FDIC, email and Libertarians

Marta Russell ap888 at lafn.org
Thu Mar 25 13:35:51 PST 1999

A bit earlier I posted on this topic. This is the outcome. Marta Russell

> Wednesday, March 24, 1999 10:18 PM
> Flood of E-Mail Credited With Halting U.S. Bank Plan
> >New York Times
> >March 24, 1999
> >
> >
> >Flood of E-Mail Credited With Halting U.S. Bank Plan
> Though e-mail has historically been viewed as ineffective in
> >government, Federal bank regulators withdrew a proposal on Tuesday to

> >monitor individuals' bank transactions because of hundreds of
thousands of
> >e-mail messages that protested the proposal, federal officials said.
> >>From early December to mid-March, the Federal Deposit Insurance
> Corporation (FDIC) received 257,000 comments -- an unprecedented
> for the agency -- on the proposed "Know Your Customer" policy, which
> would require banks to monitor customers' banking patterns and report
> inconsistencies to Federal regulators in the name of detecting
> money-launders. More than 80 percent of those comments, about 205,000,

> arrived by e-mail. About 50 comments favored the proposal.
> >The FDIC's chairman, Donna Tanoue, said the huge volume of e-mail
drove the
> >decision to withdraw the proposal. That decision was reached in a
> in Washington on Tuesday with the Board of Governors of the Federal
> Reserve,
> >the Comptroller of the Currency and the Office of Thrift Supervision.

> >"It was the nature and the volume [of the comments]," she said. "When

> >consumers can get excited about an esoteric bank regulation, we have
to pay
> >attention." She added, "Certainly it's been an enlightening chapter
for the
> >FDIC."
> >Tuesday's action suggests that e-mail has growing influence in public

> policy decisions. Historically, issue advocates have used the Internet

> to
> encourage people to send faxes or letters to government agencies and
> officials. The conventional wisdom has been that e-mail carries less
> weight than written comments.
> >
> >
> >
> >Special Report
> >Connecting to Congress: More Members Are Plugged In, But Few Are
> >Connections
> >(January 15, 1998)
> >
> >
> >"That the FDIC allowed their decision to be weighted so heavily by
> is significant," said Jillaine Smith, a senior associate at the Benton

> >Foundation who tracks public-interest uses of the Internet. "It's
been the
> >sense among advocacy experts that Congress is not ready to be driven
> >e-mail efforts." The FDIC actively incorporated the Internet into its

> >deliberations on the "Know Your Customer" proposal. The agency added
> >pages to describe the proposal and set up an e-mail box just for
> on that issue. Not only was each e-mail message printed out and
tabulated, but
> >agency lawyers were required to spend part of their work days reading
> >comments. The agency also issued weekly reports that summarized the
> >comments.
> >"It's important to note that a number of these e-mails were
> >Tanoue said. "They came from the heart."
> >In the past, before opening access through e-mail, the FDIC would
> >only a few hundred comments on even the most controversial
regulations, and
> >those comments generally came from banking officials.
> >"Typically the comments we hear are packaged in Washington -- and
> >[e-mail comments] came from all over America," said Steve Katsanos, a

> >spokesman for the FDIC.
> >"We think it's pretty neat," he said of the Internet-based
> "You might well count on this being a standard procedure."
> >
> >
> >
> >An internet chain letter with organic growth.
> >
> >The e-mail and the traffic to the FDIC's Web site was driven through
> >reports on the issue in traditional media and through an online
> >campaign sponsored by the Libertarian Party. The proposal was a hot
> on talk radio, and the broadcasts often mentioned the FDIC's Web site
> e-mail addresses.
> >In addition to publicizing its online efforts in talk radio
interviews, the
> >Libertarian Party advertised its advocacy campaign by sending a
notice to
> >its 10,000-member e-mail list, which encouraged people to send the
> to friends. That notice also advised people not to spam the agency,
but to
> send thoughtful comments.
> >"It operated like an Internet chain letter," said Bill Winter,
> for the party. "It had this organic, geometric growth."
> >Ultimately, he said, people used the party's advocacy site to send
> >comments to the FDIC -- about 83 percent of the e-mail that was sent.
As a
> >result of the campaign, the party has created a new e-mail list of
> >people who asked to receive updates on privacy issues, he said.
> >The advocacy site will remain active to lobby for a bill in Congress
> >would prevent Federal regulators from mandating other programs to
> >bank transactions. Some banks have started their own programs to
> >transactions, and the "Know Your Customer" proposal originated
> banks
> >were looking for Federal guidelines on the matter.
> >"They don't want to see themselves in a newspaper article as a
conduit for
> >money- laundering," Katsanos said.
> >So, because the issue has not been put to rest, the Libertarians say
> >campaign will continue. To Winter, this week's victory challenges the

> >conventional wisdom that e-mail carries little influence.
> >"E-mail can have the impact of a sledgehammer on public policy," he
> >"Obviously, e-mail works to influence public policy if you do it
right. It
> >has to go to an agency that's set up to receive e-mail, which the
FDIC was.
> >It has to be an issue that people care about."
> >Even so, generating e-mail and creating work for government can be
> >problematic from a Libertarian perspective.
> >"Our worst nightmare as Libertarians," Winter said, "is that we might
> >caused them to spend more money and hire more employees to monitor
> >public comment."
> >
> >
> >
> >
> >
> >Rebecca Fairley Raney at rfr at nytimes.com welcomes your comments and
> >suggestions.

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