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6500 - Consumer Protection
{{6-30-04 p.7091}}
FINANCIAL INSTITUTIONS REGULATORY AND
INTEREST RATE
CONTROL ACT OF 1978
TITLE XI—RIGHT TO FINANCIAL PRIVACY
* * * * *
SEC. 1100. This title may be cited as the "Right to Financial
Privacy Act of 1978".
[Codified to 12 U.S.C. 3401 note]
[Source: Section 1100 of title XI of the Act of November
10, 1978 (Pub L. No. 95--630; 92 Stat. 3697), effective March 10,
1979]
DEFINITIONS
SEC. 1101. For the purpose of this title, the term--
(1) "financial institution", except as provided in section
1114, means any office of a bank, savings bank, card issuer as defined
in section 103 of the Consumers Credit Protection Act
(15 U.S.C. 1602(n)), industrial
loan company, trust company, savings association, building and loan, or
homestead association (including cooperative banks), credit union, or
consumer finance institution, located in any State or territory of the
United States, the District of Columbia, Puerto Rico, Guam, American
Samoa, or the Virgin Islands;
(2) "financial record" means an original of, a copy of, or
information known to have been derived from, any record held by a
financial institution pertaining to a customer's relationship with the
financial institution;
(3) "Government authority" means any agency or department
of the United States, or any officer, employee, or agent thereof;
(4) "person" means an individual or a partnership of five
or fewer individuals;
(5) "customer" means any person or authorized
representative of that person who utilized or is utilizing any service
of a financial institution, or for whom a financial institution is
acting or has acted as a fiduciary, in relation to an account mantained
in the person's name;
(6) "holding company" means--
(A) any bank holding company (as defined in
section 2 of the Bank Holding
Company Act of 1956);
(B) any company described in
section 4(f)(1) of the Bank
Holding Company Act of 1956; and
(C) any savings and loan holding company (as defined in the Home
Owners' Loan Act);
(7) "supervisory agency" means with respect to any
particular financial institution, holding company, or any subsidiary of
a financial institution or holding company, any of the following which
has statutory authority to examine the financial condition, business
operations, or records or transactions of that institution, holding
company, or subsidiary--
(A) the Federal Deposit Insurance Corporation;
(B) the Director, Office of Thrift Supervision;
(C) the National Credit Union Administration;
(D) the Board of Governors of the Federal Reserve System;
(E) the Comptroller of the Currency;
(F) the Securities and Exchange Commission;
(G) the Commodity Futures Trading Commission;
(H) the Secretary of the Treasury, with respect to the Bank
Secrecy Act and the Currency and Foreign Transactions Reporting Act
(Public Law 91--508, title I and II); or
(I) any State banking or securities department or agency; and
(8) "law enforcement inquiry" means a lawful investigation
or official proceeding inquiring into a violation of, or failure to
comply with, any criminal or civil statute or any regulation, rule, or
order issued pursuant thereto.
[Codified to 12 U.S.C. 3401]
{{6-30-04 p.7092}}
[Source: Section 1101 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3697), effective March 10, 1979; as
amended by sections 744(b) of title VII and 941 of title IX of the Act
of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 438 and 496,
respectively), effective August 9, 1989; section 2596(c) of title XXV
of the Act of November 29, 1990 (Pub. L. No. 101--647; 104 Stat. 4908),
effective November 29, 1990; section 727(b)(1) of title VII of the Act
of November 12, 1999 (Pub. L. No. 106-102; 113 Stat. 1475), effective
November 12, 1999; section 374(b) of title II of the Act of December
13, 2003 (Pub. L. No. 108--177; 117 Stat. 2628), effective December 13,
2003]
CONFIDENTIALITY OF RECORDS—GOVERNMENT
AUTHORITIES
SEC. 1102. Except as provided by section 1103(c) or (d), 1113, or
1114, no Government authority may have access to or obtain copies of,
or the information contained in the financial records of any customer
from a financial institution unless the financial records are
reasonably described and--
(1) such customer has authorized such disclosure in accordance
with section 1104;
(2) such financial records are disclosed in response to an
administrative subpena or summons which meets the requirements of
section 1105;
(3) such financial records are disclosed in response to a search
warrant which meets the requirements of section 1106;
(4) such financial records are disclosed in response to a
judicial subpena which meets the requirements of section 1107; or
(5) such financial records are disclosed in response to a formal
written request which meets the requirements of section 1108.
[Codified to 12 U.S.C. 3402]
[Source: Section 1102 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3697), effective March 10,
1979]
CONFIDENTIALITY OF RECORDS—FINANCIAL
INSTITUTIONS
SEC. 1103. (a) No financial institution, or officer, employees, or
agent of a financial institution, may provide to any Government
authority access to or copies of, or the information contained in, the
financial records of any customer except in accordance with the
provisions of this title.
(b) A financial institution shall not release the financial records
of a customer until the Government authority seeking such records
certifies in writing to the financial institution that it has complied
with the applicable provisions of this title.
(c) Nothing in this title shall preclude any financial institution,
or any officer, employee, or agent of a financial institution, from
notifying a Government authority that such institution, or officer,
employee, or agent has information which may be relevant to a possible
violation of any statute or regulation. Such information may include
only the name or other identifying information concerning any
individual, corporation, or account involved in and the nature of any
suspected illegal activity. Such information may be disclosed
notwithstanding any constitution, law, or regulation of any State or
political subdivision thereof to the contrary. Any financial
institution, or officer, employee, or agent thereof, making a
disclosure of information pursuant to this subsection, shall not be
liable to the customer under any law or regulation of the United States
or any constitution, law, or regulation of any State or political
subdivision thereof, for such disclosure or for any failure to notify
the customer of such disclosure.
(d)(1) Nothing in this title shall preclude a financial
institution, as an incident to perfecting a security interest, proving
a claim in bankruptcy, or otherwise collecting on a debt owing either
to the financial institution itself or in its role as a fiduciary, from
providing copies of any financial record to any court or Government
authority.
(2) Nothing in this title shall preclude a financial institution,
as an incident to processing an application for assistance to a
customer in the form of a Government loan, loan guaranty, or loan
insurance agreement, or as an incident to processing a default on, or
administering, a Government guaranteed or insured loan, from initiating
contact with an
{{4-28-00 p.7093}}appropriate Government authority for the
purpose of providing any financial record necessary to permit such
authority to carry out its responsibilities under a loan, loan
guaranty, or loan insurance agreement.
[Codified to 12 U.S.C. 3403]
[Source: Section 1103 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3698), effective March 10, 1979; as
amended by section 1353(a) of subtitle H of title I of the Act of
October 27, 1986 (Pub. L. No. 99--570; 100 Stat. 3207--21), effective
October 27, 1986; and section 6186(a) of title VI of the Act of
November 18, 1988 (Pub. L. No. 100--690; 102 Stat. 4357), effective
November 18, 1988]
CUSTOMER AUTHORIZATIONS
SEC. 1104. (a) A customer may authorize disclosure under section
1102(1) if he furnishes to the financial institution and to the
Government authority seeking to obtain such disclosure a signed and
dated statement which--
(1) authorizes such disclosure for a period not in excess of
three months;
(2) states that the customer may revoke such authorization at any
time before the financial records are disclosed;
(3) identifies the financial records which are authorized to be
disclosed;
(4) specifies the purposes for which, and the Government
authority to which, such records may be disclosed; and
(5) states the customer's rights under this title.
(b) No such authorization shall be required as a condition of doing
business with any financial institution.
(c) The customer has the right, unless the Government authority
obtains a court order as provided in section 1109, to obtain a copy
of the record which the financial institution shall keep of all
instances in which the customer's record is disclosed to a Government
authority pursuant to this section, including the identity of the
Government authority to which such disclosure is made.
