Topic: Requests for Financial Information
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How should we respond to a Notice of Right to Attach Federal Benefits for child support from the Illinois Department of Health and Family Services (HFS) when the target account solely consists of federal benefit payments?
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Since the agency included the proper notice with its garnishment order, we believe that you should turn over any accounts identified in the notice, including any funds attributable to federal benefit payments. Garnishment orders from a state child support agency are excluded from the procedures and protections for federal benefit payments, provided that the agency’s…
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Are we required to notify a customer when we have received a citation to discover assets or a levy on their account if there are no funds in the account?
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We believe that you are required to notify the customer, whether or not the account balance is zero, unless a court order or applicable law specifically prohibits you from notifying the customer. The privacy provisions in the Illinois Banking Act state that a bank may disclose a customer’s financial records to a third party “only…
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We received a letter from Accuity about electronic Medicaid asset verification requests. Is the IBA recommending that banks not participate in this program?
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Thank you for forwarding Accuity’s letter regarding electronic Medicaid asset verifications. The request in the letter appears to reflect a different program than the one we addressed in our 2013 letter to Illinois banks, and we do not see it raising the concerns referenced in our earlier letter. It appears that the Illinois Department of…
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We received a subpoena that requires us to produce lengthy documents. What kind of fees can we charge? I saw that the Illinois Banking Act permits us to charge our own fees.
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The Illinois Banking Act’s privacy provisions allow banks to collect any costs that it incurs in responding to a court order (such as a garnishment order): (g) A bank shall be reimbursed for costs that are reasonably necessary and that have been directly incurred in searching for, reproducing, or transporting books, papers, records, or other…
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We received a nonwage garnishment from the county, but we do not have any customers that match the name on the order. There may be a match for a former customer’s account, but we cannot determine whether this is the case because the order provides only the last four digits of the debtor’s social security number. How should we respond?
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We believe that it would be a best practice to contact the county’s attorney listed on the nonwage garnishment order and advise the county that you do not have any matches based on the information provided. You may want to request a full social security number to confirm that you do not have any existing…
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We received a citation to discover assets for any accounts in which one of our customers “has or had an interest.” The citation lists a “John Doe, d/b/a John’s Auto Repair,” with the individual’s social security number. Should we freeze funds in a sole proprietorship account under the “John’s Auto Repair” name, even though it has a separate TIN and does not use the individual debtor’s social security number?
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From the information you have given us, the citation to discover assets is seeking a sole proprietorship account owned by the judgment debtor. Because the judgment debtor is the sole proprietor of the “John’s Auto Repair” business, the business account should be considered the debtor’s assets and should be frozen. (Note that a sole proprietorship…
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One of our loan customers makes payments through an ACH agreement with the customer’s employer, and the customer incurred a late fee due to a payroll issue at the employer. The employer agreed to pay the customer’s late fee, but the customer requested a larger refund than the actual cost of the late fee. Can we disclose the amounts of the customer’s late fee without violating any privacy laws?
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After reviewing Illinois and federal privacy law, it looks like the bank’s disclosure of the customer’s personal financial information could fall into an exception for disclosing such information to protect against fraud, and it also may fall into an exception for disclosing information in connection with processing a customer’s transactions. Both federal and Illinois privacy…
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We recently responded to a subpoena by providing financial records about a customer. Now, this customer is contesting the subpoena and claims that we violated the Right to Financial Privacy Act. Is this a data breach incident that we need to report?
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Privacy Laws First, we disagree with your customer that responding to a subpoena with financial information violated your customer’s privacy rights. Both Illinois and federal privacy laws include exceptions for responding to subpoenas with customers’ financial information. Under Regulation P, a financial institution may disclose a customer’s information “to comply with a properly authorized .…
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We received a request from the Illinois Department of Healthcare and Family Services requesting information about a customer’s deposit accounts. Since the customer also has a safety deposit box with us, should we report that to the DHFS as well?
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Based on the information you have given us, we do not believe that the bank should respond to the Department of Healthcare and Family Services letter requesting information on a customer’s checking accounts. Even confirming that an individual was a customer of the bank would risk violating the customer’s privacy rights, as would providing information…