For the purposes of this part, the ɔllowing definitions shall apply:

(a) "Financial institution" means ny office of a bank, savings bank, ard issuer as defined in section 103 of he Consumers Credit Protection Act 15 U.S.C. 1602(n)), industrial loan ompany, trust company, savings and Dan, building and loan, or homestead ssociation (including cooperative anks), credit union, or consumer fiance institution, located in any State r territory of the United States, the District of Columbia, Puerto Rico, uam, American Samoa, or the Virgin slands.

(b) "Financial record" means an riginal of, a copy of, or information nown to have been derived from, any ecord held by a financial institution ertaining to a customer's relationship ith the financial institution.

(c) "Government authority" means ny agency or department of the nited States, or any officer, employe or agent thereof.

(d) "Person" means an individual or partnership of five or fewer individ

als.

(e) "Customer" means any person or uthorized representative of that erson who utilized or is utilizing any ervice of a financial institution, or for hom a financial institution is acting r has acted as a fiduciary, in relation > an account maintained in the peron's name. "Customer" does not inlude corporations or partnerships omprised of more than five persons. (f) “Directly incurred costs" means osts incurred solely and necessarily as consequence of searching for, reproucing or transporting books, papers, ecords, or other data, in order to omply with legal process or a formal

written request or a customer's authorization to produce a customer's financial records. The term does not include any allocation of fixed costs (overhead, equipment, depreciation, etc.). 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.

§ 219.3 Cost reimbursement.

Except as hereinafter provided, a government authority requiring or requesting access to financial records pertaining to a customer shall pay to the financial institution that assembles or provides the financial records a fee for reimbursement of reasonably necessary costs which have been directly incurred according to the following schedule:

(a) Search and processing costs. (1) Reimbursement of search and processing costs shall be the total amount of personnel direct time incurred in locating and retrieving, reproducing, packaging and preparing financial records for shipment.

(2) The rate for search and processing costs is $10 per hour per person, computed on the basis of $2.50 per quarter hour or fraction thereof, and is limited to the total amount of personnel time spent in locating and retrieving documents or information or reproducing or packaging and preparing documents for shipment where required or requested by a government authority. Specific salaries of such persons shall not be included in search costs. In addition, search and processing costs do not include salaries, fees, or similar costs for analysis of material or for managerial or legal advice, expertise, research, or time spent for any of these activities. 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 rate specified in this paragraph.

(b) Reproduction costs. (1) Reimbursement for reproduction costs shall be for costs incurred in making copies of documents required or requested.

(2) The rate for reproduction costs for making copies of required or requested documents is 15 cents for each page, including copies produced by reader/printer reproduction processes. Photographs, films, and other materials are reimbursed at actual cost.

(c) Transportation costs. Reimbursement for transportation costs shall be for (1) necessary costs, directly incurred, to transport personnel to locate and retrieve the information required or requested; and (2) necessary costs, directly incurred solely by the need to convey the required or requested material to the place of examination.

§ 219.4 Exceptions.

A financial institution is not entitled to reimbursement under the Act for costs incurred in assembling or providing the following financial records or information:

(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 provided in connection with a government authority's consideration or administration of assistance to a customer in the form of a government loan, loan guaranty, or loan insurance program; or as an incident to processing an application for assistance to a customer in the form of a government loan, loan guaranty, or loan insurance agreement; or as an incident to processing a default on, or administering, a government-guaranteed or insured loan, as necessary to permit a responsible government authority to carry out its responsibilities under the loan, loan guaranty, or loan insurance agreement.

(c) Nonidentifiable information. Financial records that are not identified with or identifiable as being derived

from the financial records of a partic ular customer.

(d) Financial supervisory agencies Financial records disclosed to a financial supervisory agency in the exercise of its supervisory, regulatory, or mone tary functions with respect to a finan cial institution.

(e) Internal Revenue summons. F nancial records disclosed in accordanc with procedures authorized by the In ternal Revenue Code.

(f) Federally required reports. Finan cial records required to be reported accordance with any federal statute c: rule promulgated thereunder (such a the Bank Secrecy Act).

(g) Government civil or crimine. litigation. Financial records sought b a government authority under the Federal Rules of Civil or Criminal Procedure or comparable rules of other courts in connection with litigation & which the government authority and the customer are parties.

(h) Administrative agency subpoe nas. Financial records sought by a gor ernment authority pursuant to an ac ministrative subpoena issued by an ad ministrative law judge in an adjudica tory proceeding subject to section 55+ of Title 5, United States Code, and to which the government authority and the customer are parties.

(i) Identity of accounts in limited circumstances. Financial information sought by a government authority, accordance with the Right to Finan cial Privacy Act procedures and for & legitimate law enforcement inquiry and limited only to the name, address account number and type of accoun of any customer or ascertainable group of customers associated (1) with a financial transaction or class of f nancial transactions, or (2) with a for eign country or subdivision thereof in the case of a government authority ex ercising financial controls over foreign accounts in the United States under section 5(b) of the Trading With the Enemy Act (50 U.S.C. App. 5(b)); the International Emergency Econom Powers Act (Title II, Pub. L. 95-223 or section 5 of the United Nations Par ticipation Act (22 U.S.C. 287(c).

