California Bankers Assn. v. Shultz

SHULTZ, v. SEC- ASSN. BANKERS CALIFORNIA TREASURY, THE RETARY OF et al. January 16, April 1974* Argued 1974 Decided

No. 72-985. *Together 72-1073, Shultz, Secretary Treasury, with No. et al.; al. v. Bankers Assn. et 72-1196, and No. Stark et al. California Shultz, Treasury, al., appeal et also on from the same court. Court, which Rehnquist, J., in opinion- of the delivered ' Powell, Blackmun, JJ., White, J., Stewart, and Burger, and C. Blackmun, joined. Powell, J., concurring opinion, in which filed a in Douglas, dissenting opinion, J., joined, post, p. J., 78. filed a J., post, Brennan, joined, p. 79. Bren- I and II-A Parts . dissenting post, nan, J., p. 91, Marshall, post, p. 93, J., and filed opinions.

John Anderson for H. the cause the California argued Assn., appellant appellee in Bankers 72-985 No. M. No. 72-1073. on Frederick With the briefs was him. Pownall. C.

Charles Marson argued al., for cause Stark et appellants No. appellees 72-1196 and 72-1073. Ño. on With him Hor- Joseph were Neil Remcho, briefs ton', Anthony Amsterdam, G. Melvin Neu- Wulf, L. Burt borne, Hope Eastman. Solicitor

Deputy General Wallace argued the cause al., appellants Shultz et in No. 72-1073 and appellees Nos. 72-985 and 72-1196. him on the briefs With Solicitor Bork, were General Attorney Assistant General Grampton, Edward Korman, Henzke, R. Leonard J. Jr.

Me. Justice Rehnquist the opinion delivered Court. appeals present

These questions concerning the consti- tutionality of the so-called Bank Secrecy Act of 1970 and the (Act), implementing regulations promulgated thereunder the Secretary of Treasury. The Act, Pub. L. 91-508, 84 Stat. C. §§ 1730d, 1829b, 1081-1083, C. 1051-1062, §§ 31 Ü. S.

1951-1959, and in by Congress 1121-1122, was enacted 1101-1105, unavail- concerning hearings following extensive customers bank records of ability of and domestic criminal entailing in thought activities engaged be Secretary of liability. or Act, civil Under cer- Treasury prescribe regulation is authorized to for banks recordkeeping reporting requirements tain country. Because and other institutions financial it a bearing has on our treatment of of the issues some note that important raised think it parties, we only upon the Act's penalties civil and criminal attach Secretary; violation of promulgated by if the to do would nothing, were the Act itself impose no on anyone. penalties express purpose of main- the Act is to reports/ tenance records, making and the of certain degree tax, which “have a high criminal, of usefulness regulatory investigations proceedings.” 12 U. S. C. 1829b 1951; 31 (a)(2), Congress §§ §1051. C. apparently was concerned major with two problems in connection with the tax, enforcement of regulatory, and criminal laws of the United States.1

First, there was a need insure .to banks domestic and financial institutions continue adequate to maintain records of their financial transactions with cus- their tomers. Congress found that the growth recent finan- cial institutions the United States had been paralleled increase criminal activity an use of made generally Rep. See No. (1970); Rep. 91-1139 H. R. 91-975 No. (1970); Hearings Foreign on Secrecy (H..R. Bank Bank Records 15073) Banking before the House Currency, Committee on 91st Cong., 1st and 2d (1969-1970); Hearings Foreign Sess. on Bank Secrecy (S. 15073) 3678 and R.H. before the Subcommittee on Fi nancial Institutions of the Senate Banking Committee on and Cur rency, (1970). Cong., 91st 2d Sess. mány which the of the records While institutions. these . kept ultimately required to Secretary by regulation voluntary by the traditionally maintained had been institutions, Congress many fináncial domestic action of had years larger some banks in recent noted that photocopying checks, practice of or limited the abolished pre- and drawn on them similar instruments and drafts, records, of such payment. The absence for sented the, first them in failure to make through whether thought was them, to retain through failure instance ability Govern- seriously impair of the Federal myriad criminal, tax, regulatory and to enforce the ment At the had enacted. provisions Congress of laws that such recognized Congress it was time, same automatically avail- records would “not be made required only be purposes for law able enforcement [but could] Rep. legal process.” R. through existing H. obtained p. 5 91-975, p. (1970); Rep. 91-1139, No. No. see S. (1970).

In addition, Congress felt that there were situations deposit and of of large where the withdrawal amounts currency monetary or of which were the instruments currency actually reported of be equivalent should to the reports While of had been this nature Government. by previous by the required Treasury issued it was Department, precise felt that more and detailed requirements were needed. The was reporting reporting may authorized to what therefore as financial large described domestic transactions .currency equivalent. or its Congress was concerned

Second, about a serious and use of widespread foreign institutions, located financial jurisdictions secrecy with strict laws of as to bank purpose for activity, violating or evading-domestic tax, criminal, regulatory and enactments. The House described supra, 12-13, bill, 91-975, No. Report on the words: the situation these Com- testimony was received “Considerable the United Department, from the Justice mittee New District of for the Southern Attorney States Internal Reve- Treasury Department, York, Exchange Commis- Securities Service, nue for Department Agency the Defense sion, wide-, Development serious and about International facilities located financial spread foreign use violating purpose secrecy jurisdictions accounts law. bank Secret American permitted have foreign financial institutions secret have proliferation crime; ‘white collar’ served criminal underpinning organized financial operations in have States; United been .utilized taxes, income conceal assets Americans evade to purchase illegally gold; and have allowed Americans and others to the law govern- avoid and ing exchanges; securities and have served as essen- in frauds ingredients including tial schemes States; defraud the have United served as depository proceeds of black ultimate market from have Vietnam; questionable served as source of financing conglomerate corporate and other stock and acquisitions, mergers takeovers; have covered conspiracies from the U. for- steal S. defense and eign funds; aid. and have sérved as the cleansing for ‘hot’ agent illegally obtained monies. “The debilitating effects of the use of these secret on institutions Americans and American econ- omy vast. are It' has been estimated that hundreds in millions tax revenues been have lost. Unwar- ranted and unwanted credit is being pumped into corpo- cases of have been some our There markets. through employees who, directors,, ration officers themselves law, enriched and violation deceit of their com- endangered financial soundness their .stockholders. the detriment panies skimming, in engaged illegal gambling, Criminals financial opérating their and narcotics traffic are statutory approaches an impunity affairs with exemption. personnel law enforcement are confronted

“When the secret bank account or the secret foreign impossible they placed financial institution an are testimony position. In order to receive evidence secrecy jurisdiction they regarding activities the' subject consuming must themselves to a time foreign process. legal ofttimes fruitless Even when procedural juris- are overcome, foreign obstacles dictions rigidly' secrecy against enforce their laws employees. own domestic institutions and .their damaging “One of the most Ameri- of an effects can’s-use of secret financial facilities is its undermining the fairness of our tax laws. Secret foreign financial facilities, particularly Switzer- (cid:127) only land, wealthy. are open available To normally a secret requires Swiss account a substan- deposit, tial but such an account offers convenient taxes, evading means of days these when country citizens are crying out for tax reform and relief, it grossly is unfair to leave the foreign secret bank open account aas convenient avenue of tax evasion. The former U. S. Attorney for the Southern District of New York has character- ized the secret bank account as the largest ' single loophole permitted tax by American law.”' While of the most recordkeéping requirements imposed merely banks require the Secretary under the Act which, past them had

to most keep records much, of the retained, while voluntarily kept had been of domestic reporting transactions required in effect Treasury regulations earlier required impressive years,2 denying there no nearly 30 Secretary authority upon the sweep of the conferred con- Secrecy 1970. While Act by the Bank Act of an. such as authority over transactions ferring such broad surprise those or even shock might these well who. era, live see. latter did not lived in an to earlier . join chocolate, would the time when bank accounts economy. cheese, symbol as a the Swiss and watches Nor did they heavy of our live to see the utilization system by organized the minions of banking domestic legitimate businessmen. crime as well as millions to, Secrecy are challenges here the Bank Act made authority in Con- legislative directed want of gress subject,.but treat instead to the Act’s asserted prohibitions. of specific constitutional violation I - I of implementing regulations Title and Act, "by Treasury, promulgatedfherei mder of the of the require financial institutions maintain records t' copies identities customers, their microfilm of. make keep certain drawn on them, and records checks other II its'imple- certain Title of the Act and items.. menting regulations require reports of certain domestic foreign currency transactions. Recordkeeping

A. Requirements Title I — The . I Act Title general contains the record- requirements keeping for banks and other financial n. infra.. 2Seé

31 by by regula institutions, provided Secretary Act, 1829b, § tion. Section 101 of 12 S. C. U. applies federally It by only terms insured banks. its contains records findings adequate “that congressional, degree maintained insured banks have of use high criminal, tax, fulness regulatory investigations major :The proceedings.” of the requirements section are persons insured banks record the identities having of persons having them and signa accounts with authority Secretary ture thereover, in such form as the may require. Secretary To the extent deter mines regulation that süch records would have the requisite “high degree usefulness,” the banks must make and reproductions maintain or other microfilm check, each or draft, other instrument on it drawn presented to it for and must maintain a payment, record check, of each or draft, other instrument it received for deposit or together an identification- collection, party of the for whose account deposited it is to be collected. Secretary Section 101 further authorizes the banks to insured maintain record identity all individuals who engage transactions reportable by are II bank under Title Act, Secretary and authorizes the prescribe required period for retention such records. Section I730d, §C. amends Housing the National Act to Secretary authorize the to apply similar recordkeeping requirements institutions insured thereunder. Sec to. tions 122-123 Act, 1952-1953, S..'C. §§ Secretary authorize the 'to issue applying similar recordkeeping requirements to additional domestic financial, institutions.3 (b), Under (b), C. authority §123 § of the' 12-VU. engaging extends person the business of: "(1) Issuing redeeming checks; money orders, checks, travelers’ R. I, H. Title see initial draft of

Although an Secretary compelled the would have Cong., Sess., 1st 91st maintain banks to requiring promulgate regulations presented or for collection all received copies of items the finally passed required Act as- for the payment, copies and microfilm only of such records maintenance “high degree Secretary determined to have as the (cid:127) 4 Treasury the Upon passage Act, of the usefulness.” which consulted a task force Department established institutions, trade from financial representatives with agencies to determine governmental and associations, Whereas be maintained. type of records whicn.should promulgated regulations the original task force checks, of all required copying had. were regulations accordingly .amended, and the decided, require only as to checks in excess copying check of- copying regulations require $100.5 The also instruments, of its except or similar as incident to conduct an own nonfinancial business. internationally. Transferring domestically “(2) funds credits dealing “(3) currency exchange Operating a or otherwise or credits. currencies “ system. (4) Operating a credit card related, “(5) Performing similar, functions for or substitute such may foregoing-or banking specified be the Secre- of the as tary regulations.” Act, the Secre- 12 C. authorizes Section U.. S. § control,

tary .reports respect ownership, require to the ..to management financial of uninsured domestic institutions. 146, 162, 314, 316, 60-61; supra, Hearings, n. at 80. See House 91-1139, supra, (supplemental 321, 333; Rep. at lS—19 No. view§). Hearings summary study, amend force see For a task 3828) Secrecy (S. Act 3814 and S. the Subcommittee the Bank before Banking, of the Senate Committee on Hous- on Financial Institutions (1972). 2d Affairs, Cong., Sess., ing and 92d 60-64 The Urban Secretary initially regulations April 5, 1972, implement- issued on pt. (37 ing provisions of the Act. See 31 CFR Fed. only “on us” drawn checks: checks on the bank or payable issued and (b) § it. 31 CFR 103.34 (3). exempt regulations The from copying requirements “on certain us” checks such dividend, payroll, employee provided benefit they are checks, drawn on expected an to average account one hundred least per checks month.6 The also banks identity maintain records of the taxpayer iden person tification number each maintaining financial deposit opened interest each or share account after 30, 1972, June and to microfilm various other finan cial documents. 31 CFR 103.34.7 In addition, §

Reg. 6912). Treasury Department task found that law force greatly by limiting impaired enforcement would the check- requirement copying $100. checks in An to excess of Assistant Treasurj' that would estimated exclusion personal microfilming eliminate of all checks from the re- 90% quirement. Hearings 3814, 42, supra, Senate on S. at 57-58. shortly promulgation were thus amended after their copying $100 exclude the of checks drawn for or less. 31 CFR (b) (3), amended, Reg. (1972), 103.34 37 23114 38 Fed. § Fed. Reg. (1973), 17,1973. 2174 effective Jan. 6Exempted by (b) (3) dividend'checks, CFR 31 are 103.34 § payroll checks, checks, checks, employee claim benefit insurance governmental checks, agency medical benefit on ac checks drawn counts, by securities, checks drawn brokers dealers in checks or fiduciary accounts, drawn on on checks drawn other financial insti tutions, pension annuity checks, provided they or are drawn expected average per on an account least at one hundred checks month. (b) requires Title CFR retain either 103.34 each bank § original reproduction copy (1) or a or microfilm other or of docu granting signature authority (2) accounts; ments over statements ledger showing (3) or account; cards in each transactions each item $10,000 involving person, more than or remitted transferred to a account, place (4) States; or outside the United record a of each funds, monetary currency, instruments, or remittance transaction checks, securities, credit, $10,000'to investment or of more than a account, person, place (5) States; or outside the United each check institutions financial all

Secretary’s regulations , of each extension copy or other microfilm a to maintain except those $5,000 exceeding in an amount of credit microfilm property, by in real interest secured received or given or advice, instruction request, each money funds, currency, or other the transfer regarding $10,000 person, exceeding a in amounts or credit CFR place outside the United States.' account, or § 103.33. g., e. see,

