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S.B. 140






Chief Sponsor: Margaret Dayton

House Sponsor: Bradley M. Daw

             8      LONG TITLE
             9      General Description:
             10          This bill modifies the Financial Institutions Act to address obtaining a record by written
             11      permission of account holders.
             12      Highlighted Provisions:
             13          This bill:
             14          .    defines terms;
             15          .    provides for obtaining a protected record by written permission of account holders;
             16      and
             17          .    makes technical and conforming amendments.
             18      Monies Appropriated in this Bill:
             19          None
             20      Other Special Clauses:
             21          None
             22      Utah Code Sections Affected:
             23      AMENDS:
             24          7-1-1001, as last amended by Laws of Utah 2008, Chapter 268 and renumbered and
             25      amended by Laws of Utah 2008, Chapter 3
             26          7-1-1004, as renumbered and amended by Laws of Utah 2008, Chapter 3
             27          7-1-1006, as renumbered and amended by Laws of Utah 2008, Chapter 3

             28          7-1-1007, as renumbered and amended by Laws of Utah 2008, Chapter 3
             30      Be it enacted by the Legislature of the state of Utah:
             31          Section 1. Section 7-1-1001 is amended to read:
             32           7-1-1001. Definitions -- Written consent or court order for disclosure by financial
             33      institution -- Exception.
             34          (1) As used in this part:
             35          (a) "Account holder" means a person for whom an account is held by a financial
             36      institution.
             37          [(a)] (b) "Governmental entity" means:
             38          (i) the state, including [all departments, institutions, boards, divisions, bureaus, offices,
             39      commissions, committees, and elected officials; and]:
             40          (A) a department;
             41          (B) an institution;
             42          (C) a board;
             43          (D) a division;
             44          (E) a bureau;
             45          (F) an office;
             46          (G) a commission;
             47          (H) a committee; or
             48          (I) an elected official; and
             49          (ii) a political subdivision of the state, including:
             50          (A) a county[,];
             51          (B) a city[,];
             52          (C) a town[,];
             53          (D) a school district[,];
             54          (E) a public transit district[,];
             55          (F) a redevelopment agency[,];
             56          (G) a special improvement[,]; or
             57          (H) a taxing district.
             58          [(b)] (c) "Nonprotected record" means a record maintained by [the] a financial

             59      institution to facilitate the conduct of [its] the financial institution's business regarding a person
             60      or account, including:
             61          (i) the existence of an account;
             62          (ii) the opening and closing dates of an account;
             63          (iii) the name under which an account is held; and
             64          (iv) the name, address, and telephone number of an account holder.
             65          [(c)] (d) "Protected record" means a record that is not defined as a nonprotected
             66      record[; and].
             67          [(d)] (e) "Record" means information that is:
             68          (i) prepared, owned, received, or retained by a financial institution;
             69          (ii) (A) inscribed on a tangible medium; or
             70          (B) stored in an electronic or other medium; and
             71          (iii) retrievable in perceivable form.
             72          (2) Except [as provided in Section] for a governmental entity listed in Subsection
             73      7-1-1006 (1), an individual acting [in] on behalf of a governmental entity may not request,
             74      obtain by subpoena, or otherwise obtain information from a state or federally chartered
             75      financial institution that constitutes a record reflecting the financial condition of any person
             76      without first obtaining:
             77          (a) written permission from [the person that is named or referenced] all account holders
             78      of the account referenced in the record to be examined; or
             79          (b) an order from a court of competent jurisdiction permitting access to the record.
             80          (3) This section does not apply to a review made by the commissioner [of financial
             81      institutions] to determine whether a financial institution is operating in accordance with law.
             82          Section 2. Section 7-1-1004 is amended to read:
             83           7-1-1004. Reimbursement of financial institution for costs of obtaining
             84      information.
             85          (1) A financial institution [shall be] is entitled to reimbursement by [the] a
             86      governmental entity seeking [the] information, for costs reasonably and directly incurred in
             87      searching for, reproducing, or transporting [books, papers, records, or other data] a record
             88      required to be produced if the financial institution produces the record:
             89          (a) pursuant to written permission by [the person named or referenced in] all account