[Codified to 12 U.S.C. 3404]
[Source: Section 1104 of title XI of the Act of November 10, 1978
(Pub. L. No. 95-630; 92 Stat. 3698), effective March 10, 1979; section
1104(d) repealed by the Act of March 7, 1979 (Pub. L. No. 96-3; 93
Stat. 5)]
ADMINISTRATIVE SUBPENA AND SUMMONS
SEC. 1105. A Government authority may obtain financial records
under section 1102(2) pursuant to an administrative subpena or summons
otherwise authorized by law only if--
(1) there is reason to believe that the records sought are
relevant to a legitimate law enforcement inquiry;
(2) a copy of the subpena or summons has been served upon the
customer or mailed to his last known address on or before the date on
which the subpena or summons was served on the financial institution
together with the following notice which shall state with reasonable
specificity the nature of the law enforcement inquiry:
"Records or information concerning your transactions held by
the financial institution named in the attached subpena or summons are
being sought by this (agency or department) in accordance with the
Right to Financial Privacy Act of 1978 for the following purpose: If
you desire that such records or information not be made available, you
must:
"1. Fill out the accompanying motion paper and sworn statement
or write one of your own, stating that you are the customer whose
records are being requested by the Government and either giving the
reasons you believe that the records are not relevant to the legitimate
law enforcement inquiry stated in this notice or any other legal basis
for objecting to the release of the records.
{{4-28-00 p.7094}}
"2. File the motion and statement by mailing or delivering
them to the clerk of any one of the following United States district
courts:
"3. Serve the Government authority requesting the records by
mailing or delivering a copy of your motion and statement to
"4. Be prepared to come to court and present your position in
further detail.
"5. You do not need to have a lawyer, although you may wish to
employ one to represent you and protect your rights. If you do not
follow the above procedures, upon the expiration of ten days from the
date of service or fourteen days from the date of mailing of this
notice, the records or information requested therein will be made
available. These records may be transferred to other Government
authorities for legitimate law enforcement inquiries, in which event
you will be notified after the transfer." ; and
(3) ten days have expired from the date of service of the notice
or fourteen days have expired from the date of mailing the notice to
the customer and within such time period the customer has not filed a
sworn statement and motion to quash in an appropriate court, or the
customer challenge provisions of section 1110 have been complied with.
[Codified to 12 U.S.C. 3405]
[Source: Section 1105 of title XI of the Act of November 10, 1978
(Pub. L. No. 95-630; 92 Stat. 3699), effective March 10, 1979]
SEARCH WARRANTS
SEC. 1106. (a) A Government authority may obtain financial records
under section 1102(3) only if it obtains a search warrant pursuant to
the Federal Rules of Criminal Procedure.
(b) No later than ninety days after the Government authority serves
the search warrant, it shall mail to the customer's last known address
a copy of the search warrant together with the following notice:
"Records or information concerning your transactions held by the
financial institution named in the attached search warrant were
obtained by this (agency or department) on (date) for the following
purpose: You may have rights under the Right to Financial Privacy
Act of 1978."
(c) Upon application of the Government authority, a court may grant
a delay in the mailing of the notice required in subsection (b), which
delay shall not exceed one hundred and eighty days following the
service of the warrant, if the court makes the findings required in
section 1109(a). If the court so finds, it shall enter an ex parte
order granting the requested delay and an order prohibiting the
financial institution from disclosing that records have been obtained
or that a search warrant for such records has been executed. Additional
delays of up to ninety days may be granted by the court upon
application, but only in accordance with this subsection. Upon
expiration of the period of delay of notification of the customer, the
following notice shall be mailed to the customer along with a copy of
the search warrant:
"Records or information concerning your transactions held by the
financial institution named in the attached search warrant were
obtained by this (agency or department) on (date). Notification was
delayed beyond the statutory ninety-day delay period pursuant to a
determination by the court that such notice would seriously jeopardize
an investigation concerning You may have rights under the Right to
Financial Privacy Act of 1978."
[Codified to 12 U.S.C. 3406]
[Source: Section 1106 of title XI of the Act of November 10, 1978
(Pub. L. No. 95-630; 92 Stat. 3700), effective March 10, 1979]
JUDICIAL SUBPENA
SEC. 1107. A Government authority may obtain financial records
under section 1102(4) pursuant to judicial subpena only if--
{{4-28-00 p.7095}}
(1) such subpena is authorized by law and there is reason to
believe that the records sought are relevant to a legitimate law
enforcement inquiry;
(2) a copy of the subpena has been served upon the customer or
mailed to his last known address on or before the date on which the
subpena was served on the financial institution together with the
following notice which shall state with reasonable specificity the
nature of the law enforcement inquiry:
"Records or information concerning your transactions which are
held by the financial institution named in the attached subpena are
being sought by this (agency or department or authority) in accordance
with the Right to Financial Privacy Act of 1978 for the following
purpose: If you desire that such records or information not be made
available, you must:
"1. Fill out the accompanying motion paper and sworn statement
or write one of your own, stating that you are the customer whose
records are being requested by the Government and either giving the
reasons you believe that the records are not relevant to the legitimate
law enforcement inquiry stated in this notice or any other legal basis
for objecting to the release of the records.
"2. File the motion and statement by mailing or delivering
them to the clerk of the Court.
"3. Serve the Government authority requesting the records by
mailing or delivering a copy of your motion and statement to
"4. Be prepared to come to court and present your position in
further detail.
"5. You do not need to have a lawyer, although you may wish to
employ one to represent you and protect your rights. If you do not
follow the above procedures, upon the expiration of ten days from the
date of service or fourteen days from the date of mailing of this
notice, the records or information requested therein will be made
available. These records may be transferred to other government
authorities for legitimate law enforcement inquiries, in which event
you will be notified after the transfer;" and
(3) ten days have expired from the date of service or fourteen
days from the date of mailing of the notice to the customer and within
such time period the customer has not filed a sworn statement and
motion to quash in an appropriate court, or the customer challenge
provisions of section 1110 have been complied with.
[Codified to 12 U.S.C. 3407]
[Source: Section 1107 of title XI of the Act of November
10, 1978 (Pub. L. No. 95-630; 92 Stat. 3700), effective March 10,
1979]
FORMAL WRITTEN REQUEST
SEC. 1108. A Government authority may request financial records
under section 1102(5) pursuant to a formal written request only if--
(1) no administrative summons or subpena authority reasonably
appears to be available to that Government authority to obtain
financial records for the purpose for which such records are sought;
(2) the request is authorized by regulations promulgated by the
head of the agency or department;
(3) there is reason to believe that the records sought are
relevant to a legitimate law enforcement inquiry; and
(4)(A) a copy of the request has been served upon the customer or
mailed to his last known address on or before the date on which the
request was made to the financial institution together with the
following notice which shall state with reasonable specificity the
nature of the law enforcement inquiry:
"Records or information concerning your transactions held by
the financial institution named in the attached request are being
sought by this (agency or department) in accordance with the Right to
Financial Privacy Act of 1978 for the following purpose:
"If you desire that such records or information not be made
available, you must:
"1. Fill out the accompanying motion paper and sworn statement
or write one of your own, stating that you are the customer whose
records are being requested by the
{{4-28-00 p.7096}}Government and either giving the reasons you
believe that the records are not relevant to the legitimate law
enforcement inquiry stated in this notice or any other legal basis for
objecting to the release of the records.
"2. File the motion and statement by mailing or delivering
them to the clerk of any one of the following United States District
Courts:
"3. Serve the Government authority requesting the records by
mailing or delivering a copy of your motion and statement to .
"4. Be prepared to come to court and present your position in
further detail.
"5. You do not need to have a lawyer, although you may wish to
employ one to represent you and protect your rights.
If you do not follow the above procedures, upon the expiration of ten
days from the date of service or fourteen days from the date of mailing
of this notice, the records or information requested therein may be
made available. These records may be transferred to other Government
authorities for legitimate law enforcement inquiries, in which event
you will be notified after the transfer;" and
(B) ten days have expired from the date of service or fourteen
days from the date of mailing of the notice by the customer and within
such time period the customer has not filed a sworn statement and an
application to enjoin the Government authority in an appropriate court,
or the customer challenge provisions of section 1110 have been complied
with.