Reiterating the intent of the Congress, stated H, 91-975, supra, Rep. 91-1139, 10;' at No. Rep.-No. R. supra, inspection, regulations provide Act to review, required or access to records process. governed existing legal be maintained is Finally, provide §§ CFR 103.51.8 Act § 125-127 $10,000 exceeding or in an drawn on or issued draft amount' foreign presented paid to a bank which the bank domestic has $10,000 (6) payment; nonbank more than drawee for each item of bank, exchange directly broker, in received from a or dealer (7) currency, States; receipt outside United a record of each monetary instruments, cheeks, securities, and each or investment exceeding $10,000 transfer funds or credit amounts received directly bank, broker, foreign exchange from dealer outside (cid:127) States; (8) the- United records needed to reconstruct a demand deposit deposited $100 account to tracé checks excess such account. requires Title 31 CFR 103.35 brokers and dealers in securities to § respect brokerage similar information

maintain to their accounts. prescribed regula- period retention for all records under the years, except required reconstructing tions is, five for the for records n deposit account, only a demand which must be retained for two years. 103.36(c). 31 CFR § 8 provides: Title 31 CFR 103.51 § provided (a) (1) “Except (a)(1), 4s 103.34 and 103.35 §§ .

except purpose assuring compliance for the of with the record- keeping reporting requirements part, part of this does not person "inspect .authorize the or other or review

35 of penalties for willful violations and criminal civil C. 1955- recordkeeping requirements. §§ 1957. Foreign

B. Title II — Financial Transaction. (cid:127)Reporting Requirements Chapter 3 of II of regula Title Act and the persons tions promulgated generally require thereunder report monetary transportation of instruments receipts into or out of or of such States, the United places from instruments the United States outside States, transportation receipt United if the involves of $5,000. Chapter instruments a value greater than II Title of the Act and implementing regulations generally require citizens, residents, United States reports businessmen to file- relationships of their foreign history financial institutions. The legislative foreign-transaction reporting provisions indicates Congress was concerned with the circumvention United regulatory, States and criminal tax, laws United States accomplishing citizens and residents were through the medium secret bank transactions. Rep. supra, No. 91-1139, 7; at H. Rep. R. No..91-975, supra, at 13.

Section 231 of the Act, 1101, requires § S. C. anyone with the report, connected transaction to in the prescribed by manner the Secretary, the transporta- tion into out' the country of monetary instru- exceeding $5,000 ments9 on any one As occasion. required the records to be by subpart maintained part. C of this inspection,- Other review or access to such governed records is (cid:127) applicable other law.” regulation This January became Reg. effective 37 Fed. 1973. , (1972); Reg. (1973). 38 Fed. . 9 “Monetary (1) instrument” is'.defined the Act §203 currency States, “coin and addition, United and in of. such 36-, report must the Secretary’s regulations,

prQvided by the instrument, amount as to the include information per- the instrument, and form of receipt, of the date the 103.23, §§ 31 CFR it réceived. See whom was son'from of per- exempt various Glasses 103.25.10 including banks, requirement, reporting from sons carriers, securities, and of other dealers brokers common currency transporting business the engaged others Monetary instru- (c). 103.23 § (cid:127)for banks. 31 CFR of a filing transported without the which are ments materially report, or erroneous with required report, (cid:127)Act, 31 232 of subject § are forfeiture under the . to file §1102; person failed C. who to has subject report filed is required report who has a false §§ 31 penalties 233, Under 207 and U. S. C. §§ 1056 civil penalties 209 §§ as well as criminal under and and §§ S. C. 1058 and 1059. 31 1121, authorizes Act, § 241 of the U. C. Section 31 Secretary prescribe residents regulations requiring and citizens of the United as well as nonresidents States, doing iri therein, the United States and business to main- reports respect records their trans- tain file fofeign checks, currencies, types. coin and and such of travelers’ negotiable securities, instruments, bearer bearer bearer investment sécurities, passing upon delivery, equiv- or'the and stock with title' may regulation thereof, specify alent for the as the regulation provision purposes of this title to which (l). relates.” U.'S. C. § provided by Treasury Department re for the The form porting (Report of these Form of International transactions Transportation Instruments). Currency Monetary Mo See 72-985, C, App. tion to Affirm on behalf of the United States No. ' pp. report identify person required- 29-30. The must file the identity report, persons acts, capacity, his he for whom specify the types monetary instruments, müst amounts and and,'if transportation, applicable, the method of name person' shipment from whom was received. relationships agencies. financial actions and authority, regulations the each Pursuant subject of the United person jurisdiction the States . to. yearly ány tax returns “financial report make a on of in, authority over, bank, or or other signature" interest country.” in a foreign or financial account securities other reporting require- 31 of §103.24. Violations the CFR implemented of 241 as the are § ment subject penalties 207, also to civil and criminal under §§ and- 210 of the 209, Act, 1058, §§ 31 C. and 1056, - 1059. C. Title II — Domestic Financial Transaction

Reporting Requirements In addition to the foreign transaction reporting re- quirements discussed Title II of provides the above, Act for certain of reports domestic transactions such where reports high have a degree of usefulness in criminal, tax, or regulatory investigations-or proceedings. Prior to the enactment of the Act, financial institutions had been reports providing of their customers’ large currency trans- pursuant actions to regulations promulgated by Sec- the retary Treasury11 required reports had of all currency transactions that, in judgment of the institu- tion, exceeded those “commensurate with customary n conduct of the industry profession business, person or organization concerned.”12 In passing the 11 issuing In regulations, these upon relied authority statutory provisions: (1) of two Trading with the Enemy 411, Act, 40 Stat. 2, 1933, amended 9, Act of Mar. § - 1, 301, Stat. Act, 1941,55 First War Powers § see Stat. (1940 12 U. S. ed., Supp. C. 95a V); (2) § Revised § Statutes, 31 U. S. C. 427. § previous regulations promulgated by Secretary, see 31 (1949), CFR Reg. 102.1 § Fed. originally mentioned involving $1,000 .transactions or more in $50 denominations of insti- financial use that the

Act, Congress recognized in furtherance foreign, both domestic tutions, mechanisms regulatory designed to evade activities H. R. increased. markedly States, had of"the United 91-1139,, Rep. No. 10; at Rep. supra, S. 91-975, No. importance recognized the supra, Congress at 2-3. currency transactions reports and unusual large strengthen activity and desired ferreting out criminal R.,Rep. H. reports. statutory requiring such basis Congress supra, particular, 11-12. 91-975, No. for deter- definite standards intended to authorize.more transaction type of unusual mining what constitutes supra, reported.. Rep. 91-1139, No. should at 6. 1081, there- Act, § 221 of the 31 U. S. C.

Section Secretary authority specify- the the delegates fore reported, currency which should be ing transactions the or transfer of they payment, “if involve the receipt, monetary instru- currency, or such other United States 222 of Secretary may specify.” ments as the Section Secretary 1082, provides 31 that the Act, § -the S. C. financial may reports such from domestic require the or parties or the transactions institution involved the both.13 31 U. S. C. Act, 1083, § Section 223 Secretary designate authorizes the financial institu- (cid:127) reports. tions to such receive 1952, more, any $10,000 In more or. or denominations. $100 $2,500 or former in denominations of amount was raised to regulations Reg. 1822, were more. 17 2306.' these See Fed. When form, Secretary simplify reporting noted revised in- 1959 to great Treasury reports value of the to law enforcement. See Aug. A-590, 3,, Release included in the Jurisdictional No. n App. E, pp. 72-1073, Statement United States No. for'the 127-130. proper interpretation, dispute of this section is a source of The. appeals. in these See n. infra. under implementing regulations promulgated In the only that required has authority, reports with the Com- financial institutions file certain regulations The missioner Internal Revenue. withdrawal, for each report deposit,

that a be made payment or or exchange currency,14 other. transfer currency of more than “which involves transaction exempt The $10,000.” regulations 31 CFR 103.22.15 § requirement from certain intrabank trans- reporting actions and “transactions with an established customer deposit. relationship com- maintaining [in amounts] customary mensurate with the conduct of the busi- industry, profession of the customer concerned.” ness, Secretary’s “Currency” in the defined the “coin as other, currency country, the United States or of customarily accepted money in circulate in and are used and as country certificates, in which issued. It includes U. S. silver notes, person conducting of the transaction; (2) the similar information as person organization to the or conducted; (3). for whom it was summary description transaction, of the type,- nature of the the amount, currency and denomination of descrip- the involved and a any tion check transaction; ‘(4) of involved in the type the of (5) presented; identity identification reporting and the of the finan- cial institution.' regulations provide The also that the names all customers whose currency $10,000 reported transactions excess are not on Form 4789 reported be to Secretary must the on demand. 31 CFR 103.22. §

40 regulations is made in the

Ibid.16 Provision also may by Secretary whereby information obtained tlie to and be available in some instances in confidence 31 departments the States. agencies other or United 31 There is also 103.43; § see C. 1061.17 § CFR whereby in the the Secre provision made may exceptions to or tary in his sole discretion make exemptions from requirements regula the grant file re- (a).18 § tion. 31 CFR 103.45 Failure to 16 Banks Home Loan Federal or Federal Transactions with Reserve originated Banks, solely by or or with or financial institutions banks, reporting requirements. 31 are excluded from -also these CFR 103.22. § Act, Section S. C. authorizes the Secre § regulation availability tary provide by to of information required departments reports by provided in the the Act to other authority, agencies of this the Federal Government. Pursuant to Secretary 103.43, provides: promulgated 31 CFR has § may any report any “The make forth information set part any department pursuant received to this available to other agency upon request of the United of the head of or States agency, stating department writing par- made in such or desired, criminal, regulatory tax investi- ticular information or gation proceeding is with which the information or connection sought Any and the need therefor. information Avail- official made departments agencies under to or able this section other confidence, States be them and shall not United shall received relating person except purposes be disclosed for official investigation proceeding which the infor- in connection with or sought.” mation amendment, regulation was an . sentence of added last (1973), (1972); Reg. Reg. 37 Fed. 38 Fed. effective see Jam 1973. (a) provides:

18Title.31 CFR §103.45 discretion, Secretary, may "The in his sole written order or exceptions grant exemptions' authorization make to or from requirements part. exceptions exemptions may of this Such or be unconditional,, may apply particular persons conditional or to may persons, particular apply classes transactions They shall, however, applicable only classes of transactions.

41 report subjects the report .filing of a false quired the C. 31 U. S. penalties. and civil banks to criminal 1056, 1058, 1059. §§

II 1972 the United June litigation began- This Cali- for the Northern District District Court States temporary- plaintiffs applied a fornia. Various including the restraining prohibiting defendants, order Treasury federal Secretary of and heads other the the Bank enforcing provisions from of -the agencies, Secrecy Act, Congress enacted on October regula- implemented by Treasury thereafter plaintiffs named tions. The below included- several Security Bank, bank individual National customers, American Association, California Bankers and the Civil on suing Liberties Union behalf of itself (ACLU), and its various bank customer members. plaintiffs’ principal

The in the District contention Court was that the Act and viola- were of the Fourth tive unrea- guarantee against Amendment’s sonable complaints alleged search and seizure. The also that the Act First, Tenth, violated the Ninth, Fifth, Fourteenth Amendments. The District Court issued temporary restraining order enjoining enforcement of the foreign and domestic II reporting provisions of Title Act, and requested the convening of three-judge pursuant court § 28 S. C. 2284 to entertain the myriad of challenges constitutional to the Act.

expressly stated authorization, they the order of shall Secretary.” revocable the sole discretion of the originally When promulgated, regulation additionally gave authority “impose recordkeeping additional reporting requirements by statute, modify, authorized or otherwise requirements Reg. of” Act. (1972). 37 Fed. present amendment to the January 17, form became effective 1973. Reg. (1972); Fed. Reg. (1973).’ 38 Fed. unanimously upheld District Court three-judge

The requirements recordkeeping constitutionality of the the 1 of the Act accompanying regulations, and the Title of. and II of the Act Title of requirements and the import and concerning the reports the and rela- monetary instruments currency and of export The Dis- institutions. financial tionships judge dissenting, with one however, concluded, trict Court 221-223 provisions §§ of reporting that the domestic were 1081-1083, §§ II of S. C. of Title Act, of the Constitu- Fourth Amendment repugnant to the held (1972). court Supp. tion. 347 F. per- Act reporting provisions oflthe since the domestic Treasury require detailed mitted the of the ¿11 transactions, reports virtually domestic financial personal drafts, and including involving those Checks conceivably since Act could be administered such a of a cus- compel manner- as to disclosure all details provisions affairs, reporting tomer’s financial domestic facially must fall as violative of the Fourth Amend- enjoined. ment. Their enforcement was. plaintiffs

. Both the Government defendants timely portions filed from notices appeal judgment District Court adverse to them. We noted probable jurisdiction separate appeals three from oyer pursuant the decision below to 28 U. §§ . S. C. 1252 and (1973): 1253. S. 816 ü. k No. apDellant 72-985. The appeal is the Cali- i» fornia an Association, of all .Bankers state association and national banks doing in California! The business Association challenges the constitutionality of the record- keeping provisions of Title I, implemented regu- lations, on two grounds. First, Association contends the Act violates the Due Process Clause of the Fifth Amendment because there is no rational rela- Act and the objectives between the tionship places an the Act because recordkeeping required, member banks. Association’s on the burden unreasonable recordkeeping that the contends Second, the Association I First Amendment Title violate the requirements banks’ member' anonymity of the privacy and right of customers. behalf of filed on appeal This was

No. 72-1196. suit the District plaintiffs original number on Security on behalf of Court: Bank, National deposi- Civil Liberties Union as a behalf of the American requirements, subject recordkeeping bank to the tor members, of bank customer representative and as a its appeal bank customers. The on behalf of certain and constitutionality of the challenges recordkeeping first the I of the Act and the requirements implementing Title appeal supra. 72-985, as does the No. regulations, appeal challenges constitutionality of Second, the the the reporting requirements financial transaction II implementing Title of the Act and the regulations. These recordkeeping foreign reporting requirements are on challenged grounds: first, the.require- three that ments constitute an unreasonable search and seizure in violation of Fourth Amendment; the that the second, requirements constitute a coerced creation and retention documents violation of the Fifth privi- Amendment lege- against compulsory self-incrimination; and third, requirements that the the First violate Amendment rights speech of free and free association.

