H.B. 332

1

FINANCIAL RECORDS PRIVACY
2 1998 GENERAL SESSION
3 STATE OF UTAH
4 Sponsor: John W. Hickman
5 AN ACT RELATING TO THE JUDICIAL CODE; AMENDING PROVISIONS RELATED TO
6 A GOVERNMENTAL ENTITY OBTAINING FINANCIAL INFORMATION; DEFINING
7 TERMS; ADDRESSING LIABILITIES OF FINANCIAL INSTITUTIONS; AND MAKING
8 TECHNICAL CORRECTIONS.
9 This act affects sections of Utah Code Annotated 1953 as follows:
10 AMENDS:
11 78-27-45, as last amended by Chapter 241, Laws of Utah 1989
12 78-27-46, as enacted by Chapter 143, Laws of Utah 1977
13 78-27-47, as enacted by Chapter 143, Laws of Utah 1977
14 78-27-48, as enacted by Chapter 143, Laws of Utah 1977
15 78-27-50, as last amended by Chapter 316, Laws of Utah 1994
16 ENACTS:
17 78-27-50.5, Utah Code Annotated 1953
18 Be it enacted by the Legislature of the state of Utah:
19 Section 1. Section 78-27-45 is amended to read:
20 78-27-45. Financial information privacy -- Written consent or court order for
21 disclosure by financial institution -- Exception.
22 (1) As used in Sections 78-27-45 through 78-27-50:
23 (a) "governmental entity" means:
24 (i) the state, including all departments, institutions, boards, divisions, bureaus, offices,
25 commissions, committees, and elected officials; and
26 (ii) any political subdivision of the state, including any county, city, town, school district,
27 public transit district, redevelopment agency, special improvement, or taxing district;

1 (b) "nonprotected record" means a record maintained by the financial institution to
2 facilitate the conduct of its business regarding a person or account, including:
3 (i) the existence of an account and the account number; and
4 (ii) the opening and closing dates of an account;
5 (c) "protected record" means a record not defined as a nonprotected record; and
6 (d) "record" means information that is:
7 (i) prepared, owned, received, or retained by a financial institution;
8 (ii) (A) inscribed on a tangible medium; or
9 (B) stored in an electronic or other medium; and
10 (iii) retrievable in perceivable form.
11 [(1) A person] (2) Except as provided in Section 78-27-50, an individual acting in behalf
12 of [the state, or any agency, office, department, bureau, or political subdivision of the state] a
13 governmental entity may not request or obtain by subpoena or otherwise information from a state
14 or federally chartered financial institution [regarding the financial transactions or other records]
15 that constitutes a record reflecting the financial condition of any person without first obtaining:
16 (a) written permission from the person [whose financial transactions or other records of
17 financial condition are] named or referenced within the record to be examined[,]; or [obtaining]
18 (b) an order from a court of competent jurisdiction permitting access to the [information]
19 record.
20 [(2)] (3) This section does not apply to:
21 (a) reviews made by the commissioner of financial institutions to determine whether a
22 financial institution is operating in accordance with law; or
23 (b) reports filed as required by Section 76-10-1906.
24 [(3) As used in this section, "person" includes an individual, corporation, partnership, or
25 association.]
26 Section 2. Section 78-27-46 is amended to read:
27 78-27-46. Financial information privacy -- Notice to person about whom information
28 sought.
29 (1) [In the event] (a) If a court order is obtained pursuant to Section 78-27-45, the
30 governmental entity that obtained the order shall give notice [thereof shall be given] to the person
31 about whom information is sought within three days of the day on which service of the order is

