Reid: ‘Someone’ Should Offer Amendment to Financial Reform Bill to Prevent Treasury From Accessing Financial Records of Law-Abiding Citizens

By Matt Cover | May 5, 2010 | 1:48 PM EDT

Senate Majority Leader Harry Reid discussing financial reform on Senate floor (congressional photo).

( - Senate Majority Leader Harry Reid (D-Nev.) says he wishes “someone” would offer an amendment to the financial regulatory bill to prevent the federal government from probing Americans' private financial records. A provision in the bill would allow a new Treasury Department agency to demand “any data or information” from any financial firm and use a subpoena to get that information if necessary.

Reid, however, did not respond when asked whether he would personally support such an amendment.

The Fourth Amendment to the Constitution guarantees the “right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.” Ordinarily, in keeping with this amendment, the government needs to establish probable cause that a crime has been committed and then secure a warrant from a judge before it can look at private papers and records.

The financial regulatory bill, which includes the provision that would empower a new Office of Financial Research to demand “any data or information” from any financial firm, is now being considered in the Senate. Reid has indicated he intends to bring it to a final vote next week.
At a Wednesday news conference, asked Reid whether he believed the provision empowering the government to demand private financial records and data was contrary to the principle of the Fourth Amendment. Reid said the provision in question seemed “like the perfect place for an amendment,” suggested that “someone” should offer one, but did not commit to offering one himself. "The Office of Financial Research is empowered to collect ‘any data or information’ from any firm, using subpoena power if the firm were to refuse. However, the 4th Amendment protects against unreasonable searches and seizures and doesn’t the ability to collect ‘any data or information’ from any firm violate the rights of Americans to have their financial dealing kept private?”
Sen. Reid: “That sounds like the perfect place for an amendment. I wish someone could offer that.” 
When followed up by asking Reid if he would support such an amendment, he did not answer and called on another reporter.
The Office of Financial Research would work under the new Financial Stability Oversight Council the bill would create. The purpose of the office would be to enable the council to study trends in the financial industry and to examine any financial deal made by any financial firm under the pretext of searching for systemic risk.

The bill empowers the Office of Financial Research to subpoena any financial firm that refuses to turn over the information the office wants.
“The Director may require, by subpoena, the production of the data requested,” the bill says—on page 71 of its 1,566-page text.
The Office of Financial Research also is empowered to “monitor, investigate, and report” on any changes in “system-wide” levels of financial risk, as well as to “investigate disruptions and failures in the financial markets” with the results of such investigations being used to recommend new government regulations.
In order to do this, the Office may require financial firms to report to it on any activity in which it has taken an interest, allowing the government to peek into any type of financial dealing between any person and any bank in the country.
"The Office may, on behalf of the Council, require the submission of periodic and other reports from any financial company for the purpose of assessing the extent to which a financial activity or financial market in which the financial company participates, or the financial company itself, poses a threat to the financial stability of the United States,” says the bill.