No. 72-1073. In appeal, this Secretary the of the Treas- ury, appellant, challenges portion of the District Court’s order holding the domestic financial transaction reporting requirements II Title to violate the Fourth Amendment. The Government contends that the Dis- trict Court erred in holding provisions these If Title considering without face, on their

be unconstitutional Treasury. by statute implementation actual only urges that since The Government' regulations. may incur civil violate these those who regulations issued it is the actual penalties, criminal th,e broad author- Treasury, and not the of the are to be tested statute, which izing language Amendment; of the Fourth the standards against they are valid. that when so tested remain- throughout convenience, we will refer For plaintiffs as the District Court opinion to der of this appellees they appellants are both since plaintiffs, filed in Court. appeals in.

Ill standing of entertain doubt as We serious litigate plaintiff California Bankers Association complaint alleged claims which it asserts here. Its consisting of 158 state unincorporated it is an association in California. So far doing and national banks business the Association is not appears from the complaint, as. business, any way engaged banking in the and is not even Secretary’s challenges. it subject regulations-which to the found that the Association sued District Court While com- banks, on behalf of its member Association’s The Association plaint allegation. contains no such only to not claims on behalf of its member seeks litigate, banks, injury depositors but claims of to of also its ques- member Government Since the has banks.. standing of. the to litigate Association tioned peculiar importantly and more banks, claims since Security National Bank has plaintiff standing as an bank, affected and therefore determination of the Associ- way standing ation’s would in no avoid resolution we assume issues, constitutional without deciding that

45 Bolton, See Doe v. standing. does have Association Morton, Club v. (1973); Sierra 405 179, 189 410 U. S. Button, NAACP 415, U. S. (1972); (1963). initial contention proceed We then to consider requirements plaintiffs recordkeeping bank Secretary’s under the author- by imposed by impos- I deprive process banks of due ity Title upon them, by seeking to ing unreasonable burdens the banks the in surveil- agents make Government recordkeeping requirements of its citizens. Such lance scarcely novelty. Code, are a The Internal Revenue a example, general contains authorization to Secre- th$ tary Treasury prescribe by regulation records to kept by both taxpayers, be business and individual implemented by § S. C. been has the Sec- retary in regulations.19 various And has been this Court (cid:127)See, g., Reg. (records by kept e. Treas. 1.368-3 to be tax § payers participate exchanges who in tax-free with a connection corporate, reorganization); (records kept 1.374-3 a to be rail § corporation engaging exchange road in a tax-free connection (real railroad reorganization)'; 1.857-6 estate trusts investment § keep (shareholders must ownership); records stock 1.964-3 § keep must records their interest in a corporation); controlled (records 1.1101-4 kept by to be security § a stock holder who upon receives property stock securities or other a dis qualified tribution corporation); made bank holding 1.1247-5 § (foreign company keep investment must records sufficient verify may have); (all what taxable persons income it 1.6001-1 § liable to tax under A keep subtitle of the Internal Revenue shall Code gross records income, deductions, credits); sufficient establish 31.6001 seq. (requirements et employers keep § that various records of withholding under the Railroad Retirement Tax Act and the Unemployment Federal Act); (rec Tax 45.6001-2 to 45.6001-4 §§ ¡o kept ords cheese); manufacturers of butter and §46.6001-2 (records kept by to be sugar); (records manufacturers of 46.6001-4 § kept by persons to be paying premiums policies by foreign on issued insurers). Reg. provides Treas. penalties §301.7207-1 for criminal recordkeeping involving similar numerous cases faced with on the count- imposed requirements requirements. Similar Price Control subject Emergency to less businesses Shapiro upheld War were World during Act Second States, observing (1948), the Court United S.U. activity that there was “a relation between the sufficient public sought regulated to be and the concern so that constitutionally Government can or forbid regulate activity constitutionally require concerned, basic and can particular subject inspec- to keeping records, Id., Darby, tion . . . .” at 32. In United States v. subject 100 (1941), employers the Court held that to the Fair required Labor could be Standards Act keep paid records of wages and hours worked:

“Since, held, Congress may require pro- have we foyinterstate duction [wage commerce to conform to may it conditions, employer, hour] enforcing law, keep as a means of the valid record showing complied whether he has in fact Id., it.” at 125.

We see no.reason to reach a different result here. The plenary authority of Congress over both and- interstate foreign commerce is open dispute, body and that was not limited any particular one approach to effec- tuate its concern negotiable moving instruments the channels of that commerce were significantly aiding criminal enterprise. The Secretary of the Treasury, authorized Congress, concluded that copying and retention of certain negotiable instruments the bank upon which they were drawn would facilitate detec-' tion apprehension of participants in such criminal delivery for willful or' disclosure to the Internal Revenue Service of a person document known disclosing it to be false as to material matter. the channels of enterprises. could have closed Congress had entirely negotiable instruments, it commerce to warranted; were it thought that so drastic a solution proceeds of any could made transmission have activity by instruments negotiable criminal interstate separate commerce criminal offense. Had latter, authority chosen do the precise it to under the Darby Shapiro, supra, required it could have that each in the engaging sending negotiable individual instru- through ments the channels commerce maintain record of action: plaintiffs such concede as ban^; much.20 plaintiffs

The bank contend, however, the Act primary purpose regulation does have its of the banks arid requirement therefore the themselves, keep the banks the records anis unreasonable burden on Shapiro Darby, the banks. legisla- involved which imposing recordkeeping requirements tion aid sub- stantive are therefore regulation, said not to control. provisions requiring But reporting or recordkeeping by institution, paying rather than the individual who payment, receives are by no unique. means Internal Revenue Code and its for regulations, example, provisions contain to report businesses in- payments parties (26 come to third U. C.S. § (a)), employers keep to records of payments certain made to (Treas. employees Reg. seq.)f § 31.6001 et corporations report to dividend payments parties (26 third made 6042), § U. S. C. cooperatives report patronage divi- payments (26 dend U. S. 6044), report §C. brokers to customers’ gains and (26 losses C. § 6045), and banks report payments of interest depositors made to U; | (26 S, C. 6049).

20 n Appellant Brief for California Bankers 72-985, Association in No. made employer was Darby

In an identifiable class of Shapiro subject Act, the Fair Labor Standards placed had been under an identifiable class of business instances, Con- the Price Act; Control each those was ade- gress purpose regulation found that of its by the quately kept secured requiring records to be ' subject persons to the substantive commands legislation. case, In determined however, Congress this that recordkeeping purposes, alone would suffice its legislation that no correlative substantive was re- quired. Neither fact, principal' nor the fact that the congressional concern is with the of the banks' activities customers, rather than with the banks activities themselves, serves to invalidate legislation on due process grounds.

The plaintiffs bank proceed from premise they are complete bystanders with respect to transactions involving drawers and negotiable drawees their in- struments. But such hardly A the case. voluminous body of law has grown up defining the rights of the drawer, the payee, and the drawee bank respect with various kinds of negotiable instruments. recogni- tion of such rights, both in the various States this. country and in other countries, is itself a part of the why reason the banking business has flourished and played prominent so a part in commercial transactions. The bank is a party to any negotiable instrument drawn upon byit a depositor, upon and acceptance payment of an instrument incurs obligations to payee. While it obviously is not privy to the background of a. transac- tion in which a negotiable instrument is used, the existing wide acceptance and availability of negotiable instru- ments is of inestimable benefit to the banking industry as well as to commerce in general.

Banks are therefore not consgripted neutrals in trans- parties instruments, but involving negotiable actions con-, in their stake a substantial with the instruments illog- Congress acceptance. availability tinued negotiable if records of transactions decided that ically maintained, in order kept and to be were instruments legal customary process evidence under to be available easily most warranted, the bank was the if the occasion and therefore should the instrument party to identifiable is con- believe this conclusion recordkeeping. We do there is a Darby Shapiro, and that sistent sought Congress the evil between sufficient connection it recordkeeping procedure required and the to address Due Process Clause of the under pass muster Fifth Amendment.21 ample testimony requirement Congress it befare had reproduce records would checks and maintain other

that banks tax, regulatory, and significantly in the enforcement of federal aid 1, 322, 359; Hearings, supra, 151, n. at criminal laws. See House 61-68, 230, 250-255, Hearings, supra, n. 282. Senate portion drawn in the a substantial of the checks on banks While may any utility enforcement, law tax never be of United States regulations check-copying regulatory purposes, the do limit the (b)(3) $100. requirement to checks 31 CFR 103.34 excess §§ (4). exception regulations $100 added since This was to the litigation instituted, 5,' supra; reviewing n. this was see case, judgment Court in look to the statute District we they stand, they did. Hall v. and the as now not as once (1969) (per Thorpe Housing Beals, 45, curiam.); 396 U. 48 v. Authority, 268, (1969). 281 n. 381 excep- $100

The California Bankers Association contends that the meaningless since microfilm tion is cameras cannot discriminate was, however, testimony between checks in different amounts. There that, during Hearings step the House an additional could be added check-handling procedures the to sort out those checks not required copied, many equipment and to be that banks have that Hearings, supra, can sort checks on a dollar-amount basis. House any that, event, In n. 359. it is clear the Act regulations require checks, do not banks microfilm all which some halfheartedly argue, on plaintiffs The bank somewhat will be incurred they estimate of the costs which basis with 'the Secre- by banking industry complying in burden recordkeeping requirements, that this cost tary’s They no cite deprives process alone them of due law. ex- proposition, for this it does not warrant cases complaint In its filed the District tended treatment. Court, plaintiff it Security National Bank asserted that bank; was an “insured” national to the extent that Con- gress part has on of banks acted to records Corporation, insured by Deposit Federal Insurance or of financial insured the National institutions under Act, Housing Congress simply imposing is a condition on spending public g., funds. e. Steward See, Davis, Machine Co. v. Helvering 301 U. (1937); S. 548 Davis, (1937). U. S. 619 Since there was no allegation in the complaints filed Court, in the District and since it is not here plaintiff contended that bank not covered FDIC Housing Act it is insurance, unnecessary to questions consider what arise had would Congress relied solely upon power its over interstate impose commerce to the recordkeeping requirements. The cost imposed burdens on the banks the record- keeping requirements are far from unreasonable, and we hold that such burdens do deny the banks due process of law.22 traditionally done,

banks have but instead leave the decision to the banks. Given the fact placed cost burden on the banks implementing recordkeeping requirements of the statute the. 22, infra, one, is also a reasonable see n. we do not think recordkeeping requirements are unreasonable. only figures in the placed record to the cost burden on the recordkeeping requirements banks show that America, Bank of largest one of States, banks the United branches, $29 deposits, billion in and a net income $178- excess of (Moody’s million Bank and 633- Finance Manual

51 (cid:127) the record- that contend plaintiffs The bank also Secretary pursu imposed by keeping requirements effectively right depositor’s to the Act undercut a ant by the third-party summons issued a Intérnal. challenge Caplin, 375 U. S. v. Revenue Service. See Reisman States, 517 400 U. S. (1964); 440 Donaldson v. United States, (1973). Couch v. 409 U. 322 (1971); United S. might depositor, on a wrong such a result work Whatever a injury it works no on is that in his bank. It true permitted party limited class of cases this Court has injury operation who suffered of a law as a result rights to assert his the law though even the sanction of by another, was borne Society Sisters, Pierce v. (1925),

U. S. 510 conversely, the Court has allowed party upon rely.on whom the sanction falls to wrong done to a party obtaining relief, third Barrows Jackson, Baird, v. (1953); U. S. 249 Eisenstadt v. 405 U. (1972). S. 438 might the bank Whether other rely circumstances on injury an depositors, to its whether, instead, this case governed general rule is that one standing has only rights, to vindicate his own g., e. Lodge Irvis, Moose 407 U. 163, (1972), need not now be decided, since, any event, the claim premature. Claims of depositors against compul- (1972)), expended $392,000 including start- up costs, comply microfilming with the requirements of Title I of the Act. Affidavit of Ehler, William App. 24-25. hearings before the Banking House Committee on and Cur- rency indicated making the cost of copies microfilm of checks ranged per- from mills check for small banks down to about 1% %. large mill or less for supra, Hearings, banks. See House n. 341, 354-356; Rep. supra, 91-975, H. No. at 11. Report The'House further indicates legislation expected was significantly increase the costs of the banks involved since it was found that many already banks practice followed the maintaining the records contemplated by legislation. the involving records process of bank

sion lawful process until such must wait depositors’ own transactions issues. 72- below, No. appellants plaintiffs

Certain the Union, Civil Liberties including the American plaintiff various individual Security Bank,- and National the purpose of if “the dominant argue that depositors; preservation, and col- Secrecy creation, the Bank Act is the : . . of evidence of crime is against lection [i]t applicable law, its then, standards the criminal that constitutionality They must be measured.” contend provi- recordkeeping requirements the the violate of Fifth, sions the the Fourth, and First Amendments to only point, Constitution. At such con- we deal challenges they recordkeeping stitutional relate the as provisions I of of Title the Act. see nothing

