IBA Compliance Connection

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Our bank received a subpoena requesting all documents “for any checking accounts in which the above named persons, whether jointly or individually or with any other person, may have an interest . . . .” This individual has a personal account and is an authorized signer on three LLC accounts. Are we required to provide information regarding the LLC accounts in addition to the personal account? Also, can we mail the notice of the subpoena to the individual on the same day we mail our subpoena response?

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Based on the information you have provided to us, it appears that the subpoena does not cover the LLC accounts (notwithstanding its overly broad language). Generally, a corporation’s assets are separate from an individual’s assets, even if that individual is an authorized signer on the LLC accounts. In our view, you are not required to divulge information or provide documents on the corporate accounts, because they are not the individual’s property.

As to providing notice to the individual, the language in the Illinois Banking Act requiring your bank to provide notice to a customer who is the subject of a subpoena does not specify a time period for providing the notice before responding to the subpoena. We do note that an analogous provision in federal law pertaining to federal administrative subpoenas requires a bank to wait until “ten days have expired from the date of service of the notice or fourteen days have expired from the date of mailing the notice to the customer.”  The point of this waiting period is to give the customer an opportunity to object to the subpoena, and we think that is the intent of the notice requirement in the Illinois law as well. Consequently, we do think you should provide a reasonable time after mailing the notice for your customer to object to the subpoena before responding to it.

For resources related to our guidance, please see:

  • Illinois Banking Act, 205 ILCS 5/48.1(d) (“A bank shall disclose financial records . . . under a lawful subpoena . . . only after the bank mails a copy of the subpoena . . . to the person establishing the relationship with the bank, if living, and, otherwise his personal representative, if known, at his last known address by first class mail, postage prepaid, unless the bank is specifically prohibited from notifying the person . . . .”)

  • 12 USC 3405 (“A Government authority may obtain financial records under section 3402(2) of this title pursuant to an administrative subpoena or summons otherwise authorized by law only if . . . ten days have expired from the date of service of the notice or fourteen days have expired from the date of mailing the notice to the customer and within such time period the customer has not filed a sworn statement and motion to quash in an appropriate court, or the customer challenge provisions of section 3410 of this title have been complied with.”)