Opinion ID: 457611
Heading Depth: 2
Heading Rank: 2

Heading: Pertaining to a Customer

Text: 20 Section 3415 provides for reimbursement to a financial institution of the costs incurred in producing financial records pertaining to a customer. 12 U.S.C. Sec. 3415 (1982). As an alternative ground for affirming the district court, PNB argues that it is entitled to reimbursement because the corporate records requested by the government pertained to a grand jury investigation of the three individuals named in the subpoena. It is undisputed that the three named individuals, Bruno, Mendicino and Krzywicki, were each customers of PNB. Additionally, the government has disclosed that the subpoenaed records were obtained, at least in part, in connection with a grand jury investigation of the individuals in their capacity as officers of American Investors. The grand jury was also investigating possible criminal activity on the part of the two American Investors corporations. 21 Thus, we are called upon to determine what Congress intended by the phrase financial records pertaining to a customer. PNB contends that this language mandates reimbursement whenever records are sought in connection with an investigation directed at a customer. Hence, even though the records sought are those of another entity, the institution is entitled to reimbursement if the investigation triggering the information request pertains to a customer of the institution. In contrast, the government maintains that a financial institution can only be reimbursed for the costs its incurs in producing the customer's own financial records. 22 Although there is no definitive statement of Congressional intent, the government directs our attention to a portion of the legislative history relating to the definitions section of the Act: 23 The definition of financial records and customer taken together, are intended to preclude application of the bill to anyone other than the person to whose account information the government seeks access. They would exclude, for example, the endorsers of checks and guarantors of loans. 24 H.R.Rep. No. 1383, 95th Cong., 2nd Sess. 49, reprinted in 1978 U.S.Code Cong. & Ad.News 9273, 9321. Thus, the Act mandates the procedures by which an individual account holder may authorize or contest government access to his own financial records. Section 3415 contemplates reimbursement only when the financial institution assembles or provides the requested records in accordance with procedures established by this chapter. 12 U.S.C. Sec. 3415 (1982). Because the procedures established under the Act relate only to the government's access to a customer's own records, it follows that reimbursement is permitted only when the financial institution provides the financial records of a bona fide customer, not those of another entity. 25 Logic also supports the government's position that a financial institution may only be reimbursed for the costs it incurs in providing a customer's own financial records. Under PNB's interpretation of the pertaining to language, PNB would be entitled to reimbursement for producing the corporate records of American Investors merely because the three individuals under grand jury investigation happen to be customers of the same bank. Were it not for this coincidence, PNB would not have been entitled to reimbursement for, as we have already determined, American Investors was not itself a customer of PNB. Thus, whether the bank would be entitled to reimbursement for the costs of producing a particular set of records would depend not upon the type of records involved or the identity of the account holder, but rather upon whether the grand jury investigation was in any way directed at a customer of the bank. We cannot believe that Congress intended to condition the right of reimbursement on such a haphazard basis. 26 Finally, in the absence of a clear expression of legislative intent, we decline to ascribe to Congress an interpretation of the pertaining to language which, in our view, could seriously undermine the traditional secrecy of grand jury proceedings. In order to defend its denial of a request for reimbursement on the ground that the requested documents do not pertain to the investigation of a customer, the government would be required to disclose the target of a grand jury investigation. Under Fed.R.Crim.P. 6(e), such disclosures are prohibited absent a court order. Accordingly, we hold that a financial institution is entitled to reimbursement under section 3415 only for those costs associated with the production of a customer's own financial records. The costs of producing the financial records of a corporation are therefore not subject to reimbursement because such an entity is not a customer under the Act.