[Codified to 12 U.S.C. 3408]
[Source: Section 1108 of title XI of the Act of November
10, 1978 (Pub. L. No. 95-630; 92 Stat. 3701), effective March 10,
1979]
DELAYED NOTICE— PRESERVATION OF RECORDS
SEC. 1109. (a) Upon application of the Government authority, the
customer notice required under section 1104(c), 1105(2), 1106(c),
1107(2), 1108(4), or 1112(b) may be delayed by order of an appropriate
court if the presiding judge or magistrate finds that--
(1) the investigation being conducted is within the lawful
jurisdiction of the Government authority seeking the financial records;
(2) there is reason to believe that the records being sought are
relevant to a legitimate law enforcement inquiry; and
(3) there is reason to believe that such notice will result in--
(A) endangering life or physical safety of any person;
(B) flight from prosecution;
(C) destruction of or tampering with evidence;
(D) intimidation of potential witnesses; or
(E) otherwise seriously jeopardizing an investigation or official
proceeding or unduly delaying a trial or ongoing official proceeding to
the same extent as the circumstances in the preceding subparagraphs.
An application for delay must be made with reasonable specificity.
(b)(1) If the court makes the findings required in paragraphs (1),
(2), and (3) of subsection (a), it shall enter an ex parte order
granting the requested delay for a period not to exceed ninety days and
an order prohibiting the financial institution from disclosing that
records have been obtained or that a request for records has been made,
except that, if the records have been sought by a Government authority
exercising financial controls over foreign accounts in the United
States under section 5(b) of the Trading with the Enemy Act (50 U.S.C.
App. 5(b)), the International Emergency Economic Powers Act (title II,
Public Law 95-223), or section 5 of the United Nations Participation
Act (22 U.S.C. 287c), and the court finds that there is reason to
believe that such notice may endanger the lives or physical safety of a
customer or group of customers, or any person or group of persons
associated with a customer, the court may specify that the delay be
indefinite.
(2) Extensions of the delay of notice provided in paragraph (1)
of up to ninety days each may be granted by the court upon application,
but only in accordance with this subsection.
{{12-31-01 p.7097}}
(3) Upon expiration of the period of delay of notification under
paragraph (1) or (2), the customer shall be served with or mailed a
copy of the process or request together with the following notice which
shall state with reasonable specificity the nature of the law
enforcement inquiry:
"Records or information concerning your transactions which are
held by the financial institution named in the attached process or
request were supplied to or requested by the Government authority named
in the process or request on (date). Notification was withheld pursuant
to a determination by the (title of court so ordering) under the Right
to Financial Privacy Act of 1978 that such notice might (state
reason). The purpose of the investigation or official proceeding was
[ ]."
(c) When access to financial records is obtained pursuant to
section 1114(b) (emergency access), the Government authority shall,
unless a court has authorized delay of notice pursuant to subsections
(a) and (b), as soon as practicable after such records are obtained
serve upon the customer, or mail by registered or certified mail to his
last known address, a copy of the request to the financial institution
together with the following notice which shall state with reasonable
specificity the nature of the law enforcement inquiry:
"Records concerning your transactions held by the financial
institution named in the attached request were obtained by (agency or
department) under the Right to Financial Privacy Act of 1978 on (date)
for the following purpose: Emergency access to such records was
obtained on the grounds that (state grounds)."
(d) Any memorandum, affidavit, or other paper filed in connection
with a request for delay in notification shall be preserved by the
court. Upon petition by the customer to whom such records pertain, the
court may order disclosure of such papers to the petitioner unless the
court makes the findings required in subsection (a).
[Codified to 12 U.S.C. 3409]
[Source: Section 1109 of title XI of the Act of November 10, 1978
(Pub. L. No. 95-630; 92 Stat. 3702), effective March 10, 1979]
CUSTOMER CHALLENGE PROVISIONS
SEC. 1110. (a) Within ten days of service or within fourteen days
of mailing of a subpena, summons, or formal written request, a customer
may file a motion to quash an administrative summons or judicial
subpena, or an application to enjoin a Government authority from
obtaining financial records pursuant to a formal written request, with
copies served upon the Government authority. A motion to quash a
judicial subpena shall be filed in the court which issued the subpena.
A motion to quash an administrative summons or an application to enjoin
a Government authority from obtaining records pursuant to a formal
written request shall be filed in the appropriate United States
district court. Such motion or application shall contain an affidavit
or sworn statement--
(1) stating that the applicant is a customer of the financial
institution from which financial records pertaining to him have been
sought; and
(2) stating the applicant's reasons for believing that the
financial records sought are not relevant to the legitimate law
enforcement inquiry stated by the Government authority in its notice,
or that there has not been substantial compliance with the provisions
of this title.
Service shall be made under this section upon a Government authority
by delivering or mailing by registered or certified mail a copy of the
papers to the person, office, or department specified in the notice
which the customer has received pursuant to this title. For the
purposes of this section, "delivery" has the meaning stated in
rule 5(b) of the Federal Rules of Civil Procedure.
(b) If the court finds that the customer has complied with
subsection (a), it shall order the Government authority to file a sworn
response, which may be filed in camera if the Government includes in
its response the reasons which make in camera review appropriate. If
the court is unable to determine the motion or application on the basis
of the parties' initial allegations and response, the court may conduct
such additional proceedings as it
{{12-31-01 p.7098}}deems appropriate. All such proceedings
shall be completed and the motion or application decided within seven
calendar days of the filing of the Government's response.
(c) If the court finds that the applicant is not the customer to
whom the financial records sought by the Government authority pertain,
or that there is a demonstrable reason to believe that the law
enforcement inquiry is legitimate and a reasonable belief that the
records sought are relevant to that inquiry, it shall deny the motion
or application, and, in the case of an administrative summons or court
order other than a search warrant, order such process enforced. If the
court finds that the applicant is the customer to whom the records
sought by the Government authority pertain, and that there is not a
demonstrable reason to believe that the law enforcement inquiry is
legitimate and a reasonable belief that the records sought are relevant
to that inquiry, or that there has not been substantial compliance with
the provisions of this title, it shall order the process quashed or
shall enjoin the Government authority's formal written request.
(d) A court ruling denying a motion or application under this
section shall not be deemed a final order and no interlocutory appeal
may be taken therefrom by the customer. An appeal of a ruling denying a
motion or application under this section may be taken by the customer
(1) within such period of time as provided by law as part of any appeal
from a final order in any legal proceeding initiated against him
arising out of or based upon the financial records, or (2) within
thirty days after a notification that no legal proceeding is
contemplated against him. The Government authority obtaining the
financial records shall promptly notify a customer when a determination
has been made that no legal proceeding against him is contemplated.
After one hundred and eighty days from the denial of the motion or
application, if the Government authority obtaining the records has not
initiated such a proceeding, a supervisory official of the Government
authority shall certify to the appropriate court that no such
determination has been made. The court may require that such
certifications be made, at reasonable intervals thereafter, until
either notification to the customer has occurred or a legal proceeding
is initiated as described in clause (A).
(e) The challenge procedures of this title constitute the sole
judicial remedy available to a customer to oppose disclosure of
financial records, examination reports pursuant to law.
(f) Nothing in this title shall enlarge or restrict any rights of a
financial institution to challenge requests for records made by a
Government authority under existing law. Nothing in this title shall
entitle a customer to assert the rights of a financial institution.
[Codified to 12 U.S.C. 3410]
[Source: Section 1110 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3703), effective March 10, 1979; as
amended by section 231(b)(2) of title II of the Act of November 12,
1999 (Pub. L. No. 106--102; 113 Stat. 1407), effective May 12, 2000]
DUTY OF FINANCIAL INSTITUTIONS
SEC. 1111. Upon receipt of a request for financial records made by
a Government authority under section 1105 or 1107, the financial
institution shall, unless otherwise provided by law, proceed to
assemble the records requested and must be prepared to deliver the
records to the Government authority upon receipt of the certificate
required under section 1103(b).