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1 made upon the financial institution, but no later than seven days before the day fixed in the order
2 as the day upon which the records are to be produced or examined.
3 (b) The notice required by Subsection (1)(a) shall be accompanied by:
4 (i) a copy of the order [which] that has been served upon the financial institution [and];
5 (ii) a copy of the motion or application upon which [it] the order is based; and [shall be
6 accompanied by]
7 (iii) a statement setting forth the rights of the person under Section 78-27-47.
8 (2) (a) The notice shall be sufficient if, on or before the third day after issuance of the
9 order, notice is:
10 (i) served in the manner provided in Rule 4(e), Utah Rules of Civil Procedure, upon the
11 person entitled to notice[,]; or [is]
12 (ii) mailed by certified or registered mail to the last-known address of the person. [In the
13 event the]
14 (b) Notwithstanding Subsection (2)(a), if the person entitled to notice is deceased or under
15 legal disability, notice shall be served upon or mailed to the last-known address of such person's
16 executor, administrator, guardian, or other fiduciary.
17 Section 3. Section 78-27-47 is amended to read:
18 78-27-47. Financial information privacy -- Intervention to challenge or stay order
19 -- Burden on governmental entity.
20 (1) Notwithstanding any other law or rule of law, any person who is entitled to notice of
21 a court order under Section 78-27-46 shall have the right to intervene in any proceeding with
22 respect to enforcement of the order to challenge the issuance of the order or to stay compliance
23 [therewith] with the order.
24 (2) Upon intervention, the burden shall be [upon] on the [state, agency, officer,
25 department, bureau or political subdivision] governmental entity obtaining the order to show that
26 there is reasonable cause for the issuance of the order [and that the information sought may further
27 the investigation].
28 Section 4. Section 78-27-48 is amended to read:
29 78-27-48. Financial information privacy -- Reimbursement of financial institution
30 for costs of obtaining information.
31 (1) Any financial institution [which produced] that produces records pursuant to

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1 permission [or], in compliance with an order obtained under [this act] Sections 78-27-45 through
2 78-27-50, or in compliance with an order of a court of competent jurisdiction shall be entitled to
3 reimbursement by the [party or parties] governmental entity seeking the information, for costs
4 reasonably and directly incurred in searching for, reproducing, or transporting books, papers,
5 records, or other data required to be produced.
6 (2) The commissioner of financial institutions shall by [regulation] rule establish the rates
7 and conditions under which reimbursement shall be made.
8 Section 5. Section 78-27-50 is amended to read:
9 78-27-50. Financial information privacy -- Inapplicable to certain official
10 investigations.
11 (1) [This chapter shall] Sections 78-27-45 through 78-27-50 do not apply [where] when
12 an examination of records is a part of an official investigation by [any]:
13 (a) a local police[,];
14 (b) a sheriff[,];
15 (c) a peace officer[,];
16 (d) a city attorney[,];
17 (e) a county attorney[,];
18 (f) a district attorney[,];
19 (g) the attorney general[,];
20 (h) the Department of Public Safety[,];
21 (i) the Office of Recovery Services of the Department of Human Services[,];
22 (j) the Insurance Department[, or];
23 (k) the Department of Commerce; or
24 (l) the state auditor.
25 [(2) Any financial institution or its agent or employee making a disclosure of financial
26 records pursuant to any court order, subpoena, administrative subpoena, or other legal process, is
27 not liable to the customer for disclosure.]
28 (2) If a governmental entity listed in Subsection (1) seeks a record, the entity shall obtain
29 the record as follows:
30 (a) if the record is a nonprotected record, by request in writing from a representative of the
31 governmental entity that is conducting the official investigation; or

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1 (b) if the record is a protected record, by obtaining a subpoena or other legal process:
2 (i) ordered by a court of competent jurisdiction; and
3 (ii) served upon the financial institution.
4 (3) A financial institution may not give notice to any person named or referenced within
5 the record disclosed pursuant to Subsection (1)(a).
6 (4) A protected record obtained under this section shall be subject to reimbursement from
7 the agency conducting the official investigation for costs reasonably incurred by the financial
8 institution in accordance with Section 78-27-48.
9 Section 6. Section 78-27-50.5 is enacted to read:
10 78-27-50.5. Liability of financial institutions.
11 A financial institution is not liable to any person named or referenced within a record for
12 any disclosure that is the result of a subpoena, order, or request made pursuant to Sections
13 78-27-45 through 78-27-50 if the financial institution reasonably believes that the subpoena, order,
14 or request is properly made under Sections 78-27-45 through 78-27-50.




Legislative Review Note
as of 1-27-98 8:37 AM

A limited legal review of this bill raises no obvious constitutional or statutory concerns.

Office of Legislative Research and General Counsel

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