Absurdly Annoying, Costly, and Darn-Near Pointless - Western Free Press

[…] to use the money they illegally obtain. So we now have a a bunch of laws and regulations that require financial institutions to spy on their customers in hopes that this will inhibit money […]
on October 11, 2016 at 3:30 pm Money Laundering Laws: Ineffective and Expensive | International Liberty

[…] to use the money they illegally obtain. So we now have a a bunch of laws and regulations that require financial institutions to spy on their customers in hopes that this will inhibit money […]
on September 3, 2016 at 10:55 am Another Episode of Drug War Lunacy | International Liberty

[…] War on Drugs has been the main justification for intrusive and ineffective – yet still very costly – laws on money […]
on June 20, 2016 at 8:42 am Failure in Government Means Never Having to Say You’re Sorry | Lex Rex for All

[…] multi-billion cost of anti-money laundering laws. For all intents and purposes, the government is requiring banks to spy on everybody, which results in a haystack of information, thus making it impossible for law enforcement to find […]
on June 20, 2016 at 8:23 am Failure in Government Means Never Having to Say You’re Sorry | Conservative Republican News

[…] multi-billion cost of anti-money laundering laws. For all intents and purposes, the government is requiring banks to spy on everybody, which results in a haystack of information, thus making it impossible for law enforcement to find […]
on June 18, 2016 at 10:19 am Failure in Government Means Never Having to Say You’re Sorry | People's Pundit Daily

[…] multi-billion cost of anti-money laundering laws. For all intents and purposes, the government is requiring banks to spy on everybody, which results in a haystack of information, thus making it impossible for law enforcement to find […]
on June 17, 2016 at 3:23 pm Failure in Government Means Never Having to Say You’re Sorry | International Liberty

[…] multi-billion cost of anti-money laundering laws. For all intents and purposes, the government is requiring banks to spy on everybody, which results in a haystack of information, thus making it impossible for law enforcement to find […]
on April 6, 2016 at 11:56 am We're all ticked off about Operation Choke Point - and all the other White House bullying - Self-Reliance Central

[…] of the Financial Action Task Force, which is an OECD-connected organization that ostensibly sets money-laundering rules for the world. Simply stated, the bureaucrats at FATF think there should be no human right to […]
on April 6, 2016 at 11:32 am Operation Choke Point, Bank De-Risking, and Obama Administration Coercion | International Liberty

[…] of the Financial Action Task Force, which is an OECD-connected organization that ostensibly sets money-laundering rules for the world. Simply stated, the bureaucrats at FATF think there should be no human right to […]
on December 26, 2015 at 12:20 pm The War Against Cash, Part One | People's Pundit Daily

[…] close by sharing my video on the closely related topic of money laundering. These laws and regulations have been imposed […]
on December 26, 2015 at 11:44 am The War against Cash, Part I | International Liberty

[…] close by sharing my video on the closely related topic of money laundering. These laws and regulations have been imposed […]
on June 21, 2015 at 10:29 am Regarding Research on Inequality, AEI > IMF | International Liberty

[…] And there was even one very good recommendation for helping the poor by cutting back on misguided anti-money laundering laws. […]
on June 3, 2015 at 11:36 am The Denny Hastert Scandal: When Bad Things Happen to Bad People for the Wrong Reasons | International Liberty

[…] more information, here’s the video I narrated on why it’s inefficient and intrusive to require banks to spy on their […]
on March 9, 2015 at 9:01 pm Great Moments in Local, State, National, and Foreign Government | Lex Rex for All

[…] sorts of policies that do infringe on our rights, from disgusting asset forfeiture policies to pointless snooping on our bank accounts. Or, as we just read, raids on okra […]
on March 9, 2015 at 11:34 am Great Moments in Local, State, National, and Foreign Government | International Liberty

[…] sorts of policies that do infringe on our rights, from disgusting asset forfeiture policies to pointless snooping on our bank accounts. Or, as we just read, raids on okra […]
on March 30, 2014 at 6:45 am Great Moments in Prohibition and the Drug War | International Liberty

[…] forget the misguided War on Drugs is also why we have costly, intrusive, and ineffective anti-money laundering laws, which result in other outrages, such as the government arbitrarily stealing money from small […]
on February 26, 2014 at 3:46 pm Great Moments in the Failed and Costly War against Money Laundering | International Liberty