We in the the Act violates Fourth rights any Amendment of plaintiffs. of these Neither provisions I of implementing Title nor thé regula- tions information rec- contained ords be disclosed to Government; legislative both the history and specific make reference to the fact that access to the records is be controlled existing legal process. urge

Plaintiffs that when bank keeps makes records under the compulsion of Secretary’s regula- tions it acts anas agent of the Government, thereby engages in a “seizure” of the records its customers. But all the records which the Secretary requires kept pertain to to which the transactions bank was itself - party. a See United States Biswell, 406 U. S. 311, 316 (1972). The fact that a large number of banks volun- tarily kept records of this they before sort were required to do so regulation is an indication that the records were thought useful to the bank in the conduct of its of its reflecting well as in transactions own business, an Internal long ago that Reve customers. We decided not a third-party a bank was nue summons directed to of either the rights Fourth-Amendment violation investigation by taxing person or the bank under States, First National Bank v. United See authorities. 1924); (SD Ala. (1925), aff’g F. States, diffi supra, Donaldson v. United at 522. “[I]t shmmoning cult to see how third party, party, rights the records á can violate third the-taxpayer, prosecution even if criminal is-contem Id., plated in progress." 537 (Douglas, J., concurring)^ nevertheless contend that the broad author

Plaintiffs ization given by Secretary the require Act to the to the coupled maintenance records, authority of the broad to require reports certain of transactions, financial power the amounts to commit an of unlawful search the banks and the customers. This argument is based on the 103.45, that 31 CFR as § fact it existed when the District Court ruled permitted Secretary in the the case, to impose additional or recordkeeping reporting, require order written or authority authorization; ments has been now deleted regulation;23 from plaintiffs the e thus argue Secretary that the could order the immediat any of reporting kept made compul records or the under of sion the Act. We, of must the course, examine statute regulations they Beals, the as Hall now exist.. v. 45, 48 (1969) (per curiam) Thorpe S. Housing v. Authority, 393 268, (1969). n. 38 Even if plaintiffs were correct in Urging that we the decide case on the basis the regulation it existed the time the District Court their ruled, contention would be without merit. Secretary might Whatever the have authorized supra. See 18. ti. the require, not in fact did' he

under the regulation/ com- under the any kept or records made reporting history legislative since the Indeed, the Act. pulsion author- which it that records clearly Act indicates of the only be available Secretary require were to ized the Secretary doubtful legal process, it is normal by plaintiffs him authority would have ascribed But in regulation. form of the even the earlier under he did had any authority, he event, whether records were none of the it, not exercise fact the mere reported. we hold that required to Since com- by the banks under of'.the records maintenance Fourth pulsion of the invaded no Amendment on record- any plaintiffs' attack right depositor, that Amendment fails.24 keeping requirements under required making That bank the records is Secretary compulsion regulation acts under the clear, doing it neither equally but if clear so depositor in which has a nor seizes records searches Fourth right. Amendment Act, authorizes Chapter 4 31 U. C.' § § Secretary by regulation records the maintenance of by persons engage who a relation transaction or maintain directly others, ship, indirectly, on with a behalf themselves or agency. by regulation, required has, financial by persons having

the maintenance of such financial such records by engage interests and domestic financial institutions monetary 103.32, transactions outside the 31 United States. CFR §§ provides production .103.33. Act also that records shall such only compelled subpena duly be “a or summons authorized may required by issued' or as otherwise S. C. be law.” 31 U. (b). Though apparent 1121 it is not briefs filed from various § particular iii plaintiffs Court below whether this record- keeping requirement challenged, holding require our that a mere kept right any ment that records be does constitutional not violate depositors disposes necessarily of the banks or of the such a claim, point since there is no indication at this has that there been production attempt compel of such records.

55 way have their in such Plaintiffs briefed contentions entirely we cannot that certain whether their Fifth only pro- directed reporting Amendment attack is to the regulations, recordkeeping pro- visions of the or to the as well. To extent it is directed to visions that it requiring keep records, banks to is with- banks, Incorporated out merit. like other organizations, compulsory have no privilege against self-incrimination, g., Hale Henkel, e. Wilson v. 43, (1906); 201 U. S. 74-75 States, United United v. 221 U. S. 361, 382-384 (1911); White, States v. (1944). U. 694, 699 Since party produced by incriminated evidence a third party sustains no violation of his own Fifth Amendment States, Johnson v. United rights, 228 U. S. Couch States, v. United

(1913); S., depositor plaintiffs present here no Fifth meritorious recordkeeping requirements. Amendment to the challenge Plaintiff challenge ACLU makes an additional to the recordkeeping requirements of I. It argues Title that provisions, those and the implementing regulations, its members’ First violate rights, Amendment since obtain, provisions possibly could be used to the identities of its members and contributors through examination the organization’s bank records. This Court has recognized organization may that an have standing to rights assert constitutional pro- its members be from governmentally tected compelled disclosure of their membership in the organization, and that absent a countervailing governmental interest, such infdrmation Alabama, NAACP v. may compelled. not be 357 U. S. Pollard Roberts, (1958). See 283 F. Supp. 248 curiam, per (ED Ark.), aff’d 14 (1968). per however,

Those do se rule cases, not elicit a forbid would disclosure in a situation where the such. governmental interest would override associational

56 confidentiality. Each of such maintaining

interest summons had or subpoena a after litigated them was organization, for the records already been served prevent the by brought organization and an action No such disclosure records.25 actual disclosure here, Government sought has been Court, This premature. is therefore challenge ACLIJ’s com a concrete fact situation in the absence can interests governmental peting associational position not in a to determine whether simply is weighed, or an records would compel effort to disclosure of such Alabama, NAACP v. would not be barred cases such as supra26 any rights The threat First Amendment or members from the mere existence the ACLU its more of the bank is deal good records the hands 25 recognizes cases, cases The ACLU that and the other these subpoena it cites summons had involved in which or situations 72-1196, already Appellant issued. Brief in No. ACLU p. General, (1965); 301 57. See Lamont Postmaster 381 U. S. Legislative Comm., Investigation S. 539 Gibson v. Florida 372 U. (1963); NAACP, 366 S. 293 Louisiana ex rel. Gremillion v. (1961); (1960); Tucker, Bates v. Little Shelton v. 364 U. 479 Rock, Alabama, (1960); 361 U. S. 516 NAACP v. Rumely, (1953). (1958); United States v. U. S. 41 injunctive essential, present relief The ACLU that contends notify might since it the banks of the fact their records subpoenaed, might subpoena comply have been with giving judicial out the ACLU a chance to review. While obtain noting formally prohibit” (citing that “most banks American it Banker, May 1972, p. 1, 3-4), cols. the ACLU also contends “day-to-day practice permitting to bank 'informal’ access is, unfortunately, widespread.” Appellant records Brief for ACLU p. 72-1196, in No. 58. showing attempt no record contains the Govern- ment, informal, compel production formal of bank records containing relating ACLU; accordingly information to'the ex- we press opinion required no whether notice would in such an instance be by either Act Constitution. Army’s assertedly posed the threat the

remote than of information compilation distribution system of and Tatum, adjudicate in Laird declined to which we (1972)., 1S. IV chal- now to address the constitutional proceed We the requirements of lenges reporting directed the II regulations II the Act. Title authorized in Title of gen- authorizes the to of two Secretary require reporting do- banking foreign eral of categories transactions: upheld constitutionality mestic. The District the Co.urt foreign reg- of the reporting requirements transaction of ulations under II; plaintiffs issued Title certain below, appellants in 72-1196, appealed No. have from that portion the of District Court’s and here renew judgment, their contentions of infirmity in for- constitutional the eign reporting regulations upon based the First, Fourth, and Fifth Amendments. The Court District invalidated the Act insofar as it Secretary authorized promul- the gate regulations requiring report banks to domestic transactions involving customers, their and the Govern- ment No. appeals 72-1073 portion from the of - District Court’s judgment. above, noted the Secretary

As issued under, authority of II Title contain two essential requirements reporting with respect foreign financial tú Chapter transactions. of3 Title II of 31Act, U. S. C. 1101-1105, §§ and the corresponding regulation, 31 CFR 103.23, § individuals report transportation monetary instruments into or out of the States, United receipts such instruments in the United States places from outside the United if States, the instrument transported or received has a value in $5,000. excess of Chapter II 4 Title 31Act, U. S. C. §§ 1121-1122, and the corresponding regulation, 31 § CFR gen- 103.24, busi- residents, citizens, require United States

erally foreign relationships with their reports file nessmen financial institutions. imple- Act as provisions of reporting

The domestic in contrast regulations, mented finan- only apply to banks requirements, reporting pro- Congress statute, enacting In institutions'. cial § 31 U. S. C. § vided currency might specify types transactions reported: should be im financial involving domestic

“Transactions at such reported Secretary stitutión shall be the the detail as such'manner, such time,'in they payment, if Secretary may require involve the or currency, receipt, or of United transfer States monetary such other instruments as the or may denominations, in such specify, amounts, Secretary' both, or under such the circumstances, as shall regulation prescribe.” Section 222 of Act, § 31 U. S. C. authorizes 1082, Secretary to fi- reports such domestic from the nancial involved, institution from parties to the transactions, authority or from In both. his exercising under these sections, the Secretary promulgated, has require only which insti- financial, tutions make report Service; Internal Revenue he required any report has not from par- the individual n ties to domestic financial applicable transactions.27 The 31 regulation, 103.22, requires § CFR financial insti- tution to “file report of each deposit, withdrawal, exchange of currency or other payment transfer, by, through, or to such financial institution, involves currency transaction in of more $10,000.” than The regulation exempts several types of currency transactions n’ See infra. including transactions reporting requirement, from this deposit maintaining a established customer “with an in amounts which'the. relationship bank, with bank conclude do not exceed com- reasonably amounts may conduct of the customary business, mensurate industry profession the customer concerned.” Ibid. Foreign Challenge A. Fourth Amendment to the Reporting Requirements differentiating Court, The District for constitutional. foreign reporting purposes requirements between and. reporting requirements imposed by the domestic the Sec . retary; opinion upon relied our in United States v Court, U. S. District (1972), U. S. 297 for the proposition that Government surveillance in the area subject relations is in some instances to less .constitutional restraint than be similar activity would in domestic affairs. analysis Our does not take iis over ground. plenary Congress authority regulate foreign commeice, delegate significant portions and to of this power to the C. Executive, well established. & S. Air Lines v. Waterman Corp., 333 U. (1948); Norwegian Nitrogen States, Products Co. v. United (1933). 294 U. S. Plaintiffs contend that exercising authority that reporting previously of de- foreign scribed financial transactions, Congress and the abridged have their Fourth' rights. Amendment . The familiar language, of the pro- Fourth Amendment 'tects right people the “[t]he in their secure .be persons, houses, papers, and effects, against unreasonable searches and . seizures . . .” Since a státute requiring filing the subsequent publication of corporate a tax return has been upheld against, a Fourth Amendment challenge, Flint Co., v. Stone Tracy 220 U. S. 174- 176 (1911), reporting requirements are by. no means Indeed, Fourth

per se violations of the Amendment. of the face in the holding fly well contrary might individual history of self-assessment sixty-year settled This United States. corporate the income taxes im- the recognized has occasions Court on numerous system, aspects of that portance self-regulatory of the it: enforcing Congress in of the and interests relies Government assessing “In income taxes the of the taxpayer the upon the disclosure primarily him to it requires This disclosure relevant facts. full and To ensure make in his annual return. attempts discourage fraudulent disclosure, to honest imposes Such Congress to evade the sanctions. tax, may confessedly be either criminal sanctions Mitchell, Helvering civil.” v.

(1938). (cid:127) - To reporting requirements the extent that practices the Act and the settled of- collection the- tax n process similar, history are must be overcome who argue reporting requirements those are that a violation con- Fourth Amendment. Plaintiffs States, Boyd v. United tend, that however, 616 (1886), foreign re- invalidity establishes the porting requirement under the Amendment, Fourth the particular requirements imposed so indis- are criminate in their nature must deemed to equivalent be the general warrant of. kind condemned as obnoxious to. Fourth Amend- ment such cases Texas, U. S. 476 Stanford (1965). We do not think support these cases would plaintiffs if even their contentions were directed at. domestic reporting requirements; light fact that reporting requirements deal with matters in foreign commerce, plaintiffs’ we think reliance on to challenge cases requirements those must fail. States, has been supra, v. is a case which Boyd United explana repeated citation, discussion, subject In years ago. the time of its decision 88 tion since SACB, Party 1 (1961), Communist 367 U. S. the Court Boyd holding described the as follows: Boyd “The providing case involved statute other than criminal proceedings arising under laws, revenue the Government could an order secure requiring production by opposing the court an any claimant defendant of his documents under control asserted, might the Government which, tend If prove allegations. Government’s production made, were not allegations were be taken as confessed. On the Government’s motion, District Court such an had entered order, requiring pro- the claimants a forfeiture produce specified ceeding to invoice. Although objected improper claimants that the order was and the statute unconstitutional in coercing self- incriminatory disclosures and permitting unreason- they able searches and seizures, did, protest, under produce invoice, was, again over their objection, constitutional admitted into evidence. This Court that on held such a judgment record a for the United States could stand, and that the statute invalid as repugnant was to the Fourth and Id., Fifth Amendments.” at 110. Boyd

But recognized Court that the Fourth Amend- prohibit ment does not all requirements that information be made available to the Government: supervision authorized to

