The Banks Are Narcing on You

WALKING INTO A bank feels like walking into any other business. Sure, there are a few extra cameras and an armed guard or two, but otherwise, it's a typical experience.

- Nicholas Anthony

What you don't see is the flood of reports—tens of thousands every day—that banks and other financial institutions file with the government, logging what Americans are doing with their money.

Banks may look like private businesses on the outside, but they have long been deputized on the inside as undercover agents for federal law enforcement.

Finance is among the most private aspects of our lives—we cover the keypad at ATMs, shred financial statements, and use multifactor authentication for online accounts. Yet what we really have is the illusion of financial privacy. Our information might be shielded from much of the general public, but not from the government.

The problem stems from a series of laws now known as the “Bank Secrecy Act regime.” Beginning in 1970, the Bank Secrecy Act made two major changes to the financial system. First, the law requires banks to maintain records on customers “where such records have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings.”