[Codified to 12 U.S.C. 3411]
[Source: Section 1111 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3705), effective March 10, 1979]
USE OF INFORMATION
SEC. 1112. (a) Financial records originally obtained pursuant to
this title shall not be transferred to another agency or department
unless the transferring agency or department certifies in writing that
there is reason to believe that the records are relevant to a
legitimate law enforcement inquiry, or intelligence or
counterintelligence activity, investigation or analysis related to
international terrorism after within the jurisdiction of the receiving
agency or department.
{{2-28-07 p.7099}}
(b) When financial records subject to this title are transferred
pursuant to subsection (a), the transferring agency or department
shall, within fourteen days, send to the customer a copy of the
certification made pursuant to subsection (a) and the following notice,
which shall state the nature of the law enforcement inquiry with
reasonable specificity: "Copies of, or information contained in,
your financial records lawfully in possession of [ ] have been
furnished to [ ] pursuant to the Right of Financial Privacy Act of
1978 for the following purpose: [ ]. If you believe that this
transfer has not been made to further a legitimate law enforcement
inquiry, you may have legal rights under the Financial Privacy Act of
1978 or the Privacy Act of 1974."
(c) Notwithstanding subsection (b), notice to the customer may be
delayed if the transferring agency or department has obtained a court
order delaying notice pursuant to section 1109(a) and (b) and that
order is still in effect, or if the receiving agency or department
obtains a court order authorizing a delay in notice pursuant to section
1109(a) and (b). Upon the expiration of any such period of delay, the
transferring agency or department shall serve to the customer the
notice specified in subsection (b) above and the agency or department
that obtained the court order authorizing a delay in notice pursuant to
section 1109(a) and (b) shall serve to the customer the notice
specified in section 1109(b).
(d) Nothing in this title prohibits any supervisory agency from
exchanging examination reports or other information with another
supervisory agency. Nothing in this title prohibits the transfer of a
customer's financial records needed by counsel for a Government
authority to defend an action brought by the customer. Nothing in this
title shall authorize the withholding of information by any officer or
employee of a supervisory agency from a duly authorized committee or
subcommittee of the Congress.
(e) Notwithstanding section 1101(6) or any other provision of this
title, the exchange of financial records or other information with
respect to a financial institution, holding company, or any subsidiary
of a depository institution or holding company, among and between the
five member supervisory agencies of the Federal Financial Institutions
Examination Council, the Securities and Exchange Commission, the
Federal Trade Commission, and the Commodity Futures Trading Commission
is permitted.
(f) TRANSFER TO ATTORNEY GENERAL.--
(1) IN GENERAL.--Nothing in this title shall apply when
financial records obtained by an agency or department of the United
States are disclosed or transferred to the Attorney General upon the
certification by a supervisory level official of the transferring
agency or department that--
(A) there is reason to believe that the records may be relevant
to a violation of Federal criminal law; and
(B) the records were obtained in the exercise of the agency's or
department's supervisory or regulatory functions.
(2) LIMITATION ON USE.--Records so transferred shall be
used only for criminal investigative or prosecutive purposes for civil
actions under section 951 of the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, or for forfeiture under sections
981 or 982 of title 18, United States Code by the Department of Justice
and shall, upon completion of the investigation or prosecution
(including any appeal), be returned only to the transferring agency or
department. No agency or department so transferring such records shall
be deemed to have waived any privilege applicable to those records
under law.
[Codified to 12 U.S.C. 3412]
[Source: Section 1112 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3705), effective March 10, 1979; as
amended by section 432(a) of title IV of the Act of October 15, 1982
(Pub. L. No. 97--320; 96 Stat. 1527), effective October 15, 1982;
section 6186(b) of title VI of the Act of November 18, 1988 (Pub. L.
No. 100--690; 102 Stat. 4357), effective November 18, 1988; section 944
of title IX of the Act of August 9, 1989 (Pub. L. No. 101--73; 103
Stat. 498), effective August 9, 1989; section 411(l) of
title IV of the Act of December 19, 1991 (Pub. L. No. 102--242; 105
Stat. 2375) effective
{{2-28-07 p.7100}}December 19, 1991; section 727(b)(2) of
title VII of the Act of November 12, 1999 (Pub. L. No. 106--102; 113
Stat. 1475), effective November 12, 1999; section 358(f)(1) of title
III of the Act of October 26, 2001 (Pub. L. No. 106--57; 115 Stat.
327), effective October 26, 2001; section 10 of the Act of December 12,
2006 (Pub. L. No. 109--455; 120 Stat. 3381), effective December 10,
2006]
EXCEPTIONS
SEC. 1113. (a) Nothing in this title prohibits the disclosure of
any financial records or information which is not identified with or
identifiable as being derived from the financial records of a
particular customer.
(b) This chapter shall not apply to the examination by or
disclosure to any supervisory agency of financial records or
information in the exercise of its supervisory, regulatory, or monetary
functions, including conservatorship or receivership functions, with
respect to any financial institution, holding company, subsidiary of a
financial institution or holding company, institution-affiliated party
(within the meaning of section
3(u) of the Federal Deposit Insurance Act) with respect to a
financial institution, holding company, or subsidiary, or other person
participating in the conduct of the affairs thereof.
(c) Nothing in this title prohibits the disclosure of financial
records in accordance with procedures authorized by the Internal
Revenue Code.
(d) Nothing in this title shall authorize the withholding of
financial records or information required to be reported in accordance
with any Federal statute or rule promulgated thereunder.
(e) Nothing in this title shall apply when financial records are
sought by a Government authority under the Federal Rules of Civil or
Criminal Procedure or comparable rules of other courts in connection
with litigation to which the Government authority and the customer are
parties.
(f) Nothing in this title shall apply when financial records are
sought by a Government authority pursuant to an administrative subpena
issued by an administrative law judge in an adjudicatory proceeding
subject to section 554 of title 5, United States Code, and to which the
Government authority and the customer are parties.
(g) The notice requirements of this title and section 1110 and 1112
shall not apply when a Government authority by a means described in
section 1102 and for a legitimate law enforcement inquiry is seeking
only the name, address, account number, and type of account of any
customer or ascertainable group of customers associated (1) with a
financial transaction or class of financial transactions, or (2) with a
foreign country or subdivision thereof in the case of a Government
authority exercising financial controls over foreign accounts in the
United States under section 5(b) of the Trading with the Enemy Act (50
U.S.C. App. 5(b)); the International Emergency Economic Powers Act
(title II, Public Law 95-223); or section 5 of the United Nations
Participation Act (22 U.S.C. 287(c)).
(h)(1) Nothing in this title (except sections 1103, 1117 and 1118)
shall apply when financial records are sought by a Government
authority--
(A) in connection with a lawful proceeding, investigation,
examination, or inspection directed at a financial institution (whether
or not such proceeding, investigation, examination, or inspection is
also directed at a customer) or at a legal entity which is not a
customer; or
(B) in connection with the authority's consideration or
administration of assistance to the customer in the form of a
Government loan, loan guaranty, or loan insurance program.
(2) When financial records are sought pursuant to this
subsection, the Government authority shall submit to the financial
institution the certificate required by section 1103(b). For access
pursuant to paragraph (1)(B), no further certification shall be
required for subsequent access by the certifying Government authority
during the term of the loan, loan guaranty, or loan insurance
agreement.
(3) After the effective date of this title, whenever a customer
applies for participation in a Government loan, loan guaranty, or loan
insurance program, the Government authority administering such program
shall give the customer written notice of the authority's access rights
under this subsection. No further notification shall be required for
subsequent access by that authority during the term of the loan, loan
guaranty, or loan insurance agreement.