“[T]he be exercised officers of the revenue over the manufacture or cus- tody of excisable articles, and the entries thereof in' books required law to kept for their inspec- tion, necessarily are excepted out of category S., and seizures."’ 116 U. searches

unreasonable 623-624. by Texas, supra, a warrant issued v. involved Stanford and petitioner’s a home judge which described state records, “books, the and seizure authorized search cards, memoranda, pictures, receipts, lists, pamphlets, concerning the and other written instruments recordings Party the Communist of Texas.” This Court found and be an general warrant, warrant to unconstitutional ¡pursuant, and conducted invalidated the search seizure Secretary’s Stanford, in the Unlike it. the situation regulations rummaging do not authorize indiscriminate plaintiffs, reports of the nor do among the records the literary in they Stanford; deal as material sought commerce, is about not litera- information reports foreign ture. The financial transactions as required regulations must contain information relatively in group limited financial transactions reasonably and are commerce, related to . statutory purpose assisting in Enforcement laws United States. primary addition, in importance,

Of fact that require required foreign reporting the information pertains only ments to commercial transactions place across Mr. national boundaries. Chief Justice take Taft, .opinion-for Carroll United his Court States, 267 U. (1925), S. 132 observed: may stopped

“Travellers be inter- crossing so an boundary protection because of national self national reasonably country to requiring entering the one. ,his identify himself as entitled to come in, belongings effects which may lawfully brought as be Id., in.” at 154. . proposition

This settled has been recently reaffirmed as States, v. United as last Term Almeida-Sanchez If (1973). may of income be reporting required an aid to enforcement of federal revenue as country if statutes, leaving and' those entering may effects, their all belongings examined violating Amendment, without the Fourth we see no Secretary’s regulations reason to invalidate the here. statutory authorization for the was based upon cur- Congress conclusion international rency were foreign financial institutions transactions by being of United to circum- used residents States vent the enforcement of the laws of United States. sufficiently The single are tailored so as to out transactions found to greatest potential have the for such circumvention which involve substantial money. They amounts of are in therefore reasonable light statutory of purpose, and consistent with the Fourth Amendment. Challenge

B. Fourth Amendment to the Domestic Reporting Requirements The District Court examined the domestic reporting requirements imposed plaintiffs by on looking to the broad authorization of the specific Act itself, without reference to the regulations promulgated under its (cid:127) authority. The District Court observed:

“[Although to Secretary date the required has reporting only the financial institutions and then only currency of transactions over he $10,000, is empowered by the Act, as above, indicated to require, if decides, only he so reporting not the financial institution, but also parties partici- other to or pants iñ transactions with the and, fur- institutions ther, Secretary may require not reports, only currency of transactions of any but transaction n any monetary

involving instrument —and F. 1246. large Supp., or small.” amount — question as the pose, on to Court went The District broadly provisions, resolved, whether “these be agency government authorizing an executive ... parties institutions and [thereto] financial every . conceiv- routinely report . . the detail almost . . such an invasion able transaction . financial [are] as amounts to an unreasonable right privacy a.citizen’s Fourth Amendment.” meaning of the search within Ibid. opinion, the we in this

Since, as have observed earlier Secretary self-executing, statute is were authority would take no under his there . action whatever being possibility of criminal civil sanctions no irtiposed anyone, wrong on the District Court was question framing question manner. might requirements been reporting not what sort have imposed by authority under given the broad Act, reporting him in but rather what sort of require- did impose authority. ments he under that fact provisions where compre “Even some of. ripe for legislative adjudica hensive enactment are portions tion, immediately of the enactment not thereby open judicial involved are not for a thrown constitutionality. determination of upon ‘Passing possible provisions significance manifold apply a broad in advance of efforts to statute provisions separate is to analogous rendering an opinion, advisory'1 upon declaratory a "or a statute upon hypothetical judgment case.’ Watson v. Buck, 313 U. Communist 387, Party S. v. 402.” SACB, 71. S., 367 U. at The question decision, therefore, . is whether regulations relating to the reporting of domestic trans- subject required could actions, violations of which those or criminal invade Fourth report to civil penalties, right required report. of those To that Amendment question now we turn. by Secretary require the

The issued only reporting of domestic financial transactions Co., financial institutions. United States Morton Salt (1950), organizations engaged 338 U. S. 632 held that required by file commerce could be the Government to reports phases with dealing particular of their activities. used language Court that case is instructive: unnecessary question is here

“It to examine the corporation pro of whether a is entitled tection of the Fourth Amendment. Cf. Oklahoma Press Publishing Walling, Co. v. 327 U. 186. S. Although to be com ‘right let alone—the most prehensive of rights and the valued- right most civilized J., in Olmstead Brandéis, dissenting men/ v. United States, 277 U. S. 438, 478, literally confined to searches seizures such, but extends as well to com orderly under taking pulsion process, Boyd States, v. United S. Henkel, 616, Hale v. 201 U. 70, neither incor S. porated unincorporated nor associations plead can unqualified an right to conduct their affairs in secret. Hale supra; v. Henkel, United White, States v. 694. they may

“While and should have protection from unlawful demands made in public name inves- Federal tigation, Trade Comm’n v. American cf. Co., Tobacco 264 U. 298, corporations can claim equality no with enjoyment in the individuals a right privacy. White, United States v. Cf. supra. They are endowed public attributes. They have impact upon collective society, from as acting artificial they privilege of derive

which thém allows Federal Government entities. commerce. in interstate privilege engaging of carry, them with from often government Favors of regulation. [Citations enhanced measure an request regard were to one Even if omitted.] as caused .noth- information in' this case for law- nevertheless curiosity, more than official ing satisfy right enforcing agencies legitimate have is corporate consistent themselves that behavior S., public law interest.” 338 U. with the and the ' at 651-652. difficulty determining have no then in .We Secretary’s requirements reporting for the of domestic abridge Amendment financial no Fourth transactions right mere of the banks The bank is not a themselves. bystander respect stranger or the transactions required record The bank is report. it is party to portions itself a each these earns transactions, conducting transactions, its income from and in such may the past kept have' transactions records similar voluntary on a own purposes. its See United basis Biswell, States v. S., 406 U. at 316. The presently in effect governing reporting domestic currency per- transactions information as to the identity sonal and person conducting business ' the transaction person organization for whom it conducted, summary was well as description of the nature of the transaction. It conceivable, and perhaps likely, that bank might of its own compile volition amount detail for its own purposes, and therefore to that extent the regula- put tions the bank in position of seeking information from the. customer in order eventually to. report it to the Government. But as we have noted above, “neither plead can unincorporated associations incorporated nor in affairs secret.” conduct their right an unqualified Co., supra, Salt at 652. United v. Morton States ' reporting impose unreasonable do not regulations The the require requirements regulations on banks. the abnormally respect reporting information with large currency, in informa transactions much already bank party tion the as a to the transaction the possesses or would in its interest. To acquire own the extent that connection with such bank transactions the to obtain information simply from a customer because the wants Government sufficiently it, the information and limited is described sufficiently congressional related to a tenable nature, improper determination as to use of of that transactions type in interstate commerce, so as withstand challenge by plain Fourth Amendment made the bank inquiry authority tiffs. is within the of the “[T]he agency, demand too is not the informa indefinite reasonably tion is sought relevant. ‘The gist of protection is in requirement, expressed terms, that ” sought disclosure not be shall unreasonable/ United Co., supra, States Morton Salt 652-653; Okla see homa Press Publishing Walling, Co. v. (1946).

In addition to the Fourth Amendment challenge to the domestic reporting requirements by made the bank plaintiffs, we are faced a similar challenge depositor plaintiffs, who contend that since the reports of domestic transactions which the-bank is required to make will include transactions to which the depositors parties, were requirement that the bank make a report of the transaction violates the Fourth Amendment rights depositor. of the The complaint filed in the Dis- trict Court the ACLÜ and depositors contains depositors any individual no allegation domestic type of they $10,000 in the engaged were their necessitate that which would currency transaction situ- This not a bank 'to the report it Government. oversight a mere might been. ation there have where Court pleadings where this specificity in the transac- in such a properly participation could infer that indi- tion the fact that necessarily was inferred from allege they “depositors.” vidual plaintiffs are fact can be as to the made, example, Such an inference for which recordkeeping provisions J, of Title . by keep banks various records of certain transactions to indi- check; challenges our discussitín of the as provisions, supra, vidual depositors recordkeeping to deposi- one implicitly recognizes, allegation that is a challenges tor is permit sufficient to consideration recordkeeping provisions, depositor to the since would degree Here, to be how- some affected them. ever, simply we cannot mere one assume that the fact that a depositor in a bank that he has or will engaged means engage in involving $10,000 a transaction more than currency, only which is the type of domestic transaction Secretary’s regulations require that the banks report. being That so, depositor plaintiffs lack stand- ing to challenge the domestic reporting regulations, since they do not show that their transactions are to required reported.28 be in the

“Plaintiffs federal courts ‘must some allege threatened or injury resulting puta- from the actual 28 parts opinion We hold here and other of this that certain plaintiffs did requisite allegations not make the in the District give standing Court them to challenge the Act and the pursuant issued it. In holding, not, so course,'mean dowe n imply, that such claims would be if presented meritorious litigant standing. who has

69 may court as a federal illegal action before tively D., Richard Linda R. jurisdiction.’ sume S. v. ‘personal 614, (1973). There must be con such the outcome’ ‘assure stake presentation sharpens the crete adverseness which largely depends so upon which the court issues questions.’. illumination difficult constitutional Carr, 186, (1962). Baker v. . 369 U. S. ... alleged must injury enough. Abstract is not It be immediately plaintiff ‘has or is sustained sustaining injury’ in danger of some direct as the or conduct. challenged result statute official Mellon, v. 447, (1923). Massachusetts 262 U. S. injury threat must both ‘real injury immediate,’ ‘conjectural’ ‘hypothetical.’ Zwickler, Golden -103, 394 U. S. 109-110 (1969).,; Maryland Casualty Co., Co. v. Coal & Oil Pacific (1941); 312 U. S. United Public 270, Workers v. Mitchell, 330 U. (1947).” S. 89-91 O’Shea v. Littleton, 414 U. 493-494 (1974) (footnote omitted).

We therefore the hold that Fourth Amendment claims of the depositor plaintiffs may not be considered on the record before Nor us. do we think that the California Bankers Association or the Security National Bank can vicariously assert such Fourth on Amendment claims be- general. half bank customers in The regulations promulgated by Secretary the require a report that concerning a currency domestic transaction involving more $10,000 than be only by filed the financial institution which is party a to the transaction; regu- the do, require report lations not a from the customer. 31 CFR 103.22; § 31 see S. u. C. § 1082. Both the bank depositor plaintiffs here argue that regulations the are constitutionally defective because they do require not that a the customer notify to

the financial institution currency domestic concerning the be filed report will depositor the held that have Since we transaction. injury to showing plaintiffs sufficient have not made a report- challenge the to domestic a make constitutional to the ourselves not address we do ing requirements, whose trans- bank customers necessity to those of notice The fact reported. be that the actions must notify the customer of the to require the banks do not right banks, and of the report no constitutional violates adopt free to whatever any in left the event are banks they desire.29 procedures notification customer Secretary’s regulation re similarly that contend Plaintiffs the currency only by the quiring reporting transactions the of domestic thereto, parties violates or financial are banks institutions n Act, specific requirement Act. of the a of the Section part: 1082,provides pertinent XLS. C. § required reported report to under “The transaction by signed chapter made the domestic shall be or otherwise both by or more of the other financial institution involved and one therein, Secretary parties may require.” participants thereto or as the Secretary require language requires the Plaintiffs to contend that this signature report the the individual customer the either on currency transaction, report that customer. Since the or a from' Secretary institution, only report required from the financial has plaintiffs urge, addition, win not be notice to the indi- that there report made the financial institution. vidual customer : urged argument, rebuttal, In in oral Tr. of Oral the Government Act, Arg. only 64-70, S. that IT C. does §206 give authority exceptions Secretary make broad § regulations, promulgating but the Act requirements of Reports on the bills considered each the House Senate provision Congress, house of the each which contained a identical that, language §222, indicated each chamber read language differently. Committee believed that The Senate reports language permitted from the finan institution, both, Rep. 91-1139, supra, customer, No. cial language required felt that while Hoffse Committee Foreign Challenge to the Amendment Fifth C. Reporting Requirements and Domestic depositor plaintiffs’ the rejected Court District violated reporting requirements foreign claim the com- privilege against Amendment depositors’ the Fifth unnecessary to it self-incrimination, and found pulsory challenge domestic similarly the based to the consider to be requirements latter were found the reporting since appeal Fourth Amendment. The violation the for- plaintiffs in No. 72-1196 depositor challenges eign reporting requirements under the Fifth Amendment, challenges reporting likewise their brief the domestic requirements as violative that Amendment. Since they urge affirming are free to in this Court reasons for judgment of the may District Court which not have upon been relied here Court, District we consider objections the Fifth Amendment to both reporting requirements. domestic above, As we plaintiffs, being corpora- noted bank tions, have no privilege compulsory constitutional against self-incrimination virtue of the Fifth Amendment. Henkel, Hale v. (1906). U. S. 43 urges Their brief may they vicariously Fifth assert Amendment claims on depositors. behalf of their But since we hold infra depositor plaintiffs that those actually who are parties in this litigation premature are in asserting any Fifth claims, Amendment we do not believe that the banks reports to be filed customer, both the financial institution and the 91-975, supra, Rep. H. R. No. at 22. similarly We do not reach this it depositor claim as to the relates plaintiffs they allege since failed to injury sufficient below. What- ever merits such a contention vis-á-vis depositors, regulation clearly has no adverse on right effect constitutional banks, since the indisputably statute authorizes the Secre- tary report from the bank. Fifth standing to- assert

under circumstances these have in general. behalf customers claims on Amendment various depositor plaintiffs below made individual filed, complaint in in the allegations and affidavits inwas, he alleged Court. Plaintiff Stark that District being president plaintiff Security addition to National Bank, depositor a customer of and in the bank. Plaintiff alleged depositor Marson he was a customer of that and- in the Bank of America. Plaintiff Lieberman alleged repeatedly past transported that he-had in the recent shipped monetary exceeding one or- more instruments $5,000 places value from' outside the United States to States, the United expected to do likewise the near future. Lieberman, Harwood,. Plaintiffs Bruer, and Durell each they alleged that maintained a financial signature authority interest over one or more bank accounts in foreign This, countries. so far as we can ascertain from record, is the sum and substance depositors’ allegations upon of fact they seek to mount an attack on reporting requirements regu- lations-as violative of the privilege against compulsory granted self-incrimination of them each the Fifth Amendment.

