Topic: Requests for Financial Information
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We received a citation to discover assets for one of our customers directing us to freeze up to twice the amount of the judgment against them. We froze the funds in their account, then received a second citation to discover assets from a different creditor related to a different judgment against the same customer. We are unsure how to answer the second citation since we are in possession of funds belonging to the judgment debtor that are frozen. The funds in the customer’s account exceed the amount of the first judgment — but not by twice the judgment amount — so, depending on the amount we are asked to turnover for the first judgment, there may be some funds remaining to apply to the second judgment.
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We recommend consulting with your bank counsel on how to answer a third-party citation, as we cannot provide legal advice. However, based on the information provided, we do not believe you are holding any unencumbered funds belonging to the judgment debtor. A citation to discover assets acts as a lien on a judgment debtor’s personal…
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We received a message through the Social Security Administration (SSA)’s online system asking us to verify whether an individual has a deposit account with us. The individual is a customer of ours, but we are not sure whether we should disclose this information. The SSA’s message says that our customer has consented to the release of this information in accordance with the Right to Financial Privacy Act, but the customer’s signature is not included. Instead, the SSA’s message states that our customer’s signature is on file.
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We do not recommend disclosing the fact that your customer has a deposit account with your bank without receiving a signed and dated statement from your customer authorizing the disclosure that complies with the Right to Financial Privacy Act’s requirements. The Right to Financial Privacy Act prohibits federal government authorities from accessing information contained in…
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How much we can charge to respond to a subpoena? We typically charge what we would charge our customers for copies of statements — $5 per statement plus $40 per hour of staff time. We received a subpoena that is seeking information about a commercial loan, which will tie up a senior vice president’s time. Are we limited in what we can charge for copies and preparation time?
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Yes, we believe you are limited in what you can charge for copies and personnel costs when responding to a subpoena. The Illinois Banking Act provides that banks must be reimbursed for the costs of responding to a subpoena. The Illinois Administrative Code includes specific rates of reimbursement for personnel costs ($20 per hour), reproduction…
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We received a subpoena for documents seeking records for one of our customers going back to January 1, 2000, along with a $40 check. We asked the attorney who sent the subpoena to narrow the scope of the request but received no response for three months. The attorney has now followed up on the document request, but we noticed that the subpoena does not have a stamp from the Circuit Court Clerk. Also, the clerk’s office does not have a record of the subpoena being issued. Do we have to respond to it?
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Yes, we believe your bank likely is required to respond to the subpoena — provided it was duly issued. However, your bank is entitled to prepare an estimate of the costs of responding to the subpoena (which may well exceed $40) and delay delivery of the documents until payment has been made. The Illinois Supreme…
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Last December, we received a citation to discover assets for a business customer, and we placed a hold on their account and sent our answer to the citation. At the time, there was less than $5 in the account. The court date for the citation was continued multiple times until a date in June, when a turnover order was entered for the amount provided in our answer. The turnover order indicates that any funds in excess of the amount indicated in the order are to be returned to the account holder, that the freeze on the account is lifted, and that the citation is dismissed. However, we recently discovered that beginning shortly after we sent our answer to the citation, the customer received multiple ACH deposits from vendors, now totaling an amount in the five figures. No funds have flowed out of the account due to the hold. Should we alert the creditor’s attorney of the additional funds, or do we have no further obligation since the citation has been dismissed? The creditor’s attorney never asked us to update our answer.
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We do not believe you are required to notify the creditor’s attorney of the additional funds in your customer’s account, and we would caution against disclosing the current account balance or continuing to impose a hold without an active citation in place. A citation to discover assets acts as a lien on a judgment debtor’s…
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When we receive a subpoena seeking information about one of our customers, are we supposed to notify the customer and wait for them to respond before responding to the subpoena?
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Yes, you generally must notify a customer of a subpoena by sending them a copy, subject to the caveats discussed below, but you do not need to wait for the customer to respond after notifying them of the subpoena. The Illinois Banking Act requires banks to send a copy of a subpoena to a customer…
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We received a notice of lien from the Illinois Department of Healthcare and Family Services (HFS) indicating that we should put a hold on the checking account of a customer who owes unpaid child support. The amount of the unpaid child support is approximately twice the funds in the account. Should we freeze the entire account or only the funds currently in the account?
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We recommend freezing the entire account up to the amount indicated in the notice of lien. The Illinois Public Aid Code authorizes HFS to serve notice of liens for past-due child support to financial institutions where the responsible payor has an account for “encumbrance or surrender” of the account by the financial institution. If HFS…