Financial and Tax Records
The area of personal financial information illustrates the classic tension between the individual's right to privacy and law enforcement's need for access to potentially vital evidence. On one hand, the individual's privacy interest in bank records is strong, given that a record of check and credit card transactions provides the best description of movements, purchases, consumption habits, reading and other leisure preferences, and associations. It is not surprising that personal financial information usually is the lifeblood of successful law enforcement investigations. The law enforcement interest in financial data has increased due to the boom in the illegal drug industry and the ability of drug barons to "launder" large sums of cash through banks, real estate, and other transactions. While the right to privacy has received important judicial and legislative concessions, the clear trend has been to favor law enforcers' authority to see personal financial data.
Should people assume that their bank records are confidential?
No. Despite a common presumption to the contrary, the records maintained by banks describing the financial affairs of a customer -- deposits, withdrawals, checks, interest payments, loans, overdrafts, and so on -- do not "belong" to the customer. In 1976, the US Supreme Court ruled these records are merely the records of commercial transactions, not confidential communications; and they are the bank's, not the customer's. For these reasons, a bank customer has no constitutionally "legitimate expectation of privacy" in his or her bank records and no legal "standing" to prevent the bank from revealing the records to others.1 Bank records are confidential only to the extent that federal and state statutes forbid certain government officials or private parties from obtaining access to them without a customer's consent.
The most central of these statutes is the Right to Financial Privacy Act of 1978 (RFPA), a direct response to the Supreme