Saturday, January 29, 2011

US Treasury fudges truth on financial privacy

From the New York Times today:
In May, the government will no longer pay someone eligible for benefits with a mailed check. Instead, the money will be electronically deposited directly into a bank account or made accessible by a debit card. And by March 2013, the 10 million people who receive checks, out of 70 million people in all, must switch over to direct deposit or use a card.


Some see the decision as government meddling and say they fear their spending habits may be traced. But [David A. Lebryk, commissioner of the Treasury department’s Financial Management Service] said that information could be obtained only with a court order in a "rare exception."
That quote caught my eye, because I don't think it is correct.

In 1976, the Supreme Court ruled in United States v. Miller that bank customers have no legal right to privacy in financial information held by financial institutions. Responding to this ruling, Congress passed the Right to Financial Privacy Act (RFPA).

The RFPA requires that "no Government authority may have access to or obtain copies of, or the information contained in the financial records of any customer from a financial institution unless the financial records are reasonably described" and

1. the customer authorizes access;
2. there is an appropriate administrative subpoena or summons;
3. there is a qualified search warrant;
4. there is an appropriate judicial subpoena; or
5. there is an appropriate written request from an authorized government authority.

Administrative subpoenas are not court orders, and are not reviewed by a judge.

As for the government's claim that such requests will be infrequent, occurring in "a rare exception", as I described at length in a blog post just a couple months ago, the Department of Justice has argued in court that its prospective real-time surveillance of financial transactions is "routine". How exactly can something be both routine and a rare exception?

The truth is that warrantless financial surveillance likely occurs on a massive scale. The American people (and Congress) have no idea that this happens, because the courts are largely not in the loop, and the government is not required to compile or publish any aggregate statistics on the use of such surveillance methods. That is, although there are detailed annual reports on the use of wiretaps and other electronic intercepts by law enforcement agencies, we have no similar orders for the surveillance of our financial transactions.


Jonathan Hansen said...

Uh, the link to United States vs Miller is wrong; it points to a 1939 firearms decision. I found a summary at
- another case with specious, no, incorrect reasoning that allows the government to circumvent the Fourth Amendment. Exposure of information to a third party does not incontrovertibly change "private" information to "public" - especially if there is a contractual agreement that it won't be disclosed. But IANAL...

Jonathan Hansen said...

I would think that the the fifth item in the list:
5. there is an appropriate written request from an authorized government authority.
leaves another loophole as well, assuming that "appropriate" and "authorized" do not have specific statutory definitions but are determined post hoc by a judge if anything is challenged.

Jordan Marcus said...

Fair enough for the public to know where are the public funds are going. Since, obviously the funds are all coming from them. It's just normal for them to demand for a possible copies of the expenditures.