- Though e-mail has historically been viewed
as ineffective in influencing 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
number 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
potential money-launders. More than 80 percent of those comments, about
205,000, arrived by e-mail. About 50 comments favored the proposal.
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- 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 meeting in Washington on Tuesday with the
Board of Governors of the Federal Reserve, the Comptroller of the Currency
and the Office of Thrift Supervision.
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- "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."
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- 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.
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- "That the FDIC allowed their decision
to be weighted so heavily by e-mail 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 by e-mail efforts." The FDIC
actively incorporated the Internet into its deliberations on the "Know
Your Customer" proposal. The agency added Web pages to describe the
proposal and set up an e-mail box just for comments 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 the comments. The
agency also issued weekly reports that summarized the comments.
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- "It's important to note that a number
of these e-mails were customized," Tanoue said. "They came from
the heart."
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- In the past, before opening access through
e-mail, the FDIC would receive only a few hundred comments on even the
most controversial regulations, and those comments generally came from
banking officials.
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- "Typically the comments we hear
are packaged in Washington -- and these [e-mail comments] came from all
over America," said Steve Katsanos, a spokesman for the FDIC.
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- "We think it's pretty neat,"
he said of the Internet-based interaction. "You might well count on
this being a standard procedure."
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- The e-mail and the traffic to the FDIC's
Web site was driven through media reports on the issue in traditional media
and through an online advocacy campaign sponsored by the Libertarian Party.
The proposal was a hot topic on talk radio, and the broadcasts often mentioned
the FDIC's Web site or e-mail addresses.
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- 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 notice to friends. That notice also
advised people not to spam the agency, but to send thoughtful comments.
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- "It operated like an Internet chain
letter," said Bill Winter, spokesman for the party. "It had this
organic, geometric growth."
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- Ultimately, he said, people used the
party's advocacy site to send 171,000 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 140,000 people who asked to receive updates
on privacy issues, he said.
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- The advocacy site will remain active
to lobby for a bill in Congress that would prevent Federal regulators from
mandating other programs to monitor bank transactions. Some banks have
started their own programs to monitor transactions, and the "Know
Your Customer" proposal originated because banks were looking for
Federal guidelines on the matter.
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- "They don't want to see themselves
in a newspaper article as a conduit for money- laundering," Katsanos
said.
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- So, because the issue has not been put
to rest, the Libertarians say their campaign will continue. To Winter,
this week's victory challenges the conventional wisdom that e-mail carries
little influence.
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- "E-mail can have the impact of a
sledgehammer on public policy," he said. "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."
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- Even so, generating e-mail and creating
work for government can be problematic from a Libertarian perspective.
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- "Our worst nightmare as Libertarians,"
Winter said, "is that we might have caused them to spend more money
and hire more employees to monitor the public comment."
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