Considering first the depositor challenge plain of the tiffs to the foreign reporting we hold requirements, that such premature.- claims are In Sullivan, United States v. 274 U. S. 259 (1927), Court reviewed a judgment óf this. the Court of Appeals for the Fourth Circuit, 15 F. 2d 809 (1926),' which had held that the Fifth Amendment protected, the respondent from being punished for failure to file an income tax return. This Court reversed the decision below, stating:

“As defendant’s income was the statute taxed', required- a course return. See United States . Sischo, 262 U. S. 165 In the decision that this was contrary to the Constitution we are opinion pressed was Fifth Amendment protection called provided form of return If the too far. from privileged defendant was answers the, objection raised the he could have making refuse make but could not on that account return, decide called on to at all. We are not return withheld; Most might if he have what, anything, would complaint. warranted no It of the items application of the extravagant if not.an an extreme a man say that authorized (cid:127)Fifth Amendment to it income because of his to refuse to state the amount defendant in crime. But if the it had been made point other he should any to test or desired that passed could be tested if the return so that it. have a, conjurer’s circle around He could not draw upon. to by his own declaration that the whole matter would any upon government word the blank write him law.” 274 U. bring danger into S.,'at 263-264. they intend depositor plaintiffs

Here the that allege currency dealings to engage foreign transactions Secretary’s with which the will banks they no additional report, them but make allegation by the required that of the information Secretary will them. time tend tó incriminate It bewill any, if enough what, for us to determine relief from the they a.judicial requirement may pro- obtain reporting they properly specifically ceeding when have raised privilege respect particular claim of items of required by Secretary,, information and the privilege. posture has their claim of overruled plaintiffs’ Fifth here is rights strikingly Amendment SACB, Party in Communist similar to asserted those S., Party 367 U. at 105-110. The Communist there sought to assert the Fifth Amendment claims of its as a officers requirement

defense to the of the registration Subversive Control were not at Act, although Activities the officers that stage proceeding required the Act register; registered register had neither nor refused to on ground registration that them. might incriminate The Court said:

“If may may a claim of privilege is it not made, honored, by be Attorney cannot, General. We on supposition- privilege basis will claimed, be proceed now honored, adjudicate constitutionality Fifth under Amendment of registration provisions. What- may ever procéeding privi- taken after and if the lege provide is claimed will an adequate forum for litigation of Id., issue.” at 107. SACB,

Plaintiffs argue that cases such as Albertson v. (1965), U. S. 70 have relaxed the requirements of earlier but we do cases, not find sup- that contention ported by language or holding of that case. There Attorney petitioned had for and obtained an General order from the Subversive Activities Control Board com- pelling certain named members of Party the Communist to register their affiliation. In response to the Attor- ney petitions, General's both before the Board and in subsequent judicial proceedings, the Party Communist members had asserted privilege against self-incrimi- nation, and their claims had been réjected by the Attor- ney previous >A decision General. of this Court had held that an affirmative answer to the inquiry as to membership in the Party Communist an incrimi- was nating protected admission under the Fifth Amendment. v. States, Blau United 340 U. S. 159 (1950). The differences then between the posture of depositor plaintiffs in this case petitioner that of in Albertson v. SACB supra, are evident. chal- depositor plaintiffs’ that the similarly think

We prema- are reporting requirements lenges the domestic to apparent from the- above, is not it ture. As we noted any of that in these actions complaints allegations $10,000 engaged would be plaintiffs depositor the latter which with the bank transactions domestic Secretary’s regula- report under the required to would Not domestic transactions. pertaining such tions depositor engaged in only is no allegation there com- allegation no but there is transactions, such required a bank was any report such plaint that any de- incriminating make would contain infofmation may claim a extent, any, depositors if To positor. what by reason from the Fifth Amendment privilege arising a transaction report bank to such obligation privilege claim of may resolution when the be left for properly asserted. States, United

Depositor plaintiffs rely on Marchetti v. States, 390 U. S. 62 Grosso United (1968), States, (1968), Haynes v. United U. S. 85 (1968), and claim. Fifth Amendment supporting the merits their privilege In claim cases, each of those was however, requirement reporting asserted as defense to the required by the under chal particular information law way lenge, and no decisions therefore militate those depositor plaintiffs’ against our conclusion that efforts to litigate the Fifth Amendment issue time are premature. Challenge Amendment

D. Plaintiff First ACLU’s Foreign Reporting Domestic Requirements requirements reporting ACLU claims respect transactions invade domestic

its protected associational the First Amend- interests claim this held similar We have earlier ment. speculative hypothetical when organization to requirements imposed to recordkeeping addressed requirement Secretary. Supra, at 55-57. The reported particular transactions be Govern- that be avail- ment, rather than that records them' through legal part removes process, able normal only speculative quality of the claim. But alle- gation complaints respect in with found to the finan- it cial activities of the ACLU states maintains that at one of offices of the accounts the San Francisco Wells Company. & no Fargo allegation Bank Trust There is that the in engages abnormally ACLU regularity large currency domestic transactions, transports or re- monetary ceives from instruments channels commerce, or maintains accounts financial institutions in foreign countries. Until there is showing some Secretary’s the reporting requirements contained would the reporting of information with respect organization’s activities, financial no controversy presented concrete to. for this Court adjudication. Littleton, O’Shea v. S., 414 U. at 493-494.

V bank; All of the depositor plaintiffs have stressed presentations their to the District Court and Court the recordkeeping reporting requirements Secrecy the Bank Act part are focused in large on the assist, acquisition of information enforcement the criminal laws. While, as we have noted, Congress have seems to been equally liability concerned with civil go which might undetected reason of transactions of type required to be recorded or reported' concern the enforcement of the criminal undoubtedly law was prominent in the of the legislators minds who considered that or irrational strange it is We do not think the Act. to appeared what called to having attention Congress, its - of to avoid detection and organized be serious efforts rectify the to activity, have should criminal legislated in Congress, no the. We have doubt that situation. may just prop- sphere legislative its authority, of of the enforcement erly address itself effective the previously enacted as to criminal laws which it has In so . of the instance. enactment those laws first Bill subject of it is of to the strictures doing, course the may of and not those Rights, transgress strictures.30 legislative But the fact that a enactment manifests the of concern for enforcement the criminal law does any generalized suspicion of over pall cast constitutional Having it. concluded on record in that the these plaintiffs relief appeals, have failed to a claim for state Fourth, under Fifth and First, Amendments, the having question concluded the was enactment legislative authority within the of our inquiry Congress, at an is end. appeal

theOn of the California Bankers Association portion No. 72-985 from judgment of the of upholding District Court recordkeeping requirements imposed pursuant I, Title judg- ment is affirmed. the appeal On the bank de- positor plaintiffs in No. portion 72-1196 from that judgment District Court’s upholding recordkeeping requirements I Title and the reporting requirements imposed under authority II, judgment Title is affirmed. likewise On the Gov- have been There recent hearings Congress on various legislative proposals to amend Secrecy the Bank Hearings Act. Secrecy (S. amend the Bank 3828) Act 3814-and S. before the on Subcommittee Financial Institutions of the Senate Committee on.' Banking, Housing Affairs,.92d and Urban Cong., (1972)! 2d Sess. See S. 3814 and Cong., 92d (1972). 2d Sess. 78. portion 72-1073 from that appeal in No.

ernment’s do- which held that judgment Court’s the District II Title imposed under reporting requirements mestic re- is Constitution, judgment the Act violated the Court the District versed. The cause remanded opinion. disposition consistent with this ordered. So Black- Mr. Powell, Mr. Justice with whom Justice joins, concurring. mun concerning join opinion,

I the but add word Court’s reporting requirements. Act’s domestic Secretary to authority The Act confers broad on the from require reports monetary of domestic transactions parties involved! the financial institutions regula- implementing C. 1081 and 1082. The §§ S. tions, require only the financial institution however, exchange report deposit, withdrawal, “file a on each , currency through, payment transfer, or other by, to such institution, financial which involves a transac- $10,000.” currency tion in more than 103.22 § CFR (italics- added). As the properly recognizes, Court we analyze plaintiffs’ must contentions the context of the Ante, Act as the regulations. narrowed at 64. From I perspective, agree do impermissible constitute "an infringement of . rigfrt. constitutional

A significant regulations’ extension reporting requirements, however, pose would substantial and diffi- cult questions constitutional for me. In their full reach, reports apparently authorized open-ended language of upon touch Act intimate areas of an personal individual’s affairs. Financial transactions can reveal much person’s about a activities, associations, upon governmental-intrusion point, some beliefs. At legitimate expectations implicate would these areas particularly is Moreover, potential for abuse privacy. permits access legislative scheme where, here, the. acute judicial invocation without to this information instances, important responsibility In such process. balancing individual interests left societal and scrutiny discretion, executive rather than the unreviewed District magistrate. United States v. U. S. neutral Court, As (1972). 407 U. 316-317 the issues are framed, I however, am in presently accord disposition of the Court’s matter. Douglas, dissenting.

Mr. Justice

I expresses The Court a doubt that the California Bank- ers Association has it standing litigate the claims doubt, asserts. however, dissipated by That should be our decisions. Morton,

Sierra Club v. 405 U. S. 739, stated un- equivocally organization that “an whose are members injured may represent those members in a for. proceeding judicial review.”

Appellants bank, in No. 72-1196 are a national a bank customer and depositor, a organization membership ais customer of banks and money through receives banks members, for its a businessman who has engaged i:.i and expects to engage in foreign financial transactions, and having individuals interests in authority over bank accounts. hardly There can doubt persons these least the individuals and the member- —at ship organization standing. I think —have same is true the national bank No. 72-1196 and the Cali- fornia Bankers Association in No. 72-985. are cases litigate the associations these claims also only-

not of its members but those those banks. will cost depositors of member This those Certainly year. million a estimated, $6 it is over banks, Moreover, enough give standing. the banks Secrecy they The Bank spy must on their customers. requires Act the details of banks to record retain Society their In customers’ Pierce v. financial lives. Sisters, upheld 510, right 268 U. S. the Couft of a representative parochial litigant, a to have stand school, ing questions pertaining rights parents, to raise to the Jackson, guardians, and Barrows children. See v. Baird, 257. In Eisenstadt v. 405 U. S. we upheld the standing.of a contraceptives distributor of rights to assert they unmarried persons, since were denied “a forum in which to assert rights.” their own Id:, at 446. The question of variously standing has been described. “gist” But the of the question, we said in Baker Carr, 369 U. 186, 204, party was whether the “such personal has stake in the outcome of the contro versy as to assure that concrete adverseness which sharp presentation ens the of issues.” There is that “concrete adverseness” here; and that doubtless is the reason the does, Solicitor General raise question which the Court now stirs. n II

The Act has as its primary goal the enforcement of the criminal law.1 The recordkeeping requirements orig- Report, The House 91-975, p. 10, No. states: “Petty criminals, members of the underworld, engaging those ‘white collar’ crime and income tax use, evaders way one another, financial institutions in carrying on their affairs.” That was the reason for requiring report large of domestic cash transactions. “Criininals money deal equiva- or its —cash lent. deposit The large withdrawal of currency amounts of according Congressman mated to author Patman, measure, Department with the of Justice and the Internal (1) Revenue in response problems: Service two “A. developing trend was from their .larger away banks practices traditional microfilming all checks drawn on them.” 116 Cong. (2) respects 16953. Rec. As typical example might of depositors, (cid:127)identification “[a] repu- involve a situation person where a a criminal tation holds an personally account does not make but1 Ibid. deposits or withdrawals.” purpose

The give of the Act was “primary responsibility” under Title II Treasury “to see to it that advantage criminals do not take undue equivalent (monetary instruments) under its unusual circumstances may betray activity. money criminal many’of The these trans- may represent anything actions proceeds lottery from the of a racket money bribery public Id., officials.” at 11. sponsor A on the floor of respect the House stated: “With recordkeeping, full financial problem simply stated; can be past decade, organized crime and criminals have become more sophisticated, greater more use has been made criminal elements of our Nation’s financial institutions. Law enforcement officials believe an effective organized requires attack on crime adequate maintenance of appropriate records financial Cong. institutions.” Rec. 16950. Congressman Patman, . bill, author really stated: “This is which, bill law, if enacted longest into will step be the in the direction stopping crime than other we Congress have had before this long in a Id., time.” at 16951. .While it started with objective, a different changed it was to serve an purpose; additional “We also discovered that secret bank only accounts were not the criminal activities related to the banking field. major law authority enforcement Justice —the Department the U. S. Government called our attention to the —of urgent need for which would adequate make uniform and present recordkeeping practices, or lack recordkeeping prac- tices, by domestic banks and other financial Id., institutions.” 16952.

