provisions intended to implement Chapter 1, Title I of the Act dealing with recordkeeping by FDIC-insured banks and FSLIC-insured savings and loan associations, because different enforcement sanctions apply to that Chapter 1 than apply to the rest of Title I dealing with recordkeeping and to Title II dealing with reports.

Chapter 2 of Title I deals with "uninsured banks" and

"uninsured institutions" of any type. Civil and criminal penalties in sections 125, 126 and 127 of Chapter 2 apply only to Chapter 2, not to insured banks or insured savings and loan associations that are covered by Chapter 1 of Title I. Injunctive remedies under section 124 of Chapter 2 are likewise restricted to violations of regulations under Chapter 2.

As our letter stated in part:

"Again, as noted in the House Report, supra, page 19:

'No specific provision is made in the bill for
the enforcement of its requirements with respect

to insured banks and insured institutions. This

is because the necessary legal and administrative machinery is already in existence. Such is not the case, however, with respect to other institutions. For that reason, Chapter 2 contains such provisions. Section 124 authorizes injunctive

relief, and section 125 permits the imposition

of a civil penalty not exceeding $1,000 for each

violation. '

Despite this fact, the proposed regulation would have both civil penalties and criminal penalties apply equally to FSLIC-insured institutions with reference to the provisions of Chapter 1, Title I of the statute, as well as to all other entities subject to the regulation in its tentative form. We respectfully submit that such a treatment of sanctions exceeds the Secretary's authority under the statute. "'

Unfortunately, the final regulations were not brought into line with

this National League suggestion. Therefore the Secretary of the Treasury has subjected himself to a charge of acting ultra vires on this issue.

Availability of Records

to Other Federal Agencies

The National League's June 24, 1971 letter of comment further

expressed concern that under the proposed regulations, the Treasury Department could make available to other Federal departments or agencies records required to be sent to it by financial institutions, without affording any opportunity to the persons mentioned in those records to present their views of the matter in an administrative proceeding.

The National League's letter of comment stated in part:
"Proposed section 103.42 is so broad as to place in jeopardy
the confidential relationship of a financial institution to its

customers, because it would make any information in

reports those institutions are required to give the Secretary
of the Treasury available to 'any other department or agency
of the United States' merely upon the ex parte request of the
head of that department or agency upon an assertion that the
particular information desired is officially needed in connec-
tion with a criminal, tax or regulatory investigation or pro-
ceeding. While section 212 of the statute makes it lawful for
report information to be made available to other Federal
agencies, it vests power in the Secretary of the Treasury to
prescribe by regulation the conditions and procedures. In line
with the spirit of section 213 that makes the provisions of 5
U. S. Code, Chapters 5 and 7 applicable to this statute with
the exception of 5 U. S. Code, section 552 dealing with
disclosure of information, the Secretary should provide some
administrative procedure whereby the institutions and customers
involved can present their side of the issue, if they wish to do so,
before the request of a Federal agency head for information is
granted by the Secretary of the Treasury.

As issued, the final regulations paid no heed to this suggestion.

No change in the Act would be required to permit the Department

of the Treasury to adopt all of these three suggestions made by the National

League, if it could be persuaded to do so.

The National League respectfully requests the Subcommittee

to keep these suggestions in mind in carrying out the legislative overseer

duties the Congress placed on itself in the Legislative Reorganization Act

of 1946.

83-436 - 72 - 22

Please excuse the slight delay in responding to your letter of August 22, 1972. I wanted to give as many of our members as possible a chance to respond prior to communicating to you on behalf of the National Association of Attorneys General.

There is no formal machinery by which our Association
can take a position between its regularly scheduled
summer and mid-winter meetings. Occasionally, on
matters of critical importance, our Executive Committee
has taken a position, but clearly indicating that it cannot
speak for the Association itself. Even this limited ex-
pression takes more time than you have indicated is
available.

The matter was referred to the Chairman of our Committee on Criminal Law and Law Enforcement, Attorney General Clarence A. H. Meyer of Nebraska, who has taken a personal position and has informed the members of his committee as well as the Executive Committee of that decision. I would refer you to his Senators, Roman Hruska and Carl Curtis, for the full statement of his position. Stated simply, his recommendation was that the Association oppose the enactment of S. 3828 and S. 3814. I have referred the matter