Nothing really new to us, but a nice reminder of how fudged this all is.

In a single year, US financial institutions spend an estimated $59 billion complying with the Bank Secrecy Act regime. This regime forced these institutions to file 28.7 million reports on their customers. And yet, these reports only tipped off 275 investigations by the Internal Revenue Service’s (IRS’s) Criminal Investigations division (Figure 1).

Out of the millions of reports filed, the most common reasons for filing a suspicious activity report are not heinous crimes like terrorism (0.013 percent of reports) or human trafficking (0.04 percent of reports). Rather, the most common reasons are that the bank was unsure about where a customer got the money or that a transaction was below the $10,000 currency transaction report (CTR) threshold.

When the Supreme Court effectively signed off on the Bank Secrecy Act, it only did so because $10,000 was considered “abnormally large” in the 1970s. However, Supreme Court Justices Lewis Powell and Harry Blackmun warned that “A significant extension of the regulations’ reporting requirements … would pose substantial and difficult constitutional questions for [us.] At some point, governmental intrusion upon these areas would implicate legitimate expectations of privacy.”