Opinion ID: 412097
Heading Depth: 3
Heading Rank: 2

Heading: The Financial Privacy Act.

Text: 25 The Financial Privacy Act, 12 U.S.C. Sec. 3401 et seq. (Supp. III 1979), was enacted by Congress in response to a pattern of government abuse in the area of individual privacy. The Act was intended to protect the customers of financial institutions from unwarranted intrusion into their records while at the same time permitting legitimate law enforcement activity. Therefore, it seeks to strike a balance between the customers' right of privacy and the need of law enforcement agencies to obtain financial records pursuant to legitimate investigations. H.R.Rep. No. 1383, 95th Cong., 1st Sess. 33, reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9305. It permits individuals to contest Government access to certain records held by banks and other financial institutions by requiring the Government authority to notify the bank customer of the subpoena or summons served on the financial institutions as well as the nature of the law enforcement inquiry to which the subpoena or summons relates. 12 U.S.C. Sec. 3405(2) (Supp. III 1979). The Act specifically forbids a financial institution to 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 the Act. 12 U.S.C. Sec. 3403(b) (Supp. III 1979). No certification has been given in this case. 26 The Secretary argues that no certification is necessary because the Financial Privacy Act explicitly pertains only to records of individuals or partnerships of five or less, 12 U.S.C. Sec. 3401(4) (Supp. III 1979), not to the records of employee benefit plans. With respect to the first part of the subpoena, the Secretary's argument is well-taken. The Department's subpoena, however, is not limited to the records of the plans themselves, but instead seeks all documents maintained by the bank relating to transactions or dealings with, for or on behalf of the employee benefit plans selected. Under the Act, only financial records or information which is not identified with or identifiable as being derived from the financial records of a particular customer may be disclosed without compliance with the procedures prescribed by the Act. 12 U.S.C. Sec. 3413(a) (Supp. III 1979). Where the Department requests records which disclose transactions of bank customers with the plans, its request would fall within the scope of the Financial Privacy Act, and, absent certification, the bank may legally refuse to produce those records. No such request has been made as yet. The first part of the subpoena requests information pertaining only to the plans. As for the second part of the subpoena, absent selection of the actual plans to be investigated, neither the Department nor the bank has any way of knowing whether any individual privacy rights might be affected. The bank cannot refuse to comply with the subpoena as a whole on the basis of its vague allegations that it might be required at some time in the future to produce records in violation of the Financial Privacy Act. Cf. United States v. Horton, 629 F.2d 577, 579 (9th Cir.1980) (fifth amendment privilege may not be raised by blanket assertion but must be interposed in response to specific questions). 27