Yes, we believe a loan officer may inform an applicant that the bank has received a subpoena regarding the applicant. As you note, the Illinois Banking Act requires the bank to notify a customer before responding to a subpoena, but the law does not specify which bank employee or department must provide the notice. We don’t see a problem with the notice coming from the loan officer, particularly because your bank still plans to send a formal notice, too.
Also note that federal law does impose some restrictions on notifying customers about subpoenas, such as when the customer is named in a grand jury subpoena in relation to certain crimes or when a court orders the bank to not notify the customer. However, we are not aware of any restrictions that generally apply to a civil subpoena, and as you have stated, the subpoena itself does not limit disclosure to your customer.
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 . . . .”)
- Right to Financial Privacy Act, 12 USC 3413(i) (“Nothing in this chapter (except sections 3415 and 3420 of this title) shall apply to any subpena or court order issued in connection with proceedings before a grand jury, except that a court shall have authority to order a financial institution, on which a grand jury subpoena for customer records has been served, not to notify the customer of the existence of the subpoena or information that has been furnished to the grand jury, under the circumstances and for the period specified and pursuant to the procedures established in section 3409 of this title.”)
- Right to Financial Privacy Act, 12 USC 3420(b)(1) (“No officer, director, partner, employee, or shareholder of, or agent or attorney for, a financial institution shall, directly or indirectly, notify any person named in a grand jury subpoena served on such institution in connection with an investigation relating to a possible — (A) crime against any financial institution or supervisory agency or crime involving a violation of the Controlled Substance Act [21 U.S.C. 801 et seq.], the Controlled Substances Import and Export Act [21 U.S.C. 951 et seq.], section 1956 or 1957 of title 18, sections 5313, 5316 and 5324 of title 31, or section 6050I of title 26; or (B)conspiracy to commit such a crime, about the existence or contents of such subpoena, or information that has been furnished to the grand jury in response to such subpoena.”)