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409. Customer Notice Requirements for Judicial Subpoenas, Administrative Process and Formal Written Requests

All three of these forms of process require that, unless a delay of notice order is obtained, the government agency seeking protected records must notify the customer before it can obtain the records. The extent of the notice required is spelled out in the Act and requires (1) a description of the records sought, (2) a statement of the purpose of the inquiry, and (3) an explanation of the government process, a blank motion, and affidavit forms for filing in court when properly completed.

In the joint account context, notice to one joint account holder will, in the opinion of the Department, constitute notice to all due to the relationship of the joint account holders. The Department's opinion is supported by the case of United States v. First Bank, where the court stated that the IRS does not need to notify the co-owner of a bank account when it subpoenas records of the account in an investigation of the other owner. United States v. First Bank, 737 F.2d 269 (2nd Cir. 1984). The notice should be directed at the account holder who is the subject of the investigation.

Further, trial subpoenas are sometimes issued simply to obtain clearer copies or originals of documents to which the government has previously obtained access. Such a "re-disclosure" does not constitute a disclosure of financial records within the meaning of the Act. (See the interpretation of "disclosure" in a Privacy Act of 1974 case, Harper v. United States, 423 F. Supp. 192, 197 (D.S.C. 1976): "[a disclosure is) . . . the imparting of information . . . which was previously unknown to the person to whom it is imparted." Caution is therefore required in seeking re-disclosure to insure that only records already in custody are obtained. The preferred practice is to provide the financial institution with copies of those items for which clearer copies or original copies or originals are sought. The financial institution will likely request certification of the inapplicability of the Act, such certification may be given.

Finally, the provision at 12 U.S.C. § 3409(a)(3)(E) was especially designed to authorize ex parte orders delaying customer notice of a trial subpoena where such notice would delay trial. See. H.R. Rep. No. 95-1383, at 222, 7 U.S. Code Cong. & Ad. News, 95th Cong., 2nd Sess., at 9352:

In addition, subsection 1109(a)(3) is a general harm provision designed to accommodate unanticipated needs for delay of notice. It is intended to be used only where the potential harm to an investigation is of a magnitude similar to the listed jeopardizing factors, or in the case of a trial or other on going official proceeding. The last exception is a narrow one designed, for example, to permit the use of trial subpoenas for records immediately before or during a proceeding. [Emphasis added.]

Updated January 22, 2020