Secret Storm, 1984

On a quiet day on Capitol Hill two years ago, an apparently innocuous piece of legislation completed its journey through Congress and was shortly signed into law. The Bank Secrecy Act, yawningly endorsed by many bankers, was intended to help the Government curb tax cheaters and Mafia magnates by reducing the illegal flow of money to foreign banks. At the time there was almost no opposition to and precious little interest in the law. Today it is at the center of banking's biggest brouhaha in years.

In a desperate fight to quash the law, leaders of the banking establishment have been joined by lawyers from the American Civil Liberties Union. The problem, those strange bedfellows agree, is a set of chillingly Orwellian regulations that the Treasury has drawn up to implement the law. According to the rules, banks must: microfilm the front and back of virtually every check that each U.S. citizen writes; store those records for five years in case Government gumshoes ever want a look at them (without notification to the person being investigated); keep records of every non-real estate loan of more than $5,000 made to an individual; keep records of every transfer of more than $10,000 to places outside the U.S.; report to the Government any deposit or withdrawal of more than $10,000 from a personal checking account and any foreign deposit or withdrawal of more than $5,000. In addition, Americans who travel abroad with more than $5,000 in cash or traveler's checks must notify the Treasury Department before they leave, or risk up to five years in jail or a $10,000 fine. Treasury investigators can pass along to other Government agencies any of the personal financial records that they dig up.

Witch Hunt. Bankers complain that the new record keeping requirements will cost them a fortune. For example, the Bank of America's burden, its officers estimate, would be at least $500,-000 a year. Attorneys for the American Civil Liberties Union fear that bankers will be asked to turn over their personal financial information for use in political witch hunts. "The act attempts to make bankers the spies of the Government," says Charles Marson, head of the A.C.L.U.'s northern California legal division. "It is a total invasion of privacy."

The California Bankers Association and the A.C.L.U. recently filed separate suits to prevent the regulations from taking effect as scheduled on July 1, charging that the law violates the constitutional protection against unreasonable search and seizure. Last week a federal judge in California granted a temporary order suspending the law until a three-judge panel can rule next week on its constitutionality. Meanwhile, bankers have to keep the records, but Senator John Tunney has vowed to introduce a bill to prohibit them from handing out financial information without either a customer's consent or a court order.

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