[…] utilize the financial system. There’s nothing wrong with that approach, at least in theory. But these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime rates. …politicians and bureaucrats have […]
on February 3, 2014 at 10:38 am WORLD FINANCIAL SYSTEM AND ECONOMY AT DANGEROUS BREAK POINT | sreaves32

[…] nothing wrong with that approach, at least in theory. But these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on January 29, 2014 at 2:02 pm Thanks to Government, Banks Treat You Like Crap and Spy on You | The Freedom Watch

[…] our financial transactions with the Treasury Department’s Financial Crimes Enforcement Network. These laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime rates. As you might expect, politicians and […]
on January 28, 2014 at 10:32 am Thanks to Government, Banks Treat You Like Crap and Spy on You | International Liberty

[…] nothing wrong with that approach, at least in theory. But these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on January 13, 2014 at 12:51 pm The Lamest Possible Rationale for NSA Spying | International Liberty

[…] the evidence, however, shows that these laws are a costly failure. The invade our privacy, hurt the poor, impose high regulatory costs, and have little or no impact on underlying […]
on November 2, 2013 at 11:13 am Some Parts of Government Should Be Shut Down Forever / I.R.S. cartoons | partneringwitheagles

[…] nothing wrong with that approach, at least in theory. But as I explain in this video, these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on October 7, 2013 at 7:05 pm Some Parts of Government Should Be Shut Down Forever « Sago

[…] nothing wrong with that approach, at least in theory. But as I explain in this video, these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on October 7, 2013 at 6:12 pm We should shut down parts of our big government for good!!! These laws against money laundering are very expensive and don’t pay off!!! | The Daily Hatch

[…] nothing wrong with that approach, at least in theory. But as I explain in this video, these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on October 7, 2013 at 12:15 pm Some Parts of Government Should Be Shut Down Forever | International Liberty

[…] nothing wrong with that approach, at least in theory. But as I explain in this video, these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on September 2, 2013 at 1:00 pm Question of the Week: What’s More Worrisome, Big Brother Monitoring Where You Drive or Big Brother Controlling How You Drive? | International Liberty

[…] Money laundering laws are a good example. It’s rather offensive that the government has set up a system that forces banks and other financial institutions to spy on all of our financial transactions. […]
on August 18, 2013 at 9:57 am Another Great Moment in the Annals of Absurd Government Law Enforcement | International Liberty

[…] P.P.S. As I already mentioned, I don’t think this raid was about marijuana, but I don’t want to miss an opportunity to say that it’s time to end the foolish Drug War. People who abuse drugs may be stupid, but they’re not infringing on my rights. But the War on Drugs had led to all sorts of policies that do infringe on our rights, from disgusting asset forfeiture policies to pointless snooping on our bank accounts. […]
on July 4, 2013 at 8:45 am Mark Twain, the East German STASI, the NSA, the IRS, and the Correct Meaning of Patriotism | International Liberty

[…] exercise reminds me of anti-money laundering laws and those laws are a costly failure. They invade our privacy, hurt the poor, impose high regulatory costs, and have little or no impact on underlying […]
on June 25, 2013 at 9:22 am Support Individual Responsibility, Say No to Back-Door Gun Control | International Liberty

[…] the answer is no, but thanks to money laundering laws, the government actually does expect banks to know if customers are misbehaving. But that’s why […]
on June 10, 2013 at 4:52 pm Hoisting Obama on His Own Surveillance-State Petard | International Liberty

[…] the evidence, however, shows that these laws are a costly failure. The invade our privacy, hurt the poor, impose high regulatory costs, and have little or no impact on underlying […]
on May 5, 2013 at 12:30 pm Are Americans Rational About Risk, or a Bunch of “Paranoid Nuts”? | International Liberty

[…] sounds good, but the evidence shows that these laws have become very expensive and intrusive, yet they’ve had no measurable impact on crime […]
on March 26, 2013 at 2:02 pm Despicable Police State Policies from Andrew Cuomo in New York | International Liberty

[…] course, sometimes the government actually requires us to spy on each other, as is the case with money laundering laws that criminalize innocent behaviors in a costly, intrusive, and ineffective effort to reduce […]
on September 27, 2012 at 3:45 pm Two More Funny (and Accurate) Posters about Gun Control « International Liberty