{{10-31-08 p.7101}}
(4) Financial records obtained pursuant to this subsection may be
used only for the purpose for which they were originally obtained, and
may be transferred to another agency or department only when the
transfer is to facilitate a lawful proceeding, investigation,
examination, or inspection directed at a financial institution (whether
or not such proceeding, investigation, examination, or inspection is
also directed at a customer), or at a legal entity which is not a
customer, except that--
(A) nothing in this paragraph prohibits the use or transfer of a
customer's financial records needed by counsel representing a
Government authority in a civil action arising from a Government loan,
loan guaranty, or loan insurance agreement; and
(B) nothing in this paragraph prohibits a Government authority
providing assistance to a customer in the form of a loan, loan
guaranty, or loan insurance agreement from using or transferring
financial records necessary to process, service or foreclose a loan, or
to collect on an indebtedness to the Government resulting from a
customer's default.
(5) Notification that financial records obtained pursuant to this
subsection may relate to a potential civil, criminal, or regulatory
violation by a customer may be given to an agency or department with
jurisdiction over that violation, and such agency or department may
then seek access to the records pursuant to the provisions of this
title.
(6) Each financial institution shall keep a notation of each
disclosure made pursuant to paragraph (1)(B) of this subsection,
including the date of such disclosure and the Government authority to
which it was made. The customer shall be entitled to inspect this
information.
(i) Nothing in this title (except sections 1115 and 1120) shall
apply to any subpena or court order issued in connection with
proceedings before a grand jury, except that a court shall have
authority to order a financial institution, on which a grand jury
subpoena for customer records has been served, not to notify the
customer of the existence of the subpoena or information that has been
furnished to the grand jury, under the circumstances and for the period
specified and pursuant to the procedures established in section 1109 of
the Right to Financial Privacy Act of 1978
(12 U.S.C. 3409).
(j) Disclosure pursuant to proceeding, investigation, etc.,
instituted by Government Accountability Office and directed at a
government authority
This chapter shall not apply when financial records are sought by
the Government Accountability Office pursuant to an authorized
proceeding, investigation, examination or audit directed at a
government authority.
(k) Disclosure Necessary for Proper Administration of Programs
of Certain Government Authorities.--(l) Nothing in this title
shall apply to the disclosure by the financial institution of the name
and address of any customer to the Department of the Treasury, the
Social Security Administration, or the Railroad Retirement Board, where
the disclosure of such information is necessary to, and such
information is used solely for the purpose of, the proper
administration of section 1441 of the Internal Revenue Code of 1954,
title II of the Social Security Act, or the Railroad Retirement Act of
1974.
(2) Nothing in this title shall apply to the disclosure by the
financial institution of information contained in the financial records
of any customer to any Government authority that certifies, disburses,
or collects payments, where the disclosure of such information is
necessary to, and such information is used solely for the purpose of--
(A) verification of the identity of any person or proper routing
and delivery of funds in connection with the issuance of a Federal
payment or collection of funds by a Government authority; or
(B) the investigation or recovery of an improper Federal payment
or collection of funds or an improperly negotiated Treasure check.
(3) Notwithstanding any other provision of law, a request
authorized by paragraph (1) or (2) (and the information contained
therein) may be used by the financial institution or its agents solely
for the purpose of providing information contained in the financial
records of the customer to the Government authority requesting the
information, and the financial institution and its agents shall be
barred from redisclosure of such information. Any Government authority
receiving information pursuant to paragraph (1) or (2) may not disclose
or use the information, except for the purposes set forth in such
paragraph.
{{10-31-08 p.7102}}
(l) Crimes Against Financial Institutions by
Insiders.--Nothing in this title shall apply when any financial
institution or supervisory agency provides any financial record of any
officer, director, employee, or controlling shareholder (within the
meaning of subparagraph (A) or (B) of
section 2(a)(2) of the Bank
Holding Company Act of 1956 or subparagraph (A) or (B) of section
408(a)(2) of the National Housing Act) of such institution, or of any
major borrower from such institution or of any major borrower from such
institution who there is reason to believe may be acting in concert
with any such officer, director, employee, or controlling shareholder,
to the Attorney General of the United States, to a State law
enforcement agency, or, in the case of a possible violation of
subchapter II of chapter 53 of title 31, United States Code, to the
Secretary of the Treasury if there is reason to believe that such
record is relevant to a possible violation by such person of--
(1) any law relating to crimes against financial institutions or
supervisory agencies by directors, officers, employees, or controlling
shareholders of, or by borrowers from, financial institutions; or
(2) any provision of subchapter II of chapter 53 of title 31,
United States Code or of section
1956 or 1957 of title
18, United States Code.
No supervisory agency which transfers any such record under this
subsection shall be deemed to have waived any privilege applicable to
that record under law.
(m) This title shall not apply to the examination by or disclosure
to employees or agents of the Board of Governors of the Federal Reserve
System or any Federal Reserve bank of financial records or information
in the exercise of the Federal Reserve System's authority to extend
credit to the financial institutions or others.
(n) This title shall not apply to the examination by or disclosure
to the Resolution Trust Corporation or its employees or agents of
financial records or information in the exercise of its
conservatorship, receivership, or liquidation functions with respect to
a financial institution.
(o) This title shall not apply to the examination by or disclosure
to the Federal Housing Finance Agency or any of the federal home loan
banks of financial records or information in the exercise of the
Federal Housing Finance Agency's authority to extend credit (either
directly or through a federal home loan bank) to financial institutions
or others.
[Codified to 12 U.S.C. 3413]
[Source: Section 1113 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3706), effective March 10, 1979; as
amended by section 121(c)(3)(C) of the Act of April 20, 1983 (Pub. L.
No. 98--21; 97 Stat. 83), effective for benefits received after
December 31, 1983, in taxable years ending after such date; section
1353 of subtitle H of title I of the Act of October 27, 1986 (Pub. L.
No. 99--570; 100 Stat. 3207-22), effective October 27, 1986; section
6186 of title VI of the Act of November 18, 1988 (Pub. L. No. 100--690;
102 Stat. 4358), effective November 18, 1988; section 942 of title IX
of the Act of August 9, 1989 (Pub. L. No. 101--73; 103 Stat. 497),
effective August 9, 1989; section 104 of title I of the Act of November
29, 1990 (Pub. L. No. 101--647; 104 Stat. 4791), effective November 29,
1990; section 411 of title IV of the Act of December 19, 1991 (Pub. L.
No. 102--242; 105 Stat. 2375) effective December 19, 1991; section 8(b)
of the Act of July 7, 2004 (Pub. L. No. 108--271; 118 Stat. 814);
section 14205 of title IV of the Act of May 22, 2008 (Pub. L. No.
110--234; 122 Stat. 1459), effective October 1, 2008; section 1216a of
title II of the Act of July 30, 2008 (Pub. L. No. 110--289; 122 Stat.
2792), effective July 30, 2008]
SPECIAL PROCEDURES
SEC. 1114. (a)(1) Nothing in this title (except sections 1115,
1117, 1118, and 1121) shall apply to the production and disclosure of
financial records pursuant to requests from--
(A) a Government authority authorized to conduct foreign counter-
or foreign positive-intelligence activities for purposes of conducting
such activities;
(B) The Secret Service for the purpose of conducting its
protective functions (18 U.S.C.
3056; 18 U.S.C. 3056A, Public Law 90-331, as amended); or
(C) A Government authority authorized to conduct investigations
of, or intelligence or counterintelligence analyses related to,
international terrorism for the purpose of conducting such
investigations or analyses.
{{8-29-08 p.7102.01}}
(2) In the instances specified in paragraph (1), the Government
authority shall submit to the financial institution the certificate
required in section 1103(b) signed by a supervisory official of a rank
designated by the head of the Government authority.
(3)(A) If the Government authority described in paragraph (1) or
the Secret Service, as the case may be, certifies that otherwise there
may result a danger to the national security of the United States,
interference with a criminal, counterterrorism, or counterintelligence
investigation, interference with diplomatic relations, or danger to the
life or physical safety of any person, no financial institution, or
officer, employee or agent of such institution, shall disclose to any
person (other than those to whom such disclosure is necessary to comply
with the request or an attorney to obtain legal advice or legal
assistance with respect to the request) that the Government authority
or the Secret Service has sought or obtained access to a customer's
financial records.
