If this act is passed, I know what my response will be. I will promptly withdraw all my monies from any institution that follows these regulations, refuse to do any sort of business with them, and urge all my friends and family to do the same. I know that many others will do the same without hesitation.
Today I called the manager of the branch where I have account (for many years) and asked him about "Know your customer" thingy and reporting that they currently do. He seemed knowledgable to a certain extent about this matter, and assured me that today they report only the $10K+ cash transactions. Then I told him that I will take my business elsewhere should they decide to offer "know your customer" service to the government and asked him nicely to relay my stand to his manager. Call them. These people make living from your money.