I recently applied for a home mortgage on a new property. This is the second time I have bought a house. I was familiar (though it has been 8 years so I am by no means saying I remembered all of the paperwork I signed at the time) with the process from having bought a house before. About half way through the process a waiver is handed to me to sign. This isn’t out of the norm as many of the papers are authorizing the mortgage company to run your credit, review financial statements, and such. What caught me off guard was the heading; Patriot Act Disclosure. I think my wife heard my jaw hitting the floor and before I could get the words “what the bloody hell is this?” or something equally colorful my wife asks “What is this all about? How does a mortgage have to do with the Patriot Act?” The lender has no doubt heard this before so he responded that one of the provisions of the Patriot Act required that they provide identifying date to various agencies prior to approval for a mortgage. This means that before a lender (a private institution) seeking to conduct business (enter into voluntary contract) with a private individual must seek governmental approval. What the bloody hell? Have I woken up into a Kafkaesque version of America? It’s almost as if I am living in The Trial. The only difference is it is not some obscure governmental body that is putting the boot to my neck, but the Federal government in partnership with a private banking institution shrouded in secrecy (The Federal Reserve), and all in the name of security.
If you google “patriot act mortgage disclosure” the first page linked provides this explanation:
Patriot Act Disclosure
IMPORTANT INFORMATION ABOUT PROCEDURES FOR OPENING A NEW MORTGAGE LOAN ACCOUNT
To help the government fight the funding of terrorism and money laundering activities, Federal law requires all financial institutions to obtain, verify and record information that identifies each person who opens a mortgage loan account.
What this means to you: When you open a mortgagee loan account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may ask to see your driver’s license or other identifying documents.
The information being requested and observed is for compliance with the requirements of Section 326 of the USA Patriot Act implementing customer identification and verification requirements.
I would have stated the “What this means to you” portion slightly differently. I would have pointed out that what this means is that your name is now going to be logged and run against a database of names compiled under total secrecy by agencies operating without warrants gathering information about people without their knowledge and should you match up with one of the countless names on those secret lists you will be denied a business transaction without due process of law. That’s a bit of a mouthful. It could be shortened to state “This means you could have your 4th amendment rights violated, you could be barred from a legal transaction, and may never know about the reasoning, all to ensure the real terrorists maintain power.” Then again I guess that last bit might be seen as too extreme to be posted on a website (oops!).
Upon reading the Final Rule one can’t help but notice that one of the agencies tasked with enforcement of section 326 of the US Patriot Ace is the Federal Reserve Board (I have been unsuccessful finding the actual text of Section 326 to this point). One might wonder how The Federal Reserve (and the National Credit Union Administration) became part of the final rule on legislation that is so pervasive, but understanding the history of banking and politics (perhaps a future blog topic) would clear away any wonder or doubt.
So to recap; a mortgage loan is a business transaction entered into willingly by private parties (with the exception of Fannie Mae and Freddie Mac), The Patriot Act is an unConstitutional piece of legislation that grants the Federal government sweeping power to circumvent Constitutionally protected fundamental rights, various governmental agencies have amassed databases of names deemed to be either terrorist threats or potential terrorist threats, your name may be placed on those lists without your knowledge and without you ever having the chance to be aware of that, those lists have gathered names of people from anti-war protesters to TEA Party rally attendees to End the Fed supporters, under provisions in The Patriot Act one can be denied a lawful business transaction without due process and without the opportunity to face one’s accuser. This means that should you oppose an administration your name may end up on a list and remain there. When a new administration takes power a new set of names are added and the old ones remain. How long until we are all on one of these lists? This is what happens when legislation is passed without transparency. We find little nuggets years and years later that have sweeping impact on out lives.
Welcome to Amerika comrade.