Title 12--Banks and Banking

CHAPTER II--FEDERAL RESERVE SYSTEM

PART 219--REIMBURSEMENT FOR PROVIDING FINANCIAL RECORDS; RECORD KEEPING REQUIREMENTS FOR CERTAIN FINANCIAL RECORDS (REGULATION S)

Return to Regulation Index
  

Sec. 219.1 Authority, purpose and scope.
    

Return to top
 

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    This subpart of Regulation S (12 CFR part 219, subpart A) is issued 
by the Board of Governors of the Federal Reserve System (the Board) 
under section 1115 of the Right to Financial Privacy Act (the Act) (12 
U.S.C. 3415). It establishes the rates and conditions for reimbursement 
of reasonably necessary costs directly incurred by financial 
institutions in assembling or providing customer financial records to a 
government authority pursuant to the Act.

[60 FR 233, Jan. 3, 1995]

Sec. 219.2 Definitions.
     

Return to top

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    For the purposes of this subpart, the following definitions shall 
apply:
    Customer means any person or authorized representative of that 
person who uses any service of a financial institution, or for whom a 
financial institution acts or has acted as a fiduciary in relation to an 
account maintained in the person's name. Customer does not include 
corporations or partnerships comprised of more than five persons.
    Financial institution means any office of a bank, savings bank, card 
issuer as defined in section 103 of the Consumers Credit Protection Act 
(15 U.S.C. 1602(n)), industrial loan company, trust company, savings 
association, building and loan, or homestead association (including 
cooperative banks), credit union, or consumer finance institution, 
located in any State or territory of the United States, the District of 
Columbia, Puerto Rico, Guam, American Samoa, or the Virgin Islands.
    Financial record means an original or copy of, or information known 
to have been derived from, any record held by a financial institution 
pertaining to a customer's relationship with the financial institution.
    Government authority means any agency or department of the United 
States, or any officer, employee or agent thereof.
    Person means an individual or a partnership of five or fewer 
individuals.

[Reg. S, 61 FR 29640, June 12, 1996]

Sec. 219.3 Cost reimbursement.
     

Return to top

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    (a) Fees payable. Except as provided in Sec. 219.4, a government 
authority, or a court issuing an order or subpoena in connection with 
grand jury proceedings, seeking access to financial records pertaining 
to a customer shall reimburse the financial institution for reasonably 
necessary costs directly incurred in searching for, reproducing or

[[Page 395]]

transporting books, papers, records, or other data as set forth in this 
section. The reimbursement schedule for a financial institution is set 
forth in Appendix A to this section. If a financial institution has 
financial records that are stored at an independent storage facility 
that charges a fee to search for, reproduce, or transport particular 
records requested, these costs are considered to be directly incurred by 
the financial institution and may be included in the reimbursement.
    (b) Search and processing costs. (1) Reimbursement of search and 
processing costs shall cover the total amount of personnel time spent in 
locating, retrieving, reproducing, and preparing financial records for 
shipment. Search and processing costs shall not cover analysis of 
material or legal advice.
    (2) If itemized separately, search and processing costs may include 
the actual cost of extracting information stored by computer in the 
format in which it is normally produced, based on computer time and 
necessary supplies; however, personnel time for computer search may be 
paid for only at the rates specified in Appendix A to this section.
    (c) Reproduction costs. The reimbursement rates for reproduction 
costs for requested documents are set forth in Appendix A to this 
section. Copies of photographs, films, computer tapes, and other 
materials not listed in Appendix A to this section are reimbursed at 
actual cost.
    (d) Transportation costs. Reimbursement for transportation costs 
shall be for the reasonably necessary costs directly incurred to 
transport personnel to locate and retrieve the requested information, 
and to convey such material to the place of examination.

