Tc. Russler et Sh. Epstein, DISCLOSURE OF CUSTOMER INFORMATION TO 3RD PARTIES - WHEN IS THE BANK LIABLE, The Banking law journal, 111(3), 1994, pp. 258-291
In connection with deposits, loan applications, and other more complex
financial transactions, people provide financial information to banks
. Faced with third-party requests for this information, a bank has to
consider two sometimes conflicting legal duties: (1) its duty of confi
dentiality to its customer and (2) its duty in special circumstances t
o disclose customer information to third parties. These duties, develo
ped by the courts, often go beyond the traditional contractual duties
of debtor and creditor. The authors examine the case law interpreting
these duties and explain what the bank must do when it is caught in a
conflict between the duty of confidentiality to its customer and the d
uty to disclose information to a third party. Also discussed is the ch
oice of law issue: What state's law is controlling when the bank is in
one state, the customer in another, and the third-party in yet anothe
r?