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Title XXVI TRADE AND COMMERCE

Chapter 408

previous next Effective - 28 Aug 1989bottom

  408.692.  Law not applicable to government authority, when — procedure. — 1.  Except for sections 408.680 and 408.700, nothing in sections 408.675 to 408.700 shall apply when financial records are sought by a government authority:

  (1)  In connection with a lawful proceeding, investigation, examination, or inspection directed at the financial institution in possession of such records or at a legal entity which is not a customer; or

  (2)  In connection with the authority's consideration or administration of assistance to the customer in the form of a government loan, loan guaranty, or loan insurance program.

  2.  When financial records are sought pursuant to this section, the government authority shall submit to the financial institution the notice required by subsection 2 of section 408.680. For access pursuant to subdivision (2) of subsection 1 of this section, no further certification shall be required for the subsequent access by the applicable government authority during the term of the loan, loan guaranty, or loan insurance agreement.

  3.  After August 28, 1989, whenever a customer applies for participation in a government loan, loan guaranty, or loan insurance program, the government authority administering such program shall give the customer written notice of the authority's access rights under this subsection.  No further notification shall be required for subsequent access by that authority during the term of the loan, loan guaranty, or loan insurance agreement.

  4.  Financial records obtained pursuant to this section may be used only for the purpose for which they were originally obtained, and may be transferred to another agency or department only when the transfer is to facilitate a lawful proceeding, investigation, examination, or inspection directed at the financial institution in possession of such records, or at a legal entity which is not a customer, except that:

  (1)  Nothing in sections 408.675 to 408.700 prohibits the use or transfer of a customer's financial records needed by counsel representing a government authority in a civil action arising from a government loan, loan guaranty, or loan insurance agreement;

  (2)  Nothing in sections 408.675 to 408.700 prohibits a government authority providing assistance to a customer in the form of a loan, loan guaranty, or loan insurance agreement from using or transferring financial records necessary to process, service or foreclose a loan, or to collect on an indebtedness to the government resulting from a customer's default.

  5.  Notification that financial records obtained pursuant to this section which may relate to a potential civil, criminal, or regulatory violation by a customer may be given to an agency or department with jurisdiction over that violation, and such agency or department may then seek access to the records pursuant to the provisions of sections 408.675 to 408.700.

  6.  Each financial institution shall keep a notation of each disclosure made pursuant to subdivision (2) of subsection 1 of this section, including the date of such disclosure and the government authority to which it was made.  The customer shall be entitled to inspect this information.  Except for sections 408.696 and 408.700, nothing in sections 408.675 to 408.700 shall apply to any subpoena or court order issued in connection with proceedings before a grand jury.

  7.  Nothing in sections 408.675 to 408.700 shall prohibit a government authority from obtaining financial records from a financial institution if the government authority determines that delay in obtaining access to such records would create imminent danger of:

  (1)  Physical injury to any person;

  (2)  Serious property damage; or

  (3)  Flight to avoid prosecution.  

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Within five days of obtaining access to financial records under this subsection the government authority shall file with the appropriate court a signed, sworn statement of a supervisory official of a rank designated by the head of the government authority setting forth the grounds for the emergency access.  The government authority shall thereafter comply with the notice provisions of subsection 5 of section 408.685.  The government authority shall compile an annual tabulation of the occasions in which this subsection was used.

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(L. 1989 H.B. 82 § 12)


---- end of effective   28 Aug 1989 ----

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