82 unpun- and go trade undetected international Id., “I at He would

ished.” 16954. added: provide per- legislation first to admit that does not this legis- prevention. fect crime it is felt that the However,, substantially discovery lation will increase the risk of activity criminal who hide his behind undertakes to Id., foreign secrecy.” at 16955. purpose

The same was reflected in Senate. Sena- Proxmire, tor the author of version of Senate bill, purpose provide stated: of the bill tois “[T]he law enforcement authorities greater evidence of financial transactions in order to reduce the incidence 2 Id., of white-collar crime.” at 32627. constitutionally justifiable

Customers have a expecta- tion of privacy the documentary details the finan- in. cial transactions reflected their bank accounts. That wall impregnable. is not Our provides Constitution procedures whereby the confidentiality of one’s financial may affairs be disclosed.

A First, as to the recordkeeping requirements,3 their announced purpose they is that high will have “a degree of usefulness in criminal, tax, or regulatory investigations, 12 proceedings,” U. C. §§ 1829b (a)(2), (a). 1953 duty The of the bank or institution is to microfilm or copy every otherwise check, draft, or similar instrument drawn presented on it or to it payment for keep 2 Report, 91-1139, Senate replete No. is with the same philosophy. pp. 5, 7, See 8. 3 Secretary The Act authorizes carry to issue purposes, out (b). it's 12 U. empowers S. C. 1829b It § him to persons define affected, institutions or 12 (a), (b) (5), U. S. C. 1953 §§ exceptions, exemptions, make special or other arrangements, (c), (f); S. C. 1829b injunctions, to seek §§ 1954; U. S. C. § and to assess and penalties, collect civil S.U. C. 1955. § collec- deposit by it for “received each one record (2). The re- (d)(1) §§C. 1829b 12 U. S. tion” Secretary deter- years unless the to six up tention is S. C. necessary,” 12 U. period “a longer mines that issued regulations4 (g). The 1829b § commenced litigation was 103.34 the time CFR Title 31 § shall: provided that banks taxpayer identification “(a) maintain a record of the and . secure .. account; case of an in the person maintaining the or number of main- individuals, and shall secure or such bank of one more account having security of an individual of social number tain record in that account. a financial interest original or shall, addition, “(b) retain either bank Each following: copy reproduction or or of each other microfilm authority each granting signature over “(1) Each document account; deposit or share deposit statement, ledger “(2) record on each Each card or other to, in, respect showing or with account, or each transaction. share account; ' money the bank “(3) check, draft, drawn on Each clean or order by it, payable except on accounts or and those drawn issued average least 100 expected can have them of at be drawn on an year on per over the on each occasion checks month calendar or checks, (i) issued, which such checks are- and which dividend are (ii) (iii) checks, (iv) payroll checks,' employee insurance benefit checks, (v) (vi) cheeks, claim medical drawn on benefit checks governmental (vii) agency accounts, drawn brokers or checks (viii) fiduciary accounts, securities, dealers checks on drawn (ix) institutions, (x) pension checks on other or drawn financial or checks; annuity “(4) charges charges periodic Each item other bank or made than (cid:127) pursuant agreement customer, comprising with the a debit to deposit account, required kept, a customer’s or share not to be and exempted, (b) (3) not specifically subparagraph section; under of this “(5) item, including checks, drafts, credit, Each of or transfers $10,000 of more than person, remitted or to a transferred account place States; or outside the United A,record “(6) of each funds, remittance or transfer of or of currency, monetary instruments, other checks, securities, investment which our quicksand and extent of the depth show the operate.5 now financial institutions must a-minimum billion checks— estimated that of -20 It is photocopied and perhaps 30 have billion —will approxi of will weight pieces paper these little pounds million a year.6 mate highly governmental espionage would be useful to It reports from all our hard- to have like our all bookstores, $10,000 person, credit, place of more than to a account or outside or States; the United “ $10,000 (7) Each check or draft in an in excess of drawn amount bank, a,.foreign purchased, on or issued received for credit or collection, acquired bank; .or otherwise item, checks,

“(8) including credit, Each drafts or transfers $10,000 directly through more than received a domestic institution, by letter, any means, financial cable or other from a person, place States; account outside the United “(9) receipt monetary A currency, record each other instru- ments, checks, securities, or investment each of funds transfer credit, $10,000 of more than directly received on one occasion through and a institution, person, domestic financial from a place or account States; outside United and “(10) prepared Records or ordinary received a bank in the business, course of which would be needed a to reconstruct demand deposit account and to deposited trace a check in such account through processing system its domestic supply description or to a deposited a check. subparagraph This applicable only shall be with respect deposits.” Reg. to demand 37 Fed. 6914. During litigation provision the above was amended Secretary making unnecessary it copies to microfilm of checks “drawn less,” $100 or (b) (3) (1973). CFR 103.34 § Since banks copy must all it checks is hard to see exemption how this new is meaningful. requirements Like placed are on securities, brokers and dealers 31 CFR 103.35. § 6 Hearings Foreign Secrecy on Bank (H. Bank and Records R. 15073) before Banking the House Committee on Currency, and 91st Cong., Sess., (1969-1970). 1st and 2d records These drugstores. all our stores, and retail ware criminal, investigations. “useful” might too those furnish telltale clues habits reading One’s of view. What point one us to bending on are who bent may furnish retail stores and hardware buys one soap powders, of wires, uses potential clues to all mandatory recording of A by criminals. like used the record- be better than would conversations telephone if Brother Secrecy Act, Big Bank under the of checks ing avail- checks—now way: The his records have In a sense highly useful. investigators able to the —are examin- By he writes. by the checks defined person is a lawyers, doctors, know his get to agents them the ing religious allies, social creditors, political connections, maga- papers and interests, affiliation, educational are all ad These on reads, he and so zines infinitum. we that security number; and one’s social now tied to that items will enrich these other banks, have the data possible for a and make it storehouse bureaucrat — get in an the names pushing one button —to instant po- Americans who subversives or the 190 are .million likely tential candidates. submit, agree I sheer is,

It nonsense to Secre- oj every all bank records citizen tary “have a high criminal, tax, regulatory of usefulness inves- degree That non- proceedings.” is unadulterated tigations every unless we are assume that citizen is a sense I assumption cannot make. crook, an banking give transactions of an a Since the individual fairly religion, accürate account of his ideology, opinions, a interests, regulation impounding them and making automatically them available to all federal investigative sledge-hammer approach problem agencies is only scalpel manage. a can delicate Where fundamental personal rights are involved—as is true when as here the

86 poli one’s.beliefs, ideas, access to gets large

Government Act like—the and the concerns, cultural- religion, tics, Connecticut, 310. (Cantwell v. “narrowly drawn” should be evil.7 Bank accounts 307) precise 296, meet U. S. only rush plans. But we harbor criminal times customers and our banks their we vent on crowd when present requirements leveling and devastating America is ready yet agree I sc Act. am not all constitutional evil that we must level possessed with catch the tools to our civil authorities give barriers criminals. compulsory record- confined

Heretofore Nation has this record- (1) monitor either required to that keeping States, (2) Marchetti v. United keeper, or his business. 100, United States v. 312 U. S. 39, Darby, 390 U. S. Harlan writ then, Even as Mr. Justice are illustrative. would be records that ing said, they for the Court must than “customarily” “public” rather kept, have “ ‘essentially non private purpose, and out of an arise ” Marchetti V. regulatory inquiry.’ criminal area . States, supra, United at 57 way here, requirements Those are in no satisfied an yet upon Nation there is saddled the banks spy on their year bill of million a $6 estimated over .to customers. 7 Chicago Wade, 113, 155; Dept. Roe v. 410 And see Police Gooding 518, 522; Mosley, Wilson, 92, 101; S. 408 U. S. 405 U. v. v. Birmingham, 147, v. John 151; Shuttlesworth v. Cameron 394 U. S. 250; son, 611, Koota, 241, 617; 390 S. Zwickler v. 389 U. S. U. 195, Kentucky, Elkins, 54, 62; White-hill 389 U. S. Ashton v. S. v. Russell, 11, 201; v. 384 U. S. 18. Elfbrandt expressed concurring opinions. See view is often same Gregory Bolton, concurring); J., Doe v. S.U. (Douglas, Chicago, S. 111, (Black, J., concurring); States 394 U. United v. Robel, J., concurring result). 389 U. (Beennan,

87 B Second, they reporting provisions of Act, .to foreign financial trans- types of two require disclosure provision requires a re- relationships. One actions and country of mone- transportation into or out of the port requires exceeding $5,000.8 tary instruments Another relationship with “a parties any transaction or keep make reports make such or agency” to financial may require.9 Civil10 and Secretary such as the records reporting penalties are sanctions behind these criminal11 provisions. Secretary to make the requires

The Act also concerning transactions “available reported information chap- purpose provisions for a consistent with the agency of the Federal any department ter to other or any upon request.12 And overcome Government” requires grant claims of self-incrimination it use immunity.13 8 31 U. S. C. §1101. 9 requires yearly in Secretary reports The 31 U. S. C. 1121. § any in, signature

tax “financial other au returns of interest or or thority over, bank, in a securities or other financial account foreign country,” 31 CFR 103.24. § 10 ; 31 U. S. C. 1102-1103 31 CFR 103.47-103.48. §§ §§ ; C. 1058-1059 31 CFR 103.49. §§ § 31 U. S. C. The read as follows: §1061. Secretary may any any “The make information set forth any report pursuant part available other received to this request department agency upon or the United States of the department agency, writing stating head of such made desired, criminal, regulatory particular information tax or investigation proceeding in connection with which the information sought is and the official need therefor.” 31 CFR 103.43. § Kastigar States, v. United 31 U. S. C. 1060. The Court in § immunity” 406 U. held “use .that satisfies Self-Incrimina . disagreed I persist Clause of the Fifth Amendment then and tion my immunity, immunity, view that it “transactional” not “use” Secretary respecté estab-

As domestic transactions reporting reports requirements. (1) lished two Routine exceptions, required concerning trans- are, some $10,000 currency from each finan- action of more than signature cial institution involved.14 The at least one party to principal required.15 (2) the transaction is right time trial reserved the grant exemptions requirements, impose from the addi- recordkeeping reporting requirements tional or authorized by statute, modify, requirements or otherwise of this part.16 States, in Katz v. United 347,

We said 389 U. 351— S. person 352: knowingly exposes public, “What a to the even in office, subject his own home or is not a of Fourth protection. pre- Amendment . . . But he what seeks 'id., is.required protection. that to lift this constitutional See (dissenting opinion). immunity 462-467 But “use” is since present though “the law” of the long I if doubt it can sur- Court— wri(e against immunity vive—I do not this dissent narrow granted. 1431 CFR 103.22. § 15 31 U. S. C. §1082. “(a) At that time 31 CFR 103.45 read The as follows: Secre § tary, discretion, may his sole written order or authorization exceptions to, grant exemptions from, impose make additional record- keeping reporting requirements statute, or by, authorized or otherwise modify, requirements part.- exceptions, exemptions, Such requirements may unconditional, modifications be conditional or may apply particular persons persons, may to classes of and apply particular transactions They or classes of transactions. shall, however, applicable only be expressly as stated in the order or authorization, they and shall be revocable in the sole discretion of Secretary. “(b) authority shall have the to further define all terms used herein.” then, language “impose Since additional recordkeeping or re- porting requirements by statute, authorized modify” or otherwise has been deleted from 103.45. § to the public, accessible even in an area private, as serve in United constitutionally As stated protected.” may White, is “what 745, question 752, States v. U. S. by the Fourth protected privacy” will be expectations A search “in the absence of a warrant.” Amendment per se unreason a warrant is conducted seizure without excep carefully “jealously drawn” subject to able, 499. One’s States, Jones v. United 357 U. S. tions, privacy” “expectations- are within bank accounts one’s finances they only mirror not category. For family, life, his interests, way his debts, but his his administrative commitments. There are and his civic Court, Municipal documents, cf. Camara v. summonses 541; Seattle, But 523; City See v. 387 U. S. U. S. requirement their enforcement receive there is States judicial order, and a United judicial scrutiny Court, Listrict 313-318. As. case, in that “The does we said Amendment Fourth contemplate Government executive officers duty magistrates. and disinterested neutral Their and responsibility investigate, are to enforce the to laws, prosecute. investiga . . . with this those-charged But duty be prosecutorial judges tive and should not the sole constitutionally of to utilize sensitive means when pursuing judgment, their tasks. The historical which Amendment is that unreviewed accepts, Fourth may yield readily pressures executive discretion too potential evidence incriminating to obtain and overlook Id., privacy protected speech.”- and 317. invasions at Suppose Congress passed telephone requiring a law record companies telephone and retain all calls and any available to federal agency request. make them on Would we hesitate even a moment striking it before I not, think for we down? condemned in United States Court “the v. U. S. District unsuspected broad gov- privacy into conversational ernmental incursions Id., at 313. entails.” electronic surveillance well record said, may I checking account; A as have fully as tran- opinion, and beliefs activities, citizen’s telephone conversations. his scripts n may requirements Amendment warrant The Fourth they cer- but amendment removed constitutional Secretary of the tainly replaced cannot be be highly' will information Treasury’s finding that certain or investigations tax, regulatory or “criminal, useful in (b). C. 1951 proceedings.” §. constitutionality of the quéstion cannot avoid the We regu- of the reporting provisions of the Act and of the applied they yet by saying have not been lations regu- customer criminal case. Under-the Act reports investigative forward to the go lations the notice to request-without on written prosecuting agency Delivery requi- of the without the customer. records probable hearing site cause17-breaches Fourth Amendment. my agree also Brother substance

