What happens when one of the most irresistible of contemporary regulatory trends -- the continued chipping away of financial privacy -- runs into one of the most formidable of interest groups, organized lawyerdom? The lawyers resist, and in this case the lawyers are right:
ABA President Hilarie Bass is expressing concerns that an anti-money laundering bill would undermine the attorney-client privilege and impose “burdensome and intrusive regulations” on small businesses and their lawyers.
In a letter to leaders of the Senate Judiciary Committee, Bass asks the committee to oppose the bill, known as the TITLE Act for True Incorporation Transparency for Law Enforcement, according to an ABA press release.
The ABA opposes provisions that would regulate many lawyers and law firms as financial institutions under the Bank Secrecy Act when they help clients to establish small corporations and limited liability companies.
The bill would require small businesses and their lawyers to gather extensive beneficial ownership information on businesses when they incorporate. The information would be held and disclosed on request to many governmental agencies and financial institutions.
Sponsors of S. 1454, or the TITLE Act (for True Incorporation Transparency for Law Enforcement) include Sen. Chuck Grassley (R-Iowa), Dianne Feinstein (D-Calif.), and Sheldon Whitehouse (D-R.I.)
Concerns about erosion of attorney-general privilege have played a role in resisting numerous bad regulatory and prosecutorial initiatives in recent years, including the Obama Labor Department's abysmal "persuader rule" proposal; proposals to forbid targets of Consumer Financial Protection Board investigatory letters from disclosing that they are under CFPB investigation; and calls for inculcating client disloyalty among lawyers who handle environmental matters for corporations. See also this paper from the ABA's Larson Frisby for the Washington Legal Foundation on white-collar prosecution and attorney-client privilege.
Now if only the rest of us who are not lawyers could get someone to stand up so effectively against the government on behalf of our privacy interests.