munications, 18 U.S.C. 2510, 2511, by deleting the modifier "aural". Apparently, the purpose is to cover, among other things, interception of data transmissions by wire or microwave between computers. Given the enormous amounts of personal and business information that can be transmitted in this manner, the Department of Justice agrees that the need to protect personal privacy and the security of business transactions makes this change desirable. Accordingly, the Department of Justice supports expansion of Title III prohibitions to cover all forms of electronic information transmission.

Čong.,

We point out, however, that deletion of the word "aural," without more, might sweep beyond this desirable goal to criminalize conduct that should not be subject to penal sanctions. For example, if "aural" was deleted, the statute would extend to the use of any kind of "device" (arguably even ordinary reading glasses) to examine toll records or trace telephone calls, calls, forms of activity clearly not intended to be covered by these statutes. See S. Rep. No. 1097, 90th Co 2d Sess. 91 (1968). As a further example of potential overbreadth if "aural" alone were to be deleted, the statute might then proscribe the use of a mechanical filing system to retrieve information previously sent by wire. Since a violation of the wiretap statutes carries serious consequences, including criminal penalties and a prohibition on use of the information in court or otherwise (see 18 U.S.C. 2511(1)(d), 2515), we are concerned that any expansion of these statutes be carefully considered and tailored to cover only those types of interception that pose a genuine threat to privacy comparable to the "aural acquisition" of the contents of wire or oral communications now covered by the law.

Accordingly, while favoring expansion of the wiretap statutes to encompass non-aural acquisitions of communications involving computers or transfers of symbolic or other information between persons or information processing facilities, we recommend that the Committee act to avoid the potential overbreadth problems discussed.

REMAINING TITLES (IV AND V)

Titles IV and V deal with the issues of criminal penalties and application of the bill to Congress. As previously noted, we differ with the judgments reflected therein that criminal penalties are appropriate for Title I violations, and with the exemption of Congress from the legislation.

TITLE XI-RIGHT TO FINANCIAL PRIVACY 1

SEC. 1100. This title may be cited as the "Right to Financial Privacy Act of 1978".

DEFINITIONS

SEC. 1101. For the purpose of this title, the term

(1) "financial institution" means any bank, savings bank, industrial loan company, trust company, savings and loan, building and loan, or homestead association (including cooperative banks) or credit union organized under the laws of, or having its principal place of business in, any State or the United States. (2) "financial records" means any original or any copy of any record held by a financial institution, containing information pertaining pertaining to a customer's relationship with the financial institution, that individually identifies the customer of that institution;

(3) "government authority" means the Congress of the United States, or any agency or department of the United States, or any State or any political subdivision of any State, or any officer, employee or agent of any of the foregoing; (4) "State" means the several States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American Samoa, the Trust Territory of the Pacific Islands, and any other territory or possession of the United States;

(5) "person" means an individual only and does not include a partnership, corporation, association, trust, or any other form of legal entity;

(6) "customer" means a person who utilized or is utilizing any service of an office of a financial institution, or for whom a financial institution is acting or has acted as a fiduciary, in relation to an account maintained in the person's name;

This proposal represents the combined views of the Departments of Justice and the Treasury.

(7) "supervisory agency" means, with respect to any particular financial institution, any one or more of the following which has statutory authority to examine or regulate such institution

(A) the Federal Deposit Insurance Corporation;

(B) the Federal Savings and Loan Insurance Corporation;

(C) the Federal Home Loan Bank Board;

(D) the National Credit Union Administration;

(E) the Board of Governors of the Federal Reserve System;

(F) the Comptroller of the Currency;

(G) the Securities and Exchange Commission;

(H) any State banking or securities department or similar agency; or

(I) the Secretary of the Treasury, with respect to the Bank Secrecy Act and the Currency and Foreign Transactions Reporting Act (Public Law 91-508, Title I & II); and

(8) "law enforcement" includes administration or enforcement of any criminal, civil, or regulatory statute or any regulation, rule, or order issued pursuant thereto.

