Third-Party Claims; Notification of Disclosure by Third Party to Depositor; Motion to Quash Disclosure

  1. Law
  2. Georgia Code
  3. Banking and Finance
  4. Financial Institutions
  5. Banks and Trust Companies
  6. Deposits, Safe-Deposit Agreements, and Money Received for Transmission
  7. Third-Party Claims; Notification of Disclosure by Third Party to Depositor; Motion to Quash Disclosure

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  1. No financial institution shall be required to recognize the claim of any third party to any deposit, or withhold payment of any deposit to the depositor or to his order, unless and until the financial institution is served with citation, order, or other appropriate process issuing out of a court of competent jurisdiction in connection with a suit instituted by such third party for the purpose of recovering or establishing an interest in such deposit. Neither shall any financial institution be required to disclose or produce to third parties, or permit third parties to examine any records pertaining to a deposit account, loan account, or other banking relationship except:
    1. Where the financial institution itself is a proper or necessary party to a proceeding in a court of competent jurisdiction;
    2. Where the records of accounts or other customer records are requested through subpoena or other administrative process issued by a state, federal, or local administrative agency having competent jurisdiction over the depositor or other customer or where such records are requested pursuant to Georgia or federal law governing civil practice or procedure in conjunction with an ongoing civil action in a Georgia state or federal court of competent jurisdiction;
    3. Where the records of accounts or other customer records are requested in conjunction with an ongoing criminal or tax investigation of the depositor or other customer by a state or federal grand jury, taxing authority, or law enforcement agency; or
    4. Where the records of accounts or other customer records are requested by any state or federal regulatory agency having jurisdiction over the financial institution.
  2. Unless directed otherwise by a court of competent jurisdiction, before disclosure, production, or examination of records produced under paragraph (1) or (2) of subsection (a) of this Code section, the agency or other party seeking the disclosure or production of the records shall provide notification to the depositor or other customer of such request. Notification of the depositor or other customer under circumstances set forth in paragraphs (3) and (4) of subsection (a) of this Code section shall not be made without the consent of the requesting authority. For purposes of ascertaining whether or not proper notice has been given or whether or not the depositor or other customer may be notified, the financial institution may rely upon appropriate certification or written assurances from the requesting party and in doing so shall be relieved of any liability which might be asserted in connection with such disclosures.
  3. Each customer or depositor to whom notice of an order, subpoena, or request for disclosure, examination, or production of records was lawfully given may, prior to the date specified therein for disclosure, examination, or production, file in the court issuing an order or subpoena for the records or in the Georgia or federal court where the civil matter is being heard or, in the absence of such a court, in the superior court of the county in which the financial institution is located a motion to quash the order, subpoena, or request or for a protective order and shall serve such motion on the party requesting disclosure and the financial institution as may be otherwise provided by law for similar motions.Failure to file and serve such motion to quash or for protection shall constitute consent for all purposes to disclosure, production, or examination made pursuant to this Code section.

(Code 1981, §7-1-360, enacted by Ga. L. 1989, p. 1211, § 6; Ga. L. 2005, p. 826, § 8/SB 82.)

RESEARCH REFERENCES

ALR.

- Bank's liability, under state law, for disclosing financial information concerning depositor or customer, 81 A.L.R.4th 377.

PART 7 BANKING DEPOSITORIES, RESERVES, AND REMISSIONS

7-1-370. Deposits by financial institutions.

  1. Subject to the restrictions of subsection (b) of this Code section and of Code Section 7-1-371 in regard to reserve funds, a financial institution may deposit its funds in any depository which is:
    1. Selected by, or in any manner authorized by, its directors;
    2. Authorized by law to receive deposits; and
    3. In the case of a depository located in the United States, one which has deposit insurance issued by a federal public body to depositories of the type involved.
  2. If a director of the financial institution has a relationship to a depository as either:
    1. An officer or director; or
    2. An owner of 5 percent or more of the shares of the depository,

      the depository shall be approved by a majority of the directors other than the director who has such relationship.

(Code 1933, § 41A-1701, enacted by Ga. L. 1974, p. 705, § 1; Ga. L. 1981, p. 1366, § 10; Ga. L. 1997, p. 485, § 14; Ga. L. 2016, p. 390, § 2-4/HB 811.)

OPINIONS OF THE ATTORNEY GENERAL

This section is broad enough to cover a savings and loan account as a deposit.

- Former Code 1933, § 41A-1309 (see now O.C.G.A. § 7-1-288) was directed at a bank's long-term investment in capital stocks and securities in the bank's own name, while former Code 1933, § 41A-1701 (see now O.C.G.A. § 7-1-370) was directed at a bank's short-term deposits in other financial institutions. The language of former Code 1933, § 41A-1701 was broad enough to cover a savings and loan account as a deposit, therefore, former Code 1933, § 41A-1309 was inapplicable to deposits in mutual savings and loan associations and former Code 1933, § 41A-1701 permitted banks to deposit the bank's funds in these associations. Since the Georgia Supreme Court has not ruled on the question of whether such a deposit was equivalent to the purchase of shares in a corporation, federal law will not permit a state bank member of the federal reserve to make deposits in a Georgia building and loan association; however, there was no reason why a state bank which is not a member of the federal reserve cannot deposit the bank's funds in a state association. 1978 Op. Att'y Gen. No. 78-66.

RESEARCH REFERENCES

Am. Jur. 2d.

- 10 Am. Jur. 2d, Banks and Financial Institutions, §§ 45, 53, 54.

11 Am. Jur. 2d, Banks and Financial Institutions, §§ 1086, 1087.


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