Comptroller of the Currency John D. Hawke Jr. told Congress Thursday that the highly controversial know-your-customer proposal should be abandoned.

Citing concerns over customer privacy, competitive disparities between banks and nonbanks, and financial burdens on small institutions, Mr. Hawke told a House Judiciary subcommittee that the anti-money-laundering proposal should be withdrawn after the March 8 deadline for public comment and not replaced.

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