May 29, 1997
The Honorable Richard Shumacher Assistant Clerk of Superior Court Buncombe County Courthouse Asheville, North Carolina 28801
Re:Advisory Opinion — Payment of Financial Institution Charges Financial Privacy Act,
N.C.G.S. § 53-9(b)
Dear Mr. Shumacher:
This will address your recent request for an advisory opinion regarding certain issues under North Carolina’s Financial Privacy Act (the "NCFPA"), Chapter 53B of the North Carolina General Statutes.
The Facts
You indicate that following a judgment in a civil action instituted in Buncombe County District Court, the judgment-creditor moved in a Supplemental Proceeding, pursuant to N.C.G.S. § 1-360, for an Order directing parties indebted to the judgment-debtor to appear and answer questions concerning property they hold for the benefit of the judgment-debtor. The parties in this case are banks which hold funds on deposit belonging to the judgment-debtor. You also indicate that the Clerk’s office has ordered the banks not to transfer any funds of the judgment-debtor.
You next indicate that, in response to the Order to Appear, at least one bank has requested reimbursement for its expense in producing records in accordance with the NCFPA and has cited
N.C.G.S. §§ 53B-4(11) and 53B-9(b) as authority for this request.
The Issue
The issue is whether or not the Clerk of Court must compensate a financial institution in accordance with the NCFPA.
Discussion of the Issue
In general, the NCPFA prohibits a "governmental authority" from having access to a customer’s financial records held by a financial institution (i.e., a bank, savings institution or credit union) unless the records are described with reasonable specificity and they are obtained through one of several procedures prescribed by statute. One such means is a ". . . court order or administrative or judicial subpoena authorized by law. . . ." N.C.G.S. § 53B-4(11). N.C.G.S. § 53-9(b) expressly requires the governmental authority accessing customer financial records to pay the financial institution a fee for the cost directly incurred in assembling and delivering records. This cost is determined by reference to § 1115(a) of the Federal Financial Privacy Act, 12 USC § 3415 (and regulations promulgated thereunder at 12 CFR § 219).
It is clear that the Office of the Clerk of Superior Court is a governmental authority. N.C.G.S. § 7A-101, et seq. If the Clerk were seeking the financial records of a bank customer, the Clerk would, we believe, have to pay the charges prescribed by statute. However, in this instance, it is a litigant, i.e., the judgment-creditor, who is in reality seeking customer information from a financial institution and not the Clerk’s office. The Court, through the Office of the Clerk of Superior Court, is the conduit by which the information is being sought. It is the judgment-creditor who is, or presumably will be, the beneficiary of the information. Under these circumstances, we conclude that the Clerk has no responsibility for the payment of bank charges obtained from a financial institution under the NCFPA. It is our opinion that these charges would be the obligation of the judgment-creditor who should make arrangements directly with the bank.
We trust that this provides you the guidance you seek in this matter. If we may be of further assistance, please let us know.
Very truly yours,
Ann Reed Senior Deputy Attorney General
L. McNeil Chestnut Assistant Attorney General