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438

Reimbursement of Financial Institutions

Section 3415 of the Act requires Government authorities to reimburse financial institutions for the costs incurred in furnishing certain financial records of individuals and partnerships of five or less individuals in connection with law enforcement inquiries.

The costs incurred by a financial institution in supplying information pursuant to requests by the Department under 12 U.S.C. §§ 3404-3408, 3413(i)-(o), 3414 are reimbursable by the Department. No payment shall be made unless the financial institution submits an itemized bill or invoice showing specific details concerning the search, reproduction, and transportation costs. (Witness and mileage fees will be treated in the same manner as other witness expenses.)

The following rates of reimbursement have been established by the Federal Reserve Board in accordance with the Right To Financial Privacy Act (12 U.S.C. § 3415) and are published at 12 CFR 219 (Regulation S):

  1. Actual search and retrieval costs - $2.50 per quarter hour for time spent by employees in locating, retrieving, reproducing, packaging and/or preparing documents for shipment;

  2. Actual computer costs - time and necessary supplies;

  3. Reproduction costs - 15 cents per page; and

  4. Transportation costs - to locate and retrieve records and/or to transport summoned records to the Department of Justice attorney's office.

Investigative agencies are responsible for costs incurred pursuant to their activities, up to the time that judicial process (a grand jury subpoena, a trial subpoena or a search warrant) is used to obtain financial information. At that point, the proper litigating component becomes responsible for costs incurred pursuant to its activities.

The costs other than witness expenses will be treated as administrative costs, classified under the following object classification codes (O/C):

  1. O/C 2540 is used when a customer authorizes disclosure of financial data, 12 U.S.C. § 3404.

  2. O/C 2541 is used when financial records are obtained pursuant to an administrative subpoena or summons, 12 U.S.C. § 3405.

  3. O/C 2542 is used when financial records are obtained pursuant to a search warrant, 12 U.S.C. § 3406.

  4. O/C 2543 is used when financial records are obtained pursuant to a judicial subpoena, 12 U.S.C. § 3407.

  5. O/C 2544 is used when financial records are obtained pursuant to a formal written request, 12 U.S.C. § 3408.

  6. O/C 2545 is used when financial records are obtained pursuant to a Grand Jury, subpoena, 12 U.S.C. § 3413(i).

  7. O/C 2546 is used when financial records are obtained pursuant to special procedures, 12 U.S.C. § 3414.

Financial institutions shall complete Section B of the Request for Financial Information, Form OBD 211, and return the form, together with the requested information, to the Requesting officer or designee which shall be an officer of the initiating U.S. Attorney's office or litigating division. The appropriate official shall review the invoice to determine that it is itemized, that costs are reasonable, and that the services and/or records were received. If these criteria are met, the official shall approve the invoice by signing it, indicating the appropriate P.L. Section, and forwarding it to the administrative office to assign the appropriate accounting classification code.

Administrative Officials shall forward all approved originals to:

    U.S. Department of Justice

    Fiscal Data Service Group /sos

    601 D Street NW, Room 5414

    Patrick Henry Building

    Washington, D.C. 20530

Invoices received by the Accounting Operations Group which are not properly itemized or approved will be returned to the requesting officer. U.S. Marshals WILL NOT pay for these invoices unless a specific authorization is made by this office.

Form R (found at the end of this chapter) is a sample notice which should be submitted to financial institutions with Form OBD-211 to summarize reimbursement procedures and restrictions.

Before approving Forms OBD-211, Request for Financial Information, or payment, Administrative Officers must:

  1. Ensure that the financial records requested pertain to legitimate "customers" as defined in the Act (i.e., individuals and partnerships of five or less individuals). Reimbursement cannot be made when the financial records relate to any other legal entities. Pittsburgh Nat'l Bank v. United States, 771 F.2d 73 (3rd Cir. 1985)(bank was not entitled to reimbursement for producing records of corporation).

  2. Ensure that reimbursements are authorized only for legitimate "financial institutions" as defined in the Act.

  3. Ensure that Forms OBD-211 are properly prepared, that the appropriate "Section" in Item Number 18 is identified, and that the rates of reimbursement are in accordance with the entitlement and limitations authorized.

  4. Work with attorneys or investigative agents handling cases and financial institutions, if necessary, to ensure that amounts charged are reasonable for the services actually received.

Note: The government is not required to reimburse financial institutions for records when the subject of the investigation is the financial institution in possession of the records sought.

In re Grand Jury Proceedings, 636 F.2d 81 (5th Cir. 1981).