[…] laundering laws, for instance, require banks (at great expense) to snoop on the financial transactions of customers in the theory that a few bad guys might get caught. As even the World Bank has noted, totally […]
on September 25, 2012 at 7:22 am Prominent Democrats routinely utilize tax havens for business and investment purposes, including as Bill Clinton, John Kerry, John Edwards, Robert Rubin, Peter Orszag, and Richard Blumenthal « HaltingArkansasLiberalswithTruth

[…] I’ve already explained how anti-money laundering rules are ineffective – or perhaps even counterproductive – in the fight against crime, largely because they generate […]
on September 23, 2012 at 2:24 pm Tax Havens like the Cayman Islands Have Better Fiscal Policy…and More Diligent Enforcement of Laws against Dirty Money and Terrorist Financing « International Liberty

[…] I’ve already explained how anti-money laundering rules are ineffective – or perhaps even counterproductive – in the fight against crime, largely because they […]
on July 17, 2012 at 2:07 pm Cory Booker’s Libertarian Case Against the Drug War « International Liberty

[…] But Mayor Booker is right. Like Ron Paul, Pat Robertson, Richard Branson, and Gary Johnson, he’s figured out that the Drug War is mostly a vehicle to expand the size and power of government. It’s why we have fascist asset forfeiture laws and costly money laundering laws. […]
on May 17, 2012 at 10:49 am World Bank: Anti–Money Laundering Rules Hurt the Poor | Cato @ Liberty

[…] the video I narrated on the general topic of money laundering laws. I think it makes very good points, but I wish these data had been available when I did the video […]
on April 19, 2012 at 10:23 am World Bank Study Shows How Anti-Money Laundering Rules Hurt the Poor « International Liberty

[…] the video I narrated on the general topic of money laundering laws. I think it makes very good points, but I wish this data had been available when I did the video so […]
on March 10, 2012 at 3:20 pm Financial Regulation, the Red-Tape Nightmare, and Anti-Money Laundering Laws « International Liberty

[…] just one specific part of the regulatory burden. Banks and other financial firms must deal with a costly array of laws and regulations as part of the government’s war on money laundering. This video explains the […]
on August 23, 2011 at 4:37 pm It’s Wrong to Steal…Even When the Government Does It Using Asset Forfeiture « ConservativeWatchNews.com

[…] I have no idea whether Mr. Stio is a good guy or a crook. But I know that the government shouldn’t be allowed to grab his money without convicting him of a crime. Especially for a supposed offense against absurdly foolish and ill-conceived anti-money laundering laws. […]
on August 23, 2011 at 3:02 pm » It’s Wrong to Steal…Even When the Government Does It Using Asset Forfeiture - Big Government

[…] I have no idea whether Mr. Stio is a good guy or a crook. But I know that the government shouldn’t be allowed to grab his money without convicting him of a crime. Especially for a supposed offense against absurdly foolish and ill-conceived anti-money laundering laws. […]
on August 23, 2011 at 9:29 am It’s Wrong to Steal…Even When the Government Does It Using Asset Forfeiture « International Liberty

[…] I have no idea whether Mr. Stio is a good guy or a crook. But I know that the government shouldn’t be allowed to grab his money without convicting him of a crime. Especially for a supposed offense against absurdly foolish and ill-conceived anti-money laundering laws. […]
on October 22, 2010 at 4:47 am Republicans and Democrats Should Be Especially Concerned about the Threat of Government When Their Party Is in Charge (Cato @ Liberty Blog)

[…] Gallup just released a poll showing that 46 percent of Americans view the federal government as an immediate threat to the rights and freedoms of ordinary Americans. My first reaction was to wonder why the number was so low. After all, we have a political elite that wants to do everything from control our health care to monitor our financial transactions. […]
on October 22, 2010 at 12:33 am Republicans and Democrats Should Be Especially Concerned about the Threat of Government When Their Party Is in Charge « International Liberty

[…] Gallup just released a poll showing that 46 percent of Americans view the federal government as an immediate threat to the rights and freedoms of ordinary Americans. My first reaction was to wonder why the number was so low. After all, we have a political elite that wants to do everything from control our health care to monitor our financial transactions. […]
on October 21, 2010 at 6:56 pm Republicans and Democrats Should Be Espeically Concerned about the Threat of Government When Their Party Is in Charge « The Market Center Blog

[…] Gallup just released a poll showing that 46 percent of Americans view the federal government as an immediate threat to the rights and freedoms of ordinary Americans. My first reaction was to wonder why the number was so low. After all, we have a political elite that wants to do everything from control our health care to monitor our financial transactions. […]

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