When we receive a subpoena for financial records, are we always required to notify the customer before responding? What is the definition of financial records, and should these include financial statements and tax returns that were provided to the bank by the customer, or by a third party (such as an accountant)? Or are financial records only those records produced by the bank, such as checking account statements, loan history statements, and the like?

Yes, generally the Illinois Banking Act requires a bank to notify a customer before responding to a subpoena. However, this requirement does not apply when the “bank is specifically prohibited from notifying the person by order of the court or by applicable State or federal law.” A bank also is prohibited from providing notice of a subpoena to a customer named in a grand jury subpoena related to certain crimes.

Generally, the Illinois Banking Act prohibits banks from sharing customers’ financial information with third parties, unless an exception applies. One exception applies when sharing a customer’s “financial records” in response to a lawful subpoena. The Illinois Banking Act defines “financial records” to include any item containing information about a customer that is collected in the ordinary course of business, “including financial statements or other financial information provided by the customer.”

For purposes of this definition, we would treat financial information provided by a customer’s accountant as information provided by the customer, since an accountant presumably would be providing that information with the customer’s consent or direction. However, we would recommend caution when disclosing information that was obtained from a third party without the customer’s consent.

Also, your bank must ensure that it only discloses information as required by a subpoena, and no more. If the party issuing the subpoena has not defined “financial records” for the purposes of answering the subpoena or otherwise clarified which documents are being sought, your bank should request clarification from the attorney who issued the subpoena.

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 by order of court or by applicable State or federal law. A bank shall not mail a copy of a subpoena to any person pursuant to this subsection if the subpoena was issued by a grand jury under the Statewide Grand Jury Act.”)

Illinois Banking Act, 205 ILCS 5/48.1(c) (“Except as otherwise provided by this Act, a bank may not disclose to any person, except to the customer or his duly authorized agent, any financial records or financial information obtained from financial records relating to that customer of that bank unless: . . . (2) the financial records are disclosed in response to a lawful subpoena, summons, warrant, citation to discover assets, or court order which meets the requirements of subsection (d) of this Section; . . .”)

Illinois Banking Act, 205 ILCS 5/48.1(a) (“[T]he term ‘financial records’ means any original, any copy, or any summary of: . . . (4) any other item containing information pertaining to any relationship established in the ordinary course of a bank’s business between a bank and its customer, including financial statements or other financial information provided by the customer.”)

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 subpoena 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 USC 801 et seq.], the Controlled Substances Import and Export Act [21 USC 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.”)