I Brennan’s authority grant by Congress view that to- .the Treasury pass of the is too broad to constitu- legislation symptonmtic tional muster. This is prosecution country reporting A criminal in this for not an prosecution overseas transaction still a criminal under Bill Rights; "of and to applicable these the Fourth Amendment been has beginning. from the immigration stopping people officers Cases leaving entering obviously are country who border are inapposite certainly saying Court cannot be serious monetary being value the article seized is relevant to whether the search and seizure without a warrant constitutional. was As “persons” said in Katz it is “places” that the Fourth Amendment protects; point and it engage would labor the lengthy argu in “things” ment that “places” as well as object are not of the Fourth Amendment’s concerns. mounting Executive by the Congress eclipse

slow new. was re is not brand It phenomenon power. The States, 295 Corp. v. U. S. 495. United in Schechter flected Robel, more recent 258, is a 389 U. S. States v. United Assn. v. Television United Gable National example. England Power FPC v. New States, S. 336, and 415 U. recent'. These omnibus Co., are even more 345, 415 U. S. to make Branch allow the Executive grants power teachings of it in violation the law as chooses Sawyer, 579, Tube Co. Youngstown Sheet & Schechter, congressional, lawmaking is a as well as Executive, not an function. dissenting. Justice Brennan,

Mr. Douglas’ I II-A I concur in Parts Justice Mr. reporting domestic opinion. As to the Act’s I need to address the inde- however, see no requirements,- plaintiffs below objections constitutional pendent requirements The in- attempt reporting to raise. are separable considerably from—and some cases broader recordkeeping requirements. Thus, since than —the provisions unconstitutionally my recordkeeping view the impermissibly authority broad in the vest S, Robel, United States v. Treasury, see U. (1967) (Brennan, J., concurring result), the re- porting provisions, too, are invalid. symbiotic report- recordkeeping nature.of the clearly requirements expressions manifested

ing purpose found in congressional (b) § 12 U. S. C. 1951 lay § and 31 S. C. which down blanket com- “reports” mands “records” and be required where they high degree “have of usefulness in criminal, tax, regulatory investigations or proceedings.” example interdependence of this may

One be found in 1951-1953, apply 12 Ú. C. “any §§ S'. uninsured 92 them- institution,”

bank or uninsured terms which are selves not defined in the Act. 1953 authorizes Section “any Secretary require the of records keeping to type” may evidence them of any long require so as he insured banks. him to Section 1952 authorizes banks making appropriate reports by “the uninsured respect any type or uninsured institutions ownership, control, any their managements and and changes appears legislative therein.” As from the provisions permitting these work in history, tandem, Secretary illegal to detect instances of use of sham or merely party in which the institutional transactions ego purportedly alter of the customer it See services. an Rep. Foreign 91-1139, p. (1970); Hearings S. No. 3 on Secrecy Bank (H. 15073) and Bank before Records R. Banking Currency, Committee and House on 91st Cong., (1969-1970). pro- 1st and 2d 10-14 Neither Sess., vision would usefully practices aid the detection of such without the other. only

Not recordkeeping are the re- reporting quirements functionally reporting but inseparable, provisions impose requirements, additional thus add- ing power Secretary to invade individual rights. For instance, the reporting requirement for all transactions involving domestic institutions, financial U. S. C. Secretary § authorizes the require reports any any time and in manner detail, trans- action that involves the “payment, receipt, or transfer of United currency, States monetary such other in- Secretary as the may specify.” struments Although . Secretary by regulation has meaning limited the “monetary instruments,” 31 CFR 103.11, § and invoked only section where the transaction involves more than $10,000, see CFR 103.22, § this in way no alters vice fundamental of the statute. in United States v. vice, concurring opinion That see Robel, supra, delegation power is the and; lays indefinite terms statute that under broad potentially criminal down sanctions affects funda Sullivan, Books, Inc. mental Bantam v. rights. See Connecticut, Cantwell (1963); 310 U. S. (1940). My applies 304-307 view Robel here: legislature’s “Formulation of is a policy primary responsibility, electorate, it by to and .entrusted to Congress delegates authority extent under indefinite, standards, this policy-making function is passed on- other agencies, often not answerable responsive or in the same' degree people. to the of permissible statutory vagueness ‘[Standards are protected Button, strict in NAACP areas. v. S., at 432. ‘Without-explicit U. action law makers, great of import constitutional incisions relegated effect would default to administra system tors under our of government, who? are. endowed with authority to decide them.’ Greene v. McElroy, 360 507.” S., S. 389 U. at 276. In the casé of Secrecy Act, the Bank potentially also involving First, Fourth, and Fifth rights Amendment of majority the vast of citizenry, our it exceeds Congress’ power constitutional empower of delegation to Secre- of Treasury whatever tary reports and records possessed he believes to be of-a “high of degree usefulness” where purpose the. is-to further “criminal, or tax, regulatory investigations or proceedings.” Mr. Marshall, Justice dissenting. I

Although general am agreement opinions Douglas my Brothers I believe it Brennan, important to set I forth what view the as issue essential in these cases. of the requirements recordkeeping purposes legis- language of the from Act are clear Secrecy

Bank records which- maintenance require itself—to lation Govern- for examination be available later will “criminal, tax, regulatory'investigations ment 1829b-(a)(2) and .§§ C. proceedings.” See is .but records of the thus The maintenance 1951(b). whereby the process in a step the initial Government (cid:127) papers private financial acquire the seeks to individuals, businesses, organizations ‘and millions instru- negotiable use maintain accounts banks side carry out the financial checks ments such attempt In my this day-by-day view, transactions. their seizure a search and acquire private papers constitutes Amendment. under the Fourth States, Boyd long As Court settled United ago production of a compulsory (1886)., 116 U. “a charge private papers man’s a criminal to establish Amend scope of the Fourth against him ... within the acquisition .” The ment to the Constitution . . . produce order to records as we said of the case, this Boyd, may “aggravating an lack incidents invoice forcible, entry such as seizure, actual arid search info searching amongst, papers a man’s .and his . .. house /’ ibid., but its change cannot intrinsic character as a search and We do well to seizure. recall admon- (cid:127) n in Boyd, id., ishment at 635:

-“It may. it, thing is the obnoxious in--its be^'-that "repulsive- mildest andr feast form;, illegitimate but and practices-get foojfcing unconstitutional their first way, in that namely,-by approaches slight silent and legal deviations from procedure.” modes of By compelling an otherwise unwilling photo- bank to .copy'the customers, checks its Government has as .of q much of in seizing hand those checks ifas it had forced

95 private person a to break into customer's home or Byars office the checks there. v. photocopy and See States, (1927). Compare United 273 28 Burdeau v. U. S. McDowell, Lustig v. United U. 465 (1921), S. States, (Frankfurter, also J.). 78-79 See Cotngold v. Our States, (CA9 1966). United 367 F. 2d Fourth not be jurisprudence Amendment so should through wooden the fact' ignore microfilming other techniques of this electronic searches age, illegal place and seizures char can the brute force' take without general acteristic which raised the ire of warrants Founding Carrington, Fathers. See v. Entick Texas, How. (1765); St. Tr. 1029 379 U. v. Stanford 483-484 (1965). emphasized As we in Katz v. United States, any S. 347 (1967), the absence physical of tangible property seizure does not foreclose Id., Fourth inquiry. Amendment 352-353. The at “governs Fourth Amendment only not the seizure of tangible but items,' recording extends as well Id., oral statements ....’’ at 353.' By logic, the same apply Fourth Amendment should the recording to. Act And here. such a checks massive mandated and indiscriminate only seizure, without search probable but also without cause to believe that .warrant obtained is to any investiga relevant evidence'.to tion, is'plainly principles inconsistent with the behind the Texas, Amendment. See supra, at 485-486; Stanford States, Katz supra, v. United at 356-359. is suggested that thére no

It.is seizure under the Fourth Amendment because the bank, required which is to create already party maintain record, to the trans- ante, action. Surely See 52. this is irrelevant to the question of whether Government search or seizure is a

involved. The fact that one private disclosed has papers to the for a bank, purpose, limited within the context of relationship,

a confidential customer-bank- does mean that one right privacy papers. has waived all to the States, Like pay phone the user in Katz v. United having paid who, toll, was “entitled to assume that he words utters the mouthpiece into will not be broadcast -tothe S., 389 U. so the customer world/’ bank, having deposited a written or check, has expectation reasonable that his check will be ^examined purposes for bank only credit, debit or his balance —to account—and kept not recorded and on file for several years -by Government decree so it can be available scrutiny'. Government United First See States v. Mobile, Nat. Bank Supp. 616 (SD 1946). F. Ala. The majority argues any. Fourth Amendment claim is premature, since the only Act itself .affects keeping of records way no changes re law garding acquisition of the records the Government. I agree. attempt cannot This acquisi bifurcate the tion of information into indépendent two and unrelated steps wholly unrealistic. As the Government itself concedes, “banks past have voluntarily allowed law enforcement to inspect officials bank records with requiring out the issuance- of a summons.” Brief for Appellees in Nos. 72-985 and 72-1196, p.- n. 19. 38. Indeed, the Chief of Organized Crime and Racketeer ing Section Division of the Criminal Justice De partment a Senate Subcommittee in 1972 told that' access FBI to bank process records without occurs “with some degree of frequency.”. Hearings to amend the Bank (S., Secrecy Act -3814’and 3828) before the Subcom mittee on Financial Institutions of the Senate Committee on Housing Banking, and Urban Affairs,:92d Cong., 2d Seas., (1972). 114-115 plain fact of the matter is that the Act’s record-

keeping"requirement system feeds into a of widespread agencies by records Government bank informal access to If these customers’ personnel. law enforcement they now, raised be Amendment claims cannot Fourth checks recorded, their for once all, cannot raised judicial process and readily accessible, will be without cause, any of the probable any showing without informal access to agencies presently have several that records. bank suggests- that the Act does not Government way precludé refusing from to allow informal banks process on insisting legal

access and the issuance turning before over customer’s financial records. accompanied if refusal, however, by Such a even notice to the an opportunity customer with for him to claims, late, assert his constitutional too comes for the place. seizure already By has taken virtue the. Act’s recordkeeping requirement, copies of the customer’s already checks are in the bank’s files and amenable to process. already The seizure has occurred, and all that remains is the transfer of agent the documents from the forced accomplish the Government seizure to the Government Indeed, ironic although itself. it is majority deems the bank customers’ Fourth Amend- premature, ment claims it also intimates once bank copies has made checks, of a customer’s the cus- tomer no longer has standing to invoke his Fourth Amend- rights ment when a demand is made on bank ante, Government the records. See at 53. By accepting the Government’s approach bifurcated the recordkeeping requirement acquisition and the records, majority engages in a hollow charade where- by Fourth Amendment claims are to be labeled pre- mature such until they time as can be deemed too late. I accept

Nor can the majority’s analysis of the First Amendment claims associational raised the American seek who members of its on behalf Liberties’Union

Civil support of their financial anonymity preserve orga gives Amendment The- First organization. right to maintain ACLU such as the nizations the. or contribute belong who confidence the names those compelling governmental organization, absent tg-; Alabama, NAACP v. requiring- disclosure. See interest Postmaster Lamont v. (1958). 449 also 357 U. S. See Legisla General, Florida (1965); U. Gibson 381 S. 301 v. Comm’n, (1963); Louisi 539 Investigation 372 S. tive U. NAACP, (1961); 293 ana v. 366 U. S. rel. Gremillion ex Tucker, Little (1960); Bates v. Shelton v. 364 U. S. 479 Rock, Rumley, 345 (1960); States 361 U. S. 516 United v. certainly with this (1953). is inconsistent S. It showing Government, lcng line of cases for absent with which the whatsoever, of need the bank keep to make and a micro ACLU maintains an account de film record of all checks received the ACLU and posited requirement, result of fo its account. The net this obviously, easily accessible list of all of the ACLU’s an And, given widespread informal -contributors. access supra, at 96- agencies, to.bank records Government see surely existence of such list will chill exercise of rights part First on the Amendment association those who wish to have their contributions remain anon The technique examining .of bank accounts ymous. political investigate organizations is, unfortunately, not See, g., Roberts, e. rare. Pollard v. Supp. 283 F. (ED curiam, per Ark.), aff’d 14 (1968); Eastland, United Fund Servicemen’s v. 159 U. S. States . App. D. (1973). C. 352. 488 F. 2d 1252 Amendment freedoms are “delicate and vulner First They able.” need NAACP breathing space survive. Button, 37 1 U. (1963). The threat of easily disclosure entailed the existence of an accessible may list of contributors deter the Amend- exercise First ' rights potently as ibid. ment disclosure itself. Cf. Eastland, See also United States Servicemen’s Fund v. 365-368, 2d, supra, at im- 488 F. at 1265-1268. More portantly, slight however be may the- inhibition of First rights Amendment caused bank’s (cid:127) maintenance of the list of contributors, the crucial factor is that Government has shown no com- need, pelling otherwise, for maintenance such records. Surely the fact that may negotiable some use instruments for illegal purposes justify cannot the Government’s running roughshod over the First Amendment rights yet hundreds organizations controversial .lawful ¿he like may Congress ACLU. well been correct have- in concluding that law enforcement would facilitated by the dragnet requirements of Act. Those who our wrote Constitution, however, recognized impor- more ‘ tant values. I respectfully dissent. notes Federal Reserve but does not include bank customarily negotiable accepted checks or other instruments not money.” 31 CFR 103.11. § .103,25 prescribed by Secretary, (a), form see 31 CFR § reporting Treasury for the currency of the domestic transactions is (Currency Form 4789 Report). Transaction See Jurisdictional 72-1073, p. Statement for the App. D, United States in No. 121'. requires Form required information similar pre- to that Treasury reporting form, 12, supra, vious (1) including see n. name, address, profession security business and social .number

Case Details

Case Name: California Bankers Assn. v. Shultz

Court Name: Supreme Court of the United States

Date Published: Apr 1, 1974

Citation: 416 U.S. 21

Docket Number: 72-985

Court Abbreviation: SCOTUS