[Reg. S, 61 FR 29640, June 12, 1996]

            Appendix A to Sec. 219.3--Reimbursement Schedule
Return to top

Reproduction:
    Photocopy, per page--$.25
    Paper copies of microfiche, per frame--$.25
    Duplicate microfiche, per microfiche--$.50
    Computer diskette--$5.00
Search and Processing:
    Clerical/Technical, hourly rate--$11.00
    Manager/Supervisory, hourly rate--$17.00

[Reg. S, 61 FR 29640, June 12, 1996]

Return to top

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    A financial institution is not entitled to reimbursement under this 
subpart for costs incurred in assembling or providing financial records 
or information related to:
    (a) Security interests, bankruptcy claims, debt collection. Any 
financial records provided as an incident to perfecting a security 
interest, proving a claim in bankruptcy, or otherwise collecting on a 
debt owing either to the financial institution itself or in its role as 
a fiduciary.
    (b) Government loan programs. Financial records that are necessary 
to permit the appropriate government authority to carry out its 
responsibilities under a government loan, loan guaranty or loan 
insurance program.
    (c) Nonidentifiable information. Financial records that are not 
identified with or identifiable as being derived from the financial 
records of a particular customer.
    (d) Financial supervisory agencies. Financial records disclosed to a 
financial supervisory agency in the exercise of its supervisory, 
regulatory, or monetary functions with respect to a financial 
institution.
    (e) Internal Revenue summons. Financial records disclosed in 
accordance with procedures authorized by the Internal Revenue Code.
    (f) Federally required reports. Financial records required to be 
reported in accordance with any federal statute or rule promulgated 
thereunder.
    (g) Government civil or criminal litigation. Financial records 
sought by a government authority under the Federal Rules of Civil or 
Criminal Procedure or comparable rules of other courts in connection 
with litigation to which the government authority and the customer are 
parties.
    (h) Administrative agency subpoenas. Financial records sought by a 
government authority pursuant to an administrative subpoena issued by an 
administrative law judge in an adjudicatory proceeding subject to 5 
U.S.C. 554, and to which the government authority and the customer are 
parties.
    (i) Investigation of financial institution or its noncustomer. 
Financial records sought by a government authority in connection with a 
lawful proceeding,

[[Page 396]]

investigation, examination, or inspection directed at the financial 
institution in possession of such records, or at an entity that is not a 
customer as defined in Sec. 219.2 of this part.
    (j) General Accounting Office requests. Financial records sought by 
the General Accounting Office pursuant to an authorized proceeding, 
investigation, examination, or audit directed at a government authority.
    (k) Federal Housing Finance Board requests. Financial records or 
information sought by the Federal Housing Finance Board (FHFB) or any of 
the Federal home loan banks in the exercise of the FHFB's authority to 
extend credit to financial institutions or others.
    (l) Department of Veterans Affairs. The disclosure of the name and 
address of any customer to the Department of Veterans Affairs where such 
disclosure is necessary to, and used solely for, the proper 
administration of benefits programs under laws administered by that 
Department.

[Reg. S, 61 FR 29640, June 12, 1996]

Return to top

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    (a) Direct costs. Payment shall be made only for costs that are both 
directly incurred and reasonably necessary to provide requested 
material. Search and processing, reproduction, and transportation costs 
shall be considered separately when determining whether the costs are 
reasonably necessary.
    (b) Compliance with legal process, request, or authorization. No 
payment may be made to a financial institution until it satisfactorily 
complies with the legal process, the formal written request, or the 
customer authorization. When the legal process or formal written request 
is withdrawn, or the customer authorization is revoked, or where the 
customer successfully challenges disclosure to a grand jury or 
government authority, the financial institution shall be reimbursed for 
the reasonably necessary costs incurred in assembling the requested 
financial records prior to the time the financial institution is 
notified of such event.
    (c) Itemized bill or invoice. No reimbursement is required unless a 
financial institution submits an itemized bill or invoice specifically 
detailing its search and processing, reproduction, and transportation 
costs. Search and processing time should be billed in 15-minute 
increments.

[Reg. S, 61 FR 29641, June 12, 1996]

Return to top

    Subpart A--Reimbursement to Financial Institutions for Providing 
                            Financial Records
 
    (a) Notice to submit invoice. Promptly following a service of legal 
process or request, the court or government authority shall notify the 
financial institution that it must submit an itemized bill or invoice in 
order to obtain payment and shall furnish an address for this purpose.
    (b) Special notice. If a grand jury or government authority 
withdraws the legal process or formal written request, or if the 
customer revokes the authorization, or if the legal process or request 
has been successfully challenged by the customer, the grand jury or 
government authority shall promptly notify the financial institution of 
these facts, and shall also notify the financial institution that it 
must submit an itemized bill or invoice in order to obtain payment of 
costs incurred prior to the time the financial institution receives this 
notice.

