Montana Attorney General Opinion 15-293

Opinion No. 293 Banks and Banking-RepOl·ts-State Banks-Federal Reserve Bank- Superintendent of Banks. HELD: 'J:he Superintendent of Hank;; is not authorized nor permitted by Sec. (~5, Chapter 89, Laws of U)27, to gi\-e to Federal Reserve Bank information