Customer checks dropped

PUBLISHED : Thursday, 25 March, 1999, 12:00am
UPDATED : Thursday, 25 March, 1999, 12:00am

Banking regulators in the United States dropped a controversial proposal that would have required banks to monitor their customers more closely to try to spot illegal activities such as money-laundering. The proposed 'know your customer' rules sparked a public outcry and drew heavy fire from Congress and the banking industry, with claims that they would violate personal privacy. In a joint statement, the Federal Reserve, the Federal Deposit Insurance Corp, the Office of the Comptroller of the Currency and the Office of Thrift Supervision said they had re-evaluated the proposal and decided to withdraw it. 'The agencies received an unprecedented number of comments from the public, banking organisations, industry trade associations and members of Congress,' they said. The proposal would have extended rules requiring banks to report suspicious transactions, making them set up systems to screen customers and monitor their accounts for unusual activity.