(B) The request shall notify the person or entity to whom the
request is directed of the nondisclosure requirement under subparagraph
(A).
(C) Any recipient disclosing to those persons necessary to comply
with the request or to an attorney to obtain legal advice or legal
assistance with respect to the request shall
{{6-30-06 p.7103}}inform such persons of any applicable
nondisclosure requirement. Any person who receives a disclosure under
this subsection shall be subject to the same prohibitions on disclosure
under subparagraph (A).
(D) At the request of the authorized Government authority or the
Secret Service, any person making or intending to make a disclosure
under this section shall identify to the requesting official of the
authorized Government authority or the Secret Service the person to
whom such disclosure will be made or to whom such disclosure was made
prior to the request, except that nothing in this section shall require
a person to inform the requesting official of the authorized Government
authority or the Secret Service of the identity of an attorney to whom
disclosure was made or will be made to obtain legal advice or legal
assistance with respect to the request for financial records under this
subsection.
(4) The Government authority specified in paragraph (1) shall
compile an annual tabulation of the occasions in which this section was
used.
(5)(A) Financial institutions, and officers, employees, and
agents thereof, shall comply with a request for a customer's or
entity's financial records made pursuant to this subsection by the
Federal Bureau of Investigation when the Director of the Federal Bureau
of Investigation (or the Director's designee in a position not lower
than Deputy Assistant Director at Bureau headquarters or a Special
Agent in Charge in a Bureau field office designated by the Director)
certifies in writing to the financial institution that such records are
sought for foreign counter intelligence purposes to protect against
international terrorism or clandestine intelligence activities,
provided that such an investigation of a United States person is not
conducted solely upon the basis of activities protected by the first
amendment to the Constitution of the United States.
(B) The Federal Bureau of Investigation may disseminate
information obtained pursuant to this paragraph only as provided in
guidelines approved by the Attorney General for foreign intelligence
collection and foreign counterintelligence investigations conducted by
the Federal Bureau of Investigation, and, with respect to dissemination
to an agency of the United States, only if such information is clearly
relevant to the authorized responsibilities of such agency.
(C) On the dates provided in section 507 of the National Security
Act of 1947, the Attorney General shall full inform the congressional
intelligence committees (as defined in section 3 of that Act (50 U.S.C.
401a) concerning all requests made pursuant to this paragraph.
(D) PROHIBITION OF CERTAIN DISCLOSURE.--
(i) If the Director of the Federal Bureau of Investigation, or
his designee in a position not lower than Deputy Assistant Director at
Bureau headquarters or a Special Agent in Charge in a Bureau field
office designated by the Director, certifies that otherwise there may
result a danger to the national security of the United States,
interference with a criminal, counterterrorism, or counterintelligence
investigation, interference with diplomatic relations, or danger to the
life or physical safety of any person, no financial institution, or
officer, employee, or agency of such institution, shall disclose to any
person (other than those to whom such disclosure is necessary to comply
with the request or an attorney to obtain legal advice or legal
assistance with respect to the request) that the Federal Bureau of
Investigation has sought or obtained access to a customer's or
entity's financial records under subparagraph (A).
(ii) The request shall notify the person or entity to whom the
request is directed of the nondisclosure requirement under clause (i).
(iii) Any recipient disclosing to those persons necessary to
comply with the request or to an attorney to obtain legal advice or
legal assistance with respect to the request shall inform such persons
of any applicable nondisclosure requirement. Any person who receives a
disclosure under this subsection shall be subject to the same
prohibitions on disclosure under clause (i).
(iv) At the request of the Director of the Federal Bureau of
Investigation or the designee of the Director, any person making or
intending to make a disclosure under this section shall identify to the
Director or such designee the person to whom such disclosure will be
made or to whom such disclosure was made prior to the request, except
that nothing in this section shall require a person to inform the
Director or such designee of the identity of an attorney to whom
disclosure was made or will be made to obtain legal advice or legal
assistance with respect to the request for financial records under
subparagraph (A).
{{6-30-06 p.7104}}
(b)(1) Nothing in this title shall prohibit a Government authority
from obtaining financial records from a financial institution if the
Government authority determines that delay in obtaining access to such
records would create imminent danger of--
(A) physical injury to any person;
(B) serious property damage; or
(C) flight to avoid prosecution.
(2) In the instances specified in paragraph (1), the Government
shall submit to the financial institution the certificate required in
section 1103(b) signed by a supervisory official of a rank designated
by the head of the Government authority.
(3) Within five days of obtaining access to financial records
under this subsection, the Government authority shall file with the
appropriate court a signed, sworn statement of a supervisory official
of a rank designated by the head of the Government authority setting
forth the grounds for the emergency access. The Government authority
shall thereafter comply with the notice provisions of section 1109(c).
(4) The Government authority specified in paragraph (1) shall
compile an annual tabulation of the occasions in which this section was
used.
(d) For purposes of this section, and sections 1115 and 1117
insofar as they relate to the operation of this section, the term
"financial institution" has the same meaning as in subsections
(a)(2) and (c)(1) of section 5312 of title 31, United States Code,
except that, for purposes of this section, such term shall include only
such a financial institution any part of which is located inside any
State or territory of the United States, the District of Columbia,
Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern
Mariana Islands, or the United States Virgin Islands.
[Codified to 12 U.S.C. 3414]
[Source: Section 1114 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3707), effective March 10,
1979; as amended by section 432(b) of title IV of the Act of October
15, 1982 (Pub. L. No. 97--320; 96 Stat. 1527), effective October 15,
1982; section 404 of title IV of the Act of October 27, 1986 (Pub. L.
99--569; 100 Stat. 3197), effective October 27, 1986; section 358(f)(2)
and 505(b) of title III of the Act of October 26, 2001 (Pub. L. No.
106--57; 115 Stat. 327 and 365), effective October 26, 2001; section
811(b)(9) of title VIII of the Act of November 27, 2002. (Pub. L. No.
107--306; 116 Stat. 2426), effective November 27, 2002; section 374(a)
of title II of the Act of December 13, 2003 (Pub. L. No. 108--177; 117
Stat. 2628), effective December 13, 2004; sections 4(d)(1) and (2) of
title VII of the Act of March 9, 2006 (Pub. L. No. 109--177; 120 Stat.
280 and 281), effective March 9, 2006; sections 116(d) and (e) of title
I of the Act of March 9, 2006 (Pub. L. No. 109--177; 120 Stat. 215 and
216), effective March 9, 2006; section 605(e)(1) of title VI of the Act
of March 9, 2006 (Pub. L. No. 109--177; 120 Stat. 255), effective March
9, 2006]
COST REIMBURSEMENT
SEC. 1115. (a) Except for records obtained pursuant to section
1103(d) or 1113(a) through (h), or as otherwise provided by law, a
Government authority shall pay to the financial institution assembling
or providing financial records pertaining to a customer and in
accordance with procedures established by this title a fee for
reimbursement for such costs as are reasonably necessary and which have
been directly incurred in searching for, reproducing, or transporting
books, papers, records, or other data required or requested to be
produced. The Board of Governors of the Federal Reserve System shall,
by regulation, establish the rates and conditions under which such
payment may be made.
(b) This section shall take effect on October 1, 1979.
[Codified to 12 U.S.C. 3415]
[Source: Section 1115 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3708), effective October 1,
1979]
JURISDICTION
SEC. 1116. An action to enforce any provision of this title may be
brought in any appropriate United States district court without regard
to the amount in controversy within three years from the date on which
the violation occurs or the date of discovery of such violation,
whichever is later.
{{6-30-06 p.7104.01}}
[Codified to 12 U.S.C. 3416]
[Source: Section 1116 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3708), effective March 10,
1979]
CIVIL PENALTIES
SEC. 1117. (a) Any agency or department of the United States or
financial institution obtaining or disclosing financial records or
information contained therein in violation of this title is liable to
the customer to whom such records relate in an amount equal to the sum
of--
(1) $100 without regard to the volume of records involved;
(2) any actual damages sustained by the customer as a result of
the disclosure;
(3) such punitive damages as the court may allow, where the
violation is found to have been willful or intentional; and
(4) in the case of any successful action to enforce liability
under this section, the costs of the action together with reasonable
attorney's fees as determined by the court.