             90      holders of the account referenced in the record in accordance with [Section 7-1-1001 ;]:
             91          (i) Subsection 7-1-1001 (2)(a); or
             92          (ii) Subsection 7-1-1006 (2)(b)(iii);
             93          (b) in compliance with an order obtained under this part; or
             94          (c) in compliance with an order of a court or administrative body of competent
             95      jurisdiction.
             96          (2) The commissioner [of financial institutions] shall by rule establish the rates and
             97      conditions under which [reimbursement shall be made] a governmental entity shall reimburse a
             98      financial institution.
             99          Section 3. Section 7-1-1006 is amended to read:
             100           7-1-1006. Inapplicable to certain official investigations.
             101          (1) Sections [ 7-1-1001 through] 7-1-1002 and 7-1-1003 do not apply [when] if an
             102      examination of [records] a record is a part of an official investigation by:
             103          (a) local police;
             104          (b) a sheriff;
             105          (c) a peace officer;
             106          (d) a city attorney;
             107          (e) a county attorney;
             108          (f) a district attorney;
             109          (g) the attorney general;
             110          (h) the Department of Public Safety;
             111          (i) the Office of Recovery Services of the Department of Human Services;
             112          (j) the Insurance Department;
             113          (k) the Department of Commerce;
             114          (l) the Benefit Payment Control Unit or the Payment Error Prevention Unit of the
             115      Department of Workforce Services;
             116          (m) the state auditor; or
             117          (n) the State Tax Commission.
             118          (2) Except for the Office of Recovery Services, if a governmental entity listed in
             119      Subsection (1) seeks a record, the entity shall obtain the record as follows:
             120          (a) if the record is a nonprotected record, by request in writing that:

             121          (i) certifies that an official investigation is being conducted; and
             122          (ii) is signed by a representative of the governmental entity that is conducting the
             123      official investigation; or
             124          (b) if the record is a protected record, by obtaining:
             125          (i) a subpoena authorized by statute; [or]
             126          (ii) other legal process:
             127          (A) ordered by a court of competent jurisdiction; and
             128          (B) served upon the financial institution[.]; or
             129          (iii) written permission from all account holders of the account referenced in the record
             130      to be examined.
             131          (3) If the Office of Recovery Services seeks a record, [it] the Office of Recovery
             132      Services shall obtain the record pursuant to:
             133          (a) Subsection 62A-11-104 (7);
             134          (b) Section 62A-11-304.1 ;
             135          (c) Section 62A-11-304.5 ; or
             136          (d) Title IV, Part D of the Social Security Act as codified in 42 U.S.C. 651 et seq.
             137          (4) A financial institution may not give notice to [any] an account holder or person
             138      named or referenced within the record disclosed pursuant to Subsection (2)(a).
             139          (5) In accordance with Section 7-1-1004 , the [agency] governmental entity conducting
             140      the official investigation that obtains a record from a financial institution under this section
             141      shall reimburse the financial institution for costs reasonably and directly incurred by the
             142      financial institution.
             143          Section 4. Section 7-1-1007 is amended to read:
             144           7-1-1007. Liability of financial institutions.
             145          A financial institution is not liable to [any] an account holder or person named or
             146      referenced within a record:
             147          (1) for [any] a disclosure that is the result of a subpoena, order, or request made
             148      pursuant to Sections 7-1-1001 through 7-1-1006 if the financial institution reasonably believes
             149      that the subpoena, order, or request is properly made under Sections 7-1-1001 through
             150      7-1-1006 ; or
             151          (2) for [any] a disclosure or action taken in good faith pursuant to a data match or

             152      administrative subpoena provided for by [the statutes] a statute listed in Subsection
             153      7-1-1006 (3).

Legislative Review Note
    as of 1-28-09 4:25 PM

Office of Legislative Research and General Counsel

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