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Davis v. National Credit Union Administration Board

United States District Court, W.D. New York

December 18, 2017

JIHAN DAVIS, Movant,
v.
NATIONAL CREDIT UNION ADMINISTRATION BOARD, Respondent.

          DECISION AND ORDER

          HON. FRANK P. GERACI JR. CHIEF JUDGE

         INTRODUCTION

         Pursuant to the Right to Financial Privacy Act of 1978 (“RFPA”), 12 U.S.C. §§ 3401-3422 (2012), Jihan Davis (“Movant”) seeks an order preventing the National Credit Union Administration (“NCUA”) from obtaining access to her financial records at Bank of America, N.A. and quashing the NCUA's administrative subpoena requiring the production of those records from Bank of America. Movant asserts that (1) the subpoenaed records are not relevant to a legitimate law enforcement inquiry; and (2) the NCUA failed to substantially comply with the RFPA. See ECF No. 1, at 2. For the reasons that follow, Movant's Motion for Order (ECF No. 1) is GRANTED IN PART and DENIED IN PART.

         NCUA'S FACTUAL ACCOUNT[1]

         On or about July 13, 2015, Movant was hired to work as a branch manager at Lexington Avenue Federal Credit Union (“Lexington Avenue”), a federally insured credit union supervised by the NCUA. ECF No. 4, at 2; see also 12 U.S.C. §§ 1752, 1756 (2012). In 2016, Lexington Avenue flagged irregularities in the data reported from Movant's branch. ECF No. 4, at 2. After investigating the discrepancies, Lexington Avenue determined that Movant had been signing cash out of the vault, indicating that it was deposited somewhere, and then not depositing it in the indicated location. Id. Movant's employment was subsequently terminated on or about August 31, 2016. Id. at 3.

         The NCUA Board ultimately issued an Order of Investigation under 12 U.S.C. §§ 1784(b) and 1786(p) to determine

the extent of any unsafe or unsound practices, breaches of fiduciary duty, or violations of law or regulations by former Lexington Avenue branch supervisor Jihan Davis; any resulting gain or other benefit to her; any loss or other harm to Lexington Avenue; the nature of her intent and/or personal dishonesty in any such misconduct; as well as any other suspected misconduct, resulting gains or benefits, intention or personal dishonesty by or to any other institution-affiliated party that may come to light during the investigation of the former branch supervisor.

Id. The Order of Investigation named NCUA Trial Attorney Rob F. Robine as one of the Officers to Conduct the Investigation, and he issued a subpoena to depose Movant. Id. During her deposition, Movant testified:

(1) that she had never handled more than a “couple hundred” dollars outside of the employment context; (2) that she maintains an account at Bank of America; (3) that in or around March of 2016 she purchased a new vehicle with an approximately $10, 000 down payment; (4) that the source of the down payment was savings and a tax refund check; (5) that she lives paycheck; (6) that she did not recall depositing $19, 200 in cash into her account at Bank of America on February 29, 2016; and (7) that she would have noticed a deposit of that amount into the Bank of America account.

Id. at 4. After obtaining that deposition testimony, Mr. Robine issued the now-contested subpoena on October 13, 2017 and mailed Movant a copy with the requisite customer notice, as outlined in 12 U.S.C. § 3405(2). Id. Although Mr. Robine sent the copy via Certified Mail, as of October 26, 2017, it had not been delivered to Movant. Id. In response, Mr. Robine mailed another copy of the subpoena and notice that day via U.S. Mail, followed by an emailed copy of both on October 30, 2017. Id. The subpoena requested production of the requested documents by October 30, 2017, see ECF No. 4-2, but-as of December 13, 2017-the NCUA had not received Movant's account records from Bank of America, ECF No. 4, at 4.

         DISCUSSION

         Movant filed the instant Motion on November 6, 2017. ECF No. 1. She challenges enforcement of the NCUA's administrative subpoena on two grounds: she claims that (1) the records sought are not relevant to a legitimate law enforcement inquiry; and (2) the NCUA did not substantially comply with the RFPA in notifying her that the records had been subpoenaed. See Id. at 1.

         The RFPA sets forth the manner in which bank customers may challenge government access to their financial accounts. See 12 U.S.C. § 3410(a), (e); Lerman v. SEC, 928 F.Supp.2d 798, 801-02 (S.D.N.Y. 2013) (citing cases). Under its terms, a customer must file a motion to quash or application to enjoin “[w]ithin ten days of service or within fourteen days of mailing a subpena [sic], summons, or formal written request.” 12 U.S.C. § 3410(a). The customer must include

an affidavit or sworn statement (1) stating that the applicant is a customer of the financial institution from which financial records pertaining to him have been sought; and (2) stating the applicant's reasons for believing that the financial records sought are not relevant to the legitimate law enforcement inquiry stated by the Government authority in its ...

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