(b) Whenever the court determines that any agency or department of
the United States has violated any provision of this title and the
court finds that the circumstances surrounding the violation raise
questions of whether an officer or employee of the department or agency
acted willfully or intentionally with respect to the violation, the
Civil Service Commission shall promptly initiate a proceeding to
determine whether disciplinary action is warranted against the agent or
employee who was primarily responsible for the violation. The
Commission after investigation and consideration of the evidence
submitted, shall submit its findings and recommendations to the
administrative authority of the agency concerned and shall send copies
of the findings and recommendations to the officer or employee or his
representative. The administrative authority shall take the corrective
action that the Commission recommends.
(c) Any financial institution or agent or employee thereof making a
disclosure of financial records pursuant to this title in good-faith
reliance upon a certificate by any Government authority or pursuant to
the provisions of section 1113(l) shall not be liable
to the customer for such disclosure under this title, the constitution
of any State, or any law or regulation of any State or any political
subdivision of any State.
(d) The remedies and sanctions described in this title shall be the
only authorized judicial remedies and sanctions for violations of this
title.
[Codified to 12 U.S.C. 3417]
[Source: Section 1117 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3708), effective March 10,
1979; as amended by section 6186(d) of title VI of the Act of November
18, 1988 (Pub. L. No. 100--690; 102 Stat. 4358), effective November 18,
1988]
INJUNCTIVE RELIEF
SEC. 1118. In addition to any other remedy contained in this title,
injunctive relief shall be available to require that the procedures of
this title are complied with. In the event of any successful action,
costs together with reasonable attorney's fees as determined by the
court may be recovered.
[Codified to 12 U.S.C. 3418]
[Source: Section 1118 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3709), effective March 10,
1979]
{{12-31-01 p.7105}}
SUSPENSION OF STATUTES OF LIMITATIONS
SEC. 1119. If any individual files a motion or application under
this title which has the effect of delaying the access of a Government
authority to financial records pertaining to such individual, any
applicable statute of limitations shall be deemed to be tolled for the
period extending from the date such motion or application was filed
until the date upon which the motion or application is decided.
[Codified to 12 U.S.C. 3419]
[Source: Section 1118 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3709), effective March 10,
1979]
GRAND JURY INFORMATION
SEC. 1120. (a) Financial records about a customer obtained from a
financial institution pursuant to a subpena issued under the authority
of a Federal grand jury--
(1) shall be returned and actually presented to the grand jury
unless the volume of such records makes such return and actual
presentation impractical in which case the grand jury shall be provided
with a description of the contents of the records;
(2) shall be used only for the purpose of considering whether to
issue an indictment or presentment by that grand jury, or of
prosecuting a crime for which that indictment or presentment is issued,
or for a purpose authorized by rule 6(e) of the Federal Rules of
Criminal Procedure, or for a purpose authorized by section 1112(a);
(3) shall be destroyed or returned to the financial institution
if not used for one of the purposes specified in paragraph (2); and
(4) shall not be maintained, or a description of the contents of
such records shall not be maintained by any Government authority other
than in the sealed records of the grand jury, unless such record has
been used in the prosecution of a crime for which the grand jury issued
an indictment or presentment or for a purpose authorized by rule 6(e)
of the Federal Rules of Criminal Procedure.
(b)(1) No officer, director, partner, employee, or shareholder of,
or agent or attorney for, a financial institution shall, directly or
indirectly, notify any person named in a grand jury subpoena served on
such institution in connection with an investigation relating to a
possible--
(A) crime against any financial institution or supervisory
agency; or
(B) conspiracy to commit such a crime,
about the existence or contents of such subpoena, or information that
has been furnished to the grand jury in response to such subpoena.
(2) Section 8 of the Federal Deposit Insurance Act and section
206(k)(2) of the Federal Credit Union Act shall apply to any violation
of this subsection.
[Codified to 12 U.S.C. 3420]
[Source: Section 1120 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3709), effective March 10, 1979; as
amended by section 6186(e) of title VI of the Act of November 18, 1988
(Pub. L. No. 100--690; 102 Stat. 4358), effective November 18, 1988;
and section 943 of title IX of the Act of August 9, 1989 (Pub. L. No.
101--73; 103 Stat. 497), effective August 9, 1989; section 358(f)(3) of
title III of the Act of October 26, 2001 (Pub. L. No. 106--57; 115
Stat, 327), effective October 26, 2001]
REPORTING REQUIREMENTS
SEC. 1121. [Repealed]
[Codified to 12 U.S.C. 3421]
[Source: Section 1121 of title XI of the Act of November
10, 1978 (Pub. L. No. 95--630; 92 Stat. 3710), effective March 10,
1979; as repealed by section 3001(d) of title III of the Act of
December 21, 1995 (Pub. L. No. 104--66; 109 stat. 734), effective
December 21, 1995]
{{12-31-01 p.7106}}
SEC. 1122. Except as provided in the Securities Exchange Act of
1934, this Act shall apply with respect to the Securities and Exchange
Commission.
[Codified to 12 U.S.C. 3422]
[Source: Section 1122 of title XI of the Act of November 10, 1978
(Pub. L. No. 95--630; 92 Stat. 3710), effective March 10, 1979; as
amended by section 2 of the Act of October 10, 1980 (Pub. L. No.
96--433; 94 Stat. 1855), effective November 10, 1980]
NOTE
Department of Justice Compliance Guidelines. On August 7,
1979, the Federal Deposit Insurance Corporation issued the following
Department of Justice compliance guidelines on the Right to Financial
Privacy Act of 1978:
DEPARTMENT OF JUSTICE ADVISORY THE RIGHT TO FINANCIAL
PRIVACY ACT OF 1978
In view of widespread concern resulting from ambiguities and
complexities of the Right To Financial Privacy Act of 1978 [12 U.S.C.
§ 3401 et seq.], hereafter "the RFPA" or "the Act", this
advisory and the attached supporting memorandum are issued to answer
several of the questions most frequently raised in connection with
disclosures of financial information to federal law enforcement
authorities. *
I. Records Covered. The RFPA protects financial
records, or information known to be derived therefrom, relating only to
accounts of individuals and partnerships of five or fewer partners. The
RFPA does not protect records relating to accounts of
corporations, partnerships of six or more partners, trusts,
associations, or other legal entities.
Further, even as to financial information relating to accounts of
individuals and partnerships of five or fewer partners, not all records
are protected by the RFPA. More specifically, to be a protected record,
an item must meet all four of the following tests:
(a) it must be held by a specific financial institution;
(b) it must pertain to an individual's (or covered
partnership's) utilization of the services of that financial
institution;
(c) it must relate to an account maintained by that individual
(or covered partnership) at that institution; and
(d) it must relate to an account in that individual's (or
partnership's) true name.
Applying the above four tests, therefore, the following items are
not covered by the RFPA: forged or counterfeit financial
instruments; records relating to an account established under a
fictitious name; financial records in the possession of an institution
other than the institution at which the person maintains an account
(for example, a check or money order cashed for a non-customer); bank
surveillance photographs; contents of a safe deposit box sought
pursuant to search warrant; or records pertaining to functions that do
not involve an account relationship (services not covered by the Act
include sales of stock, performance of computer services, and other
activities that do not constitute routine banking services).
II. Reporting of Suspected Crimes. The RFPA
specifically authorizes financial institutions voluntarily to report
suspected crimes to federal law enforcement authorities even though
such notification will necessarily involve disclosure of financial
information "derived from" protected records. In reporting that a
suspected criminal violation has occurred, is occurring, or will occur,
a financial institution may disclose the following information to a
federal law enforcement agency:
(a) the name(s) and address(es) of the person(s) suspected and
his (their) relationship with the financial institution, if any;
(b) the identity of the financial institution(s) or office(s)
thereof involved;
(c) the specific offense(s) suspected;
{{4-28-00 p.7107}}
(d) the name(s) and address(es) of the account holder(s) and
the account number(s) and type(s) of account(s) in which evidence of
the suspected offense(s) is located; and
(e) a general description (dates and any suspicious
circumstances) of the transaction(s) involved in the suspected
offense(s).
