Opinion ID: 1199170
Heading Depth: 1
Heading Rank: 3

Heading: the effect of the financial privacy act upon the commission's explicit statutory duty to enforce the unclaimed property act against banks

Text: Lincoln argues that in the absence of a subpoena or customer consent the Financial Privacy Act (6 O.S. 1981 § 2201 et seq.) prohibits it from disclosing information about customer accounts to any government authority, [27] including the Oklahoma Tax Commission. The Financial Privacy Act does not, on the other hand, pose any obstacles to access by a supervisory agency, [28] which status the Commission claims for purposes of the Unclaimed Property Act. [29] The trial court decided this issue in Lincoln's favor. We hold that for the singular mission of fulfilling its statutorily mandated duty to enforce the Unclaimed Property Act, the Commission qualifies as a supervisory agency within the meaning of, and hence unhampered by, the Financial Privacy Act. [30] Oklahoma adopted the Uniform Disposition of Unclaimed Property Act in 1967, [31] and the Financial Privacy Act was enacted in 1979. [32] Lincoln contends that the later, more specific enactment controls and hence operates as a barrier to the Commission's search for unreported abandoned property believed to be held by a bank. We conclude that the legislature intended otherwise. Both acts have been amended since 1979 and financial institutions have not been taken off the list of potential holders of abandoned property who may be investigated by the Commission. Indeed, the 1982 amendment to § 652 [33] of the Unclaimed Property Act, which specifically addresses property held by banks, brought about a decrease in the number of years of dormancy required before the property is presumed abandoned. [34] Moreover, since the Financial Privacy Act's enactment the Commission's enforcement powers under the Unclaimed Property Act had been broadened. For example, by the addition of § 658.8 in 1984 the Commission was empowered to administer oaths, to conduct hearings, and to compel ... the production of the books, records and papers of any person, firm, association or corporation.  (Emphasis added.) Although § 658.8 was repealed, effective September 1, 1991, by Okl.Sess. L., ch. 331 § 64, its provisions were in force when the district court quashed the Commission's inspection process against Lincoln. [35] Moreover, by the terms of newly enacted § 683.2(a) of Title 60, the legislature expressly declared that (1) the 1991 amendments to the Unclaimed Property Act do not relieve a holder of a duty that arose before the effective date of this act[, September 1, 1991,] to report, pay or deliver property and (2) [a] holder who did not comply with the law in effect before the effective date of this act is subject to the applicable enforcement and penalty provisions that then existed and they are continued used in effect for the purpose of this subsection... . (Emphasis added.) Okl.Sess.L. 1991, ch. 331 § 41. Inasmuch as abandoned money lying dormant in a bank bears on the latter's financial condition and business operations, the Commission's enforcement powers are consistent with supervisory agency status [36] within the meaning of the Financial Privacy Act. [37] Perhaps the strongest indication of legislative intent either to treat the Commission as a supervisory agency or to keep it free from the Financial Privacy Act's strictures is manifested in 6 O.S.Supp. 1985 § 2205(c) of the Financial Privacy Act and in 60 O.S.Supp. 1988 § 661(H) of the Unclaimed Property Act. Section 2205(c) expressly permits banks to notify a government authority that such institution ... has information that may be relevant to a possible violation of any statute or regulation. (Emphasis added.) Doubtless the phrase any statute includes the Unclaimed Property Act. The Financial Privacy Act hence may not be viewed as a barrier to the Commission's search for unreported abandoned property. With the exception of information required to be made public, the terms of 60 O.S.Supp. 1988 § 661(H) expressly mandate that [r]eports filed by a holder [of abandoned property] shall remain confidential. This command for confidentiality is indicative of legislative intent to treat the Commission as a supervisory agency only for purposes of enforcing the Unclaimed Property Act. [38] Just as certain records of the State Banking Department must be kept confidential, [39] so too must the Commission keep confidential the inspection-derived information obtained for its limited and carefully circumscribed purpose. With respect to records containing information on abandoned property alone, there can be no doubt that the Financial Privacy Act poses no barrier to their disclosure. [40] This is so because no privacy interest exists in property that is presumed abandoned by law. The controversy before us, then, is over how far the Commission may go when examining a bank's records in search of unreported abandoned property. We hold that only to the extent necessary to fulfill its duties under the Unclaimed Property Act and only for the production of documents critical to a meaningful search may the Commission issue its pre-dispute process for the inspection of a bank and enforce it in the district court unimpeded by the Financial Privacy Act. [41]