CONFIDENTIALITY OF RECORDS-GOVERNMENT AUTHORITIES

SEC. 1102. Except as provided by sections 1103, 1112, 1113, and 1115, no government authority may have access to or obtain copies of, or the information contained in, the financial records of any customer from a financial institution unless the financial records are reasonably described and

(a) such customer has authorized such disclosure in accordance with section 1104;

(b) such financial records are disclosed in response to an administrative subpoena or summons which meets the requirements of section 1105;

(c) such financial records are disclosed in response to a court order, other than a search warrant or federal grand jury subpoena, which meets the requirements of section 1106;

(d) such financial records are disclosed in response to a search warrant which meets the requirements of section 1107; or

(e) such financial records are disclosed in response to a formal written request from a government authority which meets the requirements of section 1108.

CONFIDENTIALITY OF RECORDS FINANCIAL INSTITUTIONS

SEC. 1103. (a) No financial institution, or officer, employee or agent of a financial institution, may provide to any government authority access to, or the information contained in, the financial records of any customer except in accordance with the provisions of this title.

(b) Every financial institution shall, within one year after the enactment of this title and yearly thereafter, notify its current customers of their rights under this title.

(c) Nothing in this section shall preclude any financial institution, or any officer, employee or agent of a financial institution, from providing to a government authority information that such institution, or officer, employee or agent, believes may be relevant to a possible violation of any statute or regulation.

CUSTOMER AUTHORIZATION

SEC. 1104. (a) A customer may authorize disclosure under section 1102 (a) if he furnishes to the financial institution and to the government authority seeking to obtain such disclosure a signed and dated statement which

(1) authorizes such disclosure for a period not in excess of three months; (2) states that the customer may revoke such authorization at any time before the financial records are disclosed;

(3) identifies generally the financial records which are authorized to be disclosed; and

(4) specifies the government authority to which such records may be disclosed.

(b) No such authorization shall be required as a condition of doing business with such financial institution.

(c) The customer has the right, unless the government authority obtains a court order as provided in section 1109(b) and (c), to obtain a copy of the record which the financial institution shall keep of all instances in which the customer's record is disclosed to a government authority pursuant to this section, including the identity of the government authority to which such disclosure is made.

ADMINISTRATIVE SUBPOENA AND SUMMONS

SEC. 1105. A government authority may obtain financial records under section 1102(b) pursuant to an administrative subpoena or summons otherwise authorized by law only if

(a) such subpeona or summons is issued in order to obtain information which may be relevant to a legitimate law enforcement purpose; and (b) The notice provisions of section 1109 and the customer challenge provisions of section 1110 have been complied with.

COURT ORDER OTHER THAN A SEARCH WARRANT OR A FEDERAL GRAND JURY

SUBPOEΝΑ

SEC. 1106. A government authority may obtain financial records under section 1102(c) pursuant to a court order other than a search warrant or federal grand jury subpoena only if

(a) such order is authorized by law and is issued in order to obtain information which may be relevant to a legitimate law enforcement purpose; and (b) the notice provisions of section 1109 and the customer challenge provisions of section 1110 have been complied with.

SEARCH WARRANTS

SEC. 1107. A government authority may obtain financial records under section 1102(d) only if it obtains a search warrant pursuant to the Federal Rules of Criminal Procedure or applicable State law. The notice provisions of section 1109(d) shall apply.

FORMAL WRITTEN REQUEST

SEC. 1108. A government authority may obtain financial records under section 1102(e) pursuant to a formal written request only if

(a) no administrative summons or subpoena authority reasonably appears to be available to that government authority to obtain financial records for the purpose for which such records are sought;

(b) the request is authorized by regulations promulgated by the head of the agency or department;

(c) the request is issued in order to obtain information which may be relevant to a legitimate law enforcement purpose; and

(d) the notice provisions of section 1109 and the customer challenge provisions of section 1110 have been complied with.

NOTICE PROVISIONS

SEC. 1109. (a) When access to financial records is sought pursuant to section 1102(b) (administrative subpoena or summons), 1102(c) (court order other than a search warrant or federal grand jury subpoena), or 1102(e) (formal written request) the government authority shall

(1) serve upon the customer or mail by registered or certified mail to his last known address a copy of the process or request together with the following notice:

"Records concerning your transactions which are held by the financial institution named in the attached process or request are being sought by (agency or department or authority) in accordance with the Right to Financial Privacy Act of 1978 U.S.C. for the following general

purpose:

"If you desire to oppose the disclosure of the records, you must within seven (7) days of the service or mailing of this notice, petition the appropriate Federal or state court to prohibit disclosure of the records and provide such court with a sworn statement of the reasons why you believe the records should not be disclosed. Otherwise, upon the expiration of seven days, the records sought may be made available."; and

(2) concurrent with notification of the customer under subsection (a)(1), serve a copy of the process or request and a notice stating the rights, obligations and liabilities of a financial institution under this title upon the financial institution from which the records are sought.

