Thursday, December 08, 2005

Brakes on the "Patriot Act"?

You may have heard that Congress re-extended the "Patriot Act." This egregious curtailment of civil rights may finally have hit a stumbling block, though, and you can thank the lawyers. The Gramm-Leach-Bliley Act regulates financial institutions and contains some significant privacy provisions. The Federal Trade Commission wanted to enforce those provisions against lawyers, especially in real estate settlements. Since lawyers already operate under a pretty strict set of privacy rules, and since those rules are not always consistent with GLB, the American Bar Association took the FTC to court, challenging its authority to enforce the privacy provisions. Tuesday the DC Circuit ruled that the FTC has no authority to regulate the practice of law and so may not enforce the GLB against attorneys.

Where does the "Patriot Act" come in? The Treasury Department is trying to enforce the Section 352 money-laundering provisions against lawyers by using the same sort of jurisdictional logic as the FTC used, and Treasury shouldn't be any more successful than the FTC was. Expect this challenge to come shortly.


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