Of course, other information not protected by the Act which will
assist the law enforcement agency may be freely disclosed.
To illustrate the extent of information which may be disclosed in
connection with a financial institution's notification to federal law
enforcement authorities of a suspected criminal offense, the following
example is provided:
Example: The employing institution, First Financial,
suspects one of its tellers, Steve Jones, of taking advantage of his
position at First Financial's State Street branch office to embezzle
funds from the accounts of six customers, one of which is a
corporation, and of depositing the proceeds of these embezzlements in
Jones' own account at the State Street office. Under the RFPA, First
Financial may report the crime to federal law enforcement authorities
providing all pertinent information not covered by the RFPA. In this
case, such non-protected information might include records of Jones'
shortages and overages as a teller, complete records relating to the
corporate account which has been victimized, information from First
Financial's employment records pertaining to Jones including such items
as his employment application and salary level, information obtained
from interviews with other employees of First Financial [if such
information is not derived from financial records pertaining to Jones'
personal account] which indicates that Jones is living in a style not
in keeping with his income as a teller or that Jones engages in
suspicious activities while performing his job as teller.
Of course, financial records relating to Jones' personal accounts
are protected as are records pertaining to the five accounts of private
individuals who are being victimized by Jones' embezzlement. However,
even if derived from such protected records, the following information
may be reported to federal law enforcement authorities:
(a) Steve Jones' full name and address, the fact that he is
employed as a teller at the State Street office, and the fact that he
is suspected of embezzlement;
(b) the fact that the suspected offenses all involve
transactions occurring at First Financial, State Street office;
(c) the fact that the offense appears to involve violations of
federal criminal law, i.e.,
18 U.S.C. § 656;
(d) the names and addresses of the customers who are the
suspected victims of the embezzlements, the fact that they are believed
to be victims, the fact that they have accounts at the State Street
office, the account numbers of the victims' and Jones' accounts, and
the fact that Jones is suspected of depositing embezzled funds in his
account;
(e) the dates of the suspicious transactions involving each
victim's account and Jones' account together with a description of any
circumstances leading to the belief that the withdrawals and deposits
in question were part of an embezzlement scheme (for example, inquiries
by customer-victims as to specific unexplained debits to their
accounts).
The report may also include the financial institution's analysis of
the information described above together with an analysis of the
significance of the suspected offense. While the general description
and analysis of suspicious transactions may not be so detailed as to
eliminate any need for law enforcement access to actual records, it
should be sufficient to enable federal authorities (1) to reasonably
describe records needed in the investigation, (2) to determine that
there is reason to believe such records are relevant to a legitimate
law enforcement inquiry. Once provided with sufficient information to
comply with these two requirements of the RFPA, federal authorities can
proceed to obtain access to records pursuant to the procedures set out
by the Act.
III. Non-Coercive Access Mechanisms. The RFPA
establishes several procedures by which federal law enforcement
authorities may request access to protected financial records. These
non-coercive access mechanisms include: (a) Customer-Authorized
Access
{{4-28-00 p.7108}}(authorized by
12 U.S.C. § 3404); (b)
Formal Written Requests (authorized by
12 U.S.C. § 3408); (c)
Requests for Account Information (authorized by 12 U.S.C. § 3413(g));
(d) Legal Entity Target Exception (authorized by
12 U.S.C. § 3413(h));
Foreign Intelligence Exception (authorized by
12 U.S.C. § 3414(a)); and
Emergency Access (authorized by 12 U.S.C. § 3414(b)). As the
statutory citations indicate, each of these access mechanisms is
explicitly and unambiguously established by the RFPA and each requires
the government authority seeking records to certify that it is in
compliance with the RFPA. Financial institutions may, therefore, freely
disclose records pursuant to these non-coercive mechanisms relying upon
the government's certificate of compliance.
With respect to certificates of compliance, financial institutions
are under no obligation to look behind the face of the certificate to
determine whether it is defective in some respect. If there is any
defect in the government's request, the responsibility is that of the
government; the financial institution is protected from any possible
civil liability under the RFPA by the certificate of compliance.
While these "request" mechanisms are not judicially
enforceable, it appears to be the intent of the RFPA that financial
institutions comply with proper requests for records. Further, with
respect to the Foreign Intelligence Exception, financial institutions
are expressly prohibited from notifying the customer of requests for
disclosure to the government; this rule of confidentiality is absolute.
IV. Grand Jury Subpoenas. Federal grand jury subpoenas
and court orders issued to enforce such subpoenas are specifically
exempt from the RFPA. This means that the customer notice, certificate
of compliance and civil liability provisions of the Act do not apply to
disclosures made pursuant to federal grand jury subpoenas.
Further, the legislative history of RFPA explains why grand jury
subpoenas were excepted from the customer notice and challenge
provisions of the RFPA: "... grand juries are
protected by rules keeping their proceedings secret. Expanded notice
and challenge rights might diminish grand jury secrecy and threaten the
privacy of individuals being investigated." The Supreme Court has
cited five purposes served by the rule of grand jury secrecy: "(1)
To prevent the escape of those whose indictment may be contemplated;
(2) to insure the utmost freedom to the grand jury in its
deliberations, and to prevent persons subject to indictment or their
friends from importuning the grand jurors; (3) to prevent subordination
of perjury or tampering with the witnessess who may testify before the
grand jury ... ; (4) to encourage free and untrammeled
disclosures by persons who have information with respect to crimes; (5)
to protect [an] innocent accused who is exonerated from disclosure of
the fact that he has been under investigation ... " (
United States v. Proctor and Gamble, 356 U.S. 677 (1958)).
Because the RFPA does not contemplate customer notice in connection
with grand jury subpoenas, and in view of the substantial reasons
supporting the policy of grand jury secrecy, any financial institution
inclined to treat a grand jury subpoena on other than a confidential
basis should first discuss its plans with the government attorney
responsible for the grand jury investigation involved.
V. The Intent of Congress. The chief sponsor of the
RFPA stated during debate on the bill that the purpose of the Act was
to "create a delicate balance" between law enforcement and
privacy interests. For this balance to be realized, both federal law
enforcement authorities and financial institutions must comply with all
provisions of the Act as each provision was enacted to fulfill a
particular purpose.
The Bank Secrecy Act of 1970 required financial institutions to
preserve copies of financial records which have a "high degree of
usefulness in criminal and tax investigations." The 95th Congress
could have repealed the Bank Secrecy Act but instead chose to enact the
RFPA regulating access to records. By seeking to balance privacy
interests against law enforcement needs, and particularly by
establishing the non-coercive access mechanisms and exceptions of the
RFPA, the Congress recognized the continued importance of law
enforcement investigations into organized crime and racketeering,
narcotics trafficking, public corruption, fraud against the government
and other complex criminal activities which frequently require access
to financial records. Financial institutions should be aware of
the
{{4-28-00 p.7109}}background and thrust of the RFPA when acting
upon government-initiated legal process for disclosure of financial
records.
* * * * *
TITLE XXI—EFFECTIVE DATE
SEC. 2101. Except as otherwise provided herein, this Act shall take
effect upon the expiration of one hundred and twenty days after the
date of its enactment.
[Codified to 12 U.S.C. 375b note]
[Source: Section 2101 of title XXI of the Act of November 10, 1978
(Pub. L. No. 95-630; 92 Stat. 3741), effective March 10, 1979]
[The page following this is 7113.]
* NOTE: Disclosures to state and local law enforcement
authorities are not covered by the Act. Further, in addition to the
RFPA, financial institutions in states such as California, Illinois,
and Maryland should be familiar with the financial privacy laws of
their respective states. Go Back to Text
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