(b) Upon application of the government authority, the customer notice required under this section may be delayed by order of an appropriate court if the presiding judge or magistrate finds that:

(1) the investigation being conducted is within the lawful jurisdiction of the government authority seeking the financial records;

(2) the records are being sought to obtain information which may be relevant to a legitimate law enforcement purpose; and

(3) there is reason to believe that such notice will result in-
(A) endangering the life or physical safety of any person;
(B) flight from prosecution;

(C) destruction of or tampering with evidence;

(D) intimidation of potential witnesses; or

(E) otherwise jeopardizing an investigation or official proceeding, or unduly delaying a trial or ongoing official proceeding, of the government authority.

(c) (1) If the court makes the findings required in subsections (b)(1), (2) and (3), it shall enter an ex parte order granting the requested delay for a period not to exceed ninety (90) days and an order prohibiting the financial institution from disclosing that records have been obtained or that a request for such records has been made: Provided, That, if the records have been sought by a government authority exercising xercising 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 Economic Powers Act (Title II, Public Law 95-223); or Section 5 of the United Nations Participation Act (22 U.S.C. § 287(c)), and the court finds that there is reason to believe that such notice may endanger the life or physical safety of a customer or group of customers, or any person or group of persons associated with a customer, the court may specify that the dela bye indefinite.

(2) Extensions of the delay of notice of up to ninety (90) days may be granted by the court upon application, but only in accordance with this subsection. Upon expiration of the period of delay of notification, the customer shall be served with or mailed a copy of the process or request together with the following notice:

"Records concerning your transactions which are held by the financial institution named in the enclosed. process or request were supplied to or requested by the government authority named in the process or request on (date). Notification was withheld pursuant to a determination by the (title of court so ordering) that such notice might (state reason). The purpose of the investigation or official proceeding was (purpose)." (d) When access to financial records is sought pursuant to section 1102(d) (search warrants)

(1) No later than ninety nety days days after the government authority serves the search warrant it shall serve upon the customer, or mail by registered or certified mail to his last known address, a copy of the search warrant together with the following notice:

"Records concerning your transactions held by the financial institution named in the attached search warrant were obtained by (agency or department) on (date) for the following general purpose:"

(2) Upon application of the government authority, an appropriate court may grant a delay in the notice required in subsection (1), which delay shall not exceed one hundred and eighty days following the service of the warrant, if the court makes the findings required in section 1109(b). If the court makes such findings, it shall enter an ex parte order granting the requested delay and an order prohibiting the financial institution from disclosing that records have been obtained or that a search warrant for such records has been executed. Additional delays of up to ninety days may be granted by the court upon application, but only in accordance with this subsection. Upon expiration of the period of delay of notification of the customer, the following notice shall be mailed to the customer along with a copy of the search warrant: "Records concerning your transactions held by the financial institution named in the attached search warrant were obtained by (agency or department) on (date). Notification was delayed beyond the statutory ninety-day delay period pursuant to a determination by the court that such notice might (state reason)."

(e) Within thirty days after the expiration of a delay (or each extension thereof) granted under this section by a court of the United States, the judge or

1

magistrate granting the delay shall report to the Administrative Office of the United States Courts:

(1) the fact that a delay or extension of delay was requested;

(2) the nature of the investigation;

(3) the disposition of the request for delay;

(4) the total period of time for which notice had been previously withheld; and

(5) the identity of the government authority requesting the delay. In April of each year the Director of the Administrative Office of the United States Courts shall transmit to the Congress a full and complete report concerning the number of applications for extension of delay and the number of extensions granted during the preceding calendar year. Such report shall include a summary and analysis of the data required to be filed with the Administrative Office pursuant to this section. The Director of the Administrative Office of the United States Courts is authorized to issue binding regulations dealing with the content and form of the reports required to be filed by this section.

(f) When access to financial records is obtained pursuant to section 1112 (emergency access), the government authority shall, unless a court authorizes delay of notice pursuant to section 1109 (b) and (c), as soon as practicable after such records are obtained serve upon the customer, or mail by registered or certified mail to his last known address, a copy of the request to the financial institution together with the following notice: