The American Bankers Association is urging a federal judge to reject an invasion of privacy suit against a bank that filed a suspect-activity report on a borrower.
The trade group said Congress made clear in the Annunzio-Wylie Anti- Money Laundering Act that bank customers are prohibited from suing a bank for filing a criminal referral form with a government regulator.
It urged the U.S. Bankruptcy Court in Athens, Ga., to toss out a suit by Romar International Inc. against SouthTrust Bank of Alabama, which turned in the company to the Office of the Comptroller of the Currency on suspicion of loan fraud.
John Byrne, the ABA's senior federal legislative counsel, said there are no exceptions to the safe harbor provision. "Good faith is not a requirement," he said. "In fact, there is no requirement. The protection is provided to you as long as you are reporting a possible violation of the law."
This is the third case in two years challenging the safe harbor provisions. A federal appeals court rejected one of the cases, and the bank settled the other claim.