[Reg. S, 61 FR 29641, June 12, 1996; 61 FR 32317, June 24, 1996]

Return to top

Subpart B--Recordkeeping and Reporting Requirements for Funds Transfers 
                        and Transmittals of Funds
 
    Authority: 12 U.S.C. 1829b(b)(2) and (3).

    Source: 60 FR 233, Jan. 3, 1995, unless otherwise noted.

    This subpart of Regulation S (12 CFR part 219, subpart B) is issued 
by the Board under the authority of section 21(b) of the Federal Deposit 
Insurance Act (12 U.S.C. 1829b), as amended by the Annunzio-Wylie Anti-
Money Laundering Act of 1992 (Pub. L. 102-550, Title XV; 106 Stat. 3672, 
4044), which authorizes the Board and the Secretary of the Treasury 
jointly to prescribe recordkeeping and reporting requirements for 
domestic wire transfers by insured depository institutions; and which 
also

[[Page 397]]

requires the Board and the Treasury jointly to prescribe recordkeeping 
and reporting requirements for international wire transfers by insured 
depository institutions and by nonbank financial institutions. The 
definitions and recordkeeping and reporting requirements referenced in 
this subpart are promulgated and administered jointly by the Board and 
the Treasury and are codified in 31 CFR 103.11 and 103.33(e) and (f). 
This subpart does not apply to a particular person or class of persons 
or a particular transaction or class of transactions to the extent that 
the Treasury has determined that 31 CFR 103.33(e) or (f) do not apply to 
that person, transaction, or class of persons or transactions. These 
recordkeeping and reporting requirements will assist in the prosecution 
of money laundering activities and are determined to have a high degree 
of usefulness in criminal, tax or regulatory investigations or 
proceedings.

[60 FR 233, Jan. 3, 1995, as amended by Reg. S, 61 FR 58975, Nov. 20, 
1996]

Return to top

Subpart B--Recordkeeping and Reporting Requirements for Funds Transfers 
                        and Transmittals of Funds
 
    The following terms are defined in 31 CFR 103.11 under the joint 
authority of the Board and the Treasury:

    Accept.
    Beneficiary.
    Beneficiary's bank.
    Established customer.
    Execution date.
    Funds transfer.
    Intermediary bank.
    Intermediary financial institution.
    Originator.
    Originator's bank.
    Payment date.
    Payment order.
    Receiving bank.
    Receiving financial institution.
    Recipient.
    Recipient's financial institution.
    Sender.
    Transmittal of funds.
    Transmittal order.
    Transmittor.
    Transmittor's financial institution.

Return to top

Subpart B--Recordkeeping and Reporting Requirements for Funds Transfers 
                        and Transmittals of Funds
 
    (a) Domestic and international funds transfers by insured depository 
institutions. The Board and the Treasury are authorized to promulgate 
jointly recordkeeping and reporting requirements for domestic and 
international funds transfers by insured depository institutions 
whenever the agencies determine that the maintenance of such records has 
a high degree of usefulness in criminal, tax, or regulatory 
investigations or proceedings. These regulations are codified at 31 CFR 
103.33(e). For the purposes of this subpart, the provisions of 31 CFR 
103.33(e) apply only to funds transfers by insured depository 
institutions.
    (b) International transmittals of funds by financial institutions 
other than insured depository institutions. The Board and the Treasury 
are required to promulgate jointly reporting and recordkeeping 
requirements for international transmittals of funds by financial 
institutions, including brokers and dealers in securities and businesses 
that provide money transmitting services. In prescribing these 
requirements, the Board and the Treasury take into account the 
usefulness of these records in criminal, tax, or regulatory 
investigations or proceedings and the effect the recordkeeping will have 
on the cost and efficiency of the payment system. These regulations are 
codified at 31 CFR 103.33(f). For the purposes of this subpart, the 
provisions of 31 CFR 103.33(f) apply only to international transmittals 
of funds.

Return to top

Subpart B--Recordkeeping and Reporting Requirements for Funds Transfers 
                        and Transmittals of Funds
 
    All records that are required to be retained by this subpart shall 
be retained for a period of five years. All these records shall be filed 
or stored in such a way as to be accessible within a reasonable period 
of time, taking into consideration the nature of the record and the 
amount of time that has expired since the record was made. Any records 
required to be retained by this subpart shall be made available to the 
Board upon request.

Return to top