(j) Investigation of a financial insti tution or its noncustomers. Financia records sought by a government a

al record

Chapter II-Federal Reserve System

thority in connection with a lawful Superproceeding, investigation, examinadisclotion, or inspection directed at the fi

gency in t regulates

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enue su

nancial institution in possession of such records or at a legal entity which is not a customer.

(k) General Accounting Office requests. Financial records sought by the General Accounting Office pursuant to an authorized proceeding, investigathorizetion, examination or audit directed at a government authority.

closed in a

e.

red

(1) Securities and Exchange Commisto be sion requests. Until November 10, 1980, federal financial records sought by the Securiereunties and Exchange Commission.

ecords

(a) Limitations. Payment for reasonrity Cably necessary, directly incurred costs or Crito financial institutions shall be limitrules ed to material required or requested. ith (b) Separate consideration of compotautnent costs. Payment shall be made es only for costs that are both directly agency incurred and reasonably necessary. In ought determining whether costs are reasonuant ably necessary, search and processing, sued by reproduction, and transportation costs nan shall be considered separately.

to se (c) Compliance with legal process, Code request, or authorization. No payment uthor shall be made until the financial institution satisfactorily complies with the legal process or formal written reinfo quest, or customer authorization, uth except that in the case where the legal t to process or formal written request is s and withdrawn, or the customer authorizanttion is revoked, or where the customer successfully challenges access by or of disclosure to a government authority, the financial institution shall be reimdbursed for reasonably necessary costs directly incurred in assembling financial records required or requested to here be produced prior to the time that the government authority notifies the institution that the legal process or request is withdrawn or defeated, or that the customer has revoked his or her authorization.

(d) Itemized bill or invoice. No payment shall be made unless the financial institution submits an itemized bill or invoice showing specific details concerning the search and processing, reproduction, and transportation costs.

445

§ 219.6 Payment procedures.

$219.7

(a) Notice to submit invoice. Promptly following a government authority's service of legal process or request, the government authority shall notify the financial institution that an itemized bill or invoice must be submitted for payment and shall furnish an office address for this purpose.

(b) Special notice. If a government authority withdraws the legal process or formal written request, or if the customer revokes his or her authorization, or if the legal process or request has been successfully challenged by the customer, the government authority shall promptly notify the financial institution of these facts, and shall also notify the financial institution that the itemized bill or invoice must be submitted for payment of costs incurred prior to the time that the financial institution receives this notice. § 219.7 Effective date.

This regulation shall become effective October 1, 1979.

ority in connection with a lawful oceeding, investigation, examinaon, or inspection directed at the fincial institution in possession of ch records or at a legal entity which not a customer.

(k) General Accounting Office reests. Financial records sought by the eneral Accounting Office pursuant an authorized proceeding, investiga›n, examination or audit directed at government authority.

(1) Securities and Exchange Commison requests. Until November 10, 1980, ancial records sought by the Securies and Exchange Commission.

19.5 Conditions for payment.

a) Limitations. Payment for reasonly necessary, directly incurred costs financial institutions shall be limitEto material required or requested. (b) Separate consideration of compont costs. Payment shall be made ly for costs that are both directly curred and reasonably necessary. In termining whether costs are reasonly necessary, search and processing, production, and transportation costs all be considered separately.

c) Compliance with legal process, quest, or authorization. No payment all be made until the financial instition satisfactorily complies with the gal process or formal written reest, or customer authorization, cept that in the case where the legal ocess or formal written request is thdrawn, or the customer authorizaon is revoked, or where the customer ccessfully challenges access by or sclosure to a government authority, e financial institution shall be reimirsed for reasonably necessary costs rectly incurred in assembling finanal records required or requested to produced prior to the time that the vernment authority notifies the initution that the legal process or reest is withdrawn or defeated, or at the customer has revoked his or er authorization.

[(d) Itemized bill or invoice. No payent shall be made unless the finanal institution submits an itemized ll or invoice showing specific details oncerning the search and processing, production, and transportation

sts.

invoice.

§ 219.6 Payment procedures. (a) Notice to submit Promptly following a government authority's service of legal process or request, the government authority shall notify the financial institution that an itemized bill or invoice must be submitted for payment and shall furnish an office address for this purpose.

(b) Special notice. If a government authority withdraws the legal process or formal written request, or if the customer revokes his or her authorization, or if the legal process or request has been successfully challenged by the customer, the government authority shall promptly notify the financial institution of these facts, and shall also notify the financial institution that the itemized bill or invoice must be submitted for payment of costs incurred prior to the time that the financial institution receives this notice.