Reimbursement to FIs for Providing Financial Records

Question 1

First National Bank receives an order from a federal court to supply financial information pursuant to a request from the U.S. Attorney. The request is made pursuant to the Federal Rules of Civil Procedure in connection with a lawsuit involving the Federal Aviation Administration and a customer of the bank. The bank hires an attorney to review the order and to advise the bank of its liability for various courses of action. The bank pays the attorney $1,500. The bank spends 50 employee hours to retrieve in-house records and charges the government $22 per hour. The bank also makes 450 photocopies at a professional copy company at $0.20 per copy. Which costs incurred by the bank are reimbursable?

a. The hourly employee expense at $22 per hour and the photocopying expense are reimbursable to the bank.
b. None of the expenses is reimbursable.
c. All of the expenses are reimbursable.
d. Except for the attorney’s fees, the expenses incurred by the bank are reimbursable.

Answer 1

b. None of the expenses is reimbursable.

Expenses for producing records sought by a government agency under the Rules of Criminal or Civil Procedure in connection with litigation where the parties are government and the customer are not reimbursed by Regulation S.

Question 2

Which directly incurred costs are reimbursable to a bank for assembling or providing customer financial records to a government authority?

a. Internal Revenue Service summons
b. Document reproduction and shipping costs
c. Financial records relating to government loan programs
d. All financial records, whether identifiable to a particular customer or not

Answer 2

b. Document reproduction and shipping costs

These are the only costs that are directly related to the request.

Question 3

First National Bank has received a request from the Securities and Exchange Commission (SEC) for financial records. The customer has given permission to disclose the information. The bank can be reimbursed at the stated rate for all but one of the following costs. Which cost(s) would NOT be reimbursed?

a. Actual fee paid to an offsite storage facility for retrieving and copying records
b. Employee time spent in retrieving and organizing the records at a rate of $22 per hour
c. Actual costs of the CDs the electronic records will be stored on
d. $500 paid to the bank’s attorney for a review of the SEC request to determine its validity and to advise the bank of its course of action

Answer 3

d. $500 paid to the bank’s attorney for a review of the SEC request to determine its validity and to advise the bank of its course of action

Specific costs for expert and legal advice are not reimbursable.

Question 4

First National Bank received the following requests for financial information. For which of them would the bank receive reimbursement for its costs under Regulation S?

a. A summons from the IRS for information on several customer checking accounts
b. A request from the FINRA for records of the bank in connection with an investigation of the bank
c. A request from the GAO for information pursuant to an audit of the Government National Mortgage Association
d. A request from the VA for a customer’s name and address pursuant to an internal VA investigation of the customer’s activities

Answer 4

d. A request from the VA for a customer’s name and address pursuant to an internal VA investigation of the customer’s activities

This exemption is solely for the VA’s benefits program.

Question 5

Reg S conditions that the bank may receive reimbursement for gathering and providing financial data records pursuant to __________________.

Answer 5

Right to Financial Privacy Act (RFPA)

Question 6

T/F: Government authority, or a court issuing an order or subpoena in connection with grand jury proceedings, shall pay for the reasonably necessary costs directly incurred for “searching for, reproducing, transporting books, papers, records, or other data.”

Answer 6

True

Question 7

What are the rates for reprinting records?

Answer 7

$0.25 per page

Question 8

What is the rate for technical or clerical help?

Answer 8

$22/hr

Question 9

What is the rate for manager or tech specialist help?

Answer 9

$30/hr

Question 10

What is the rate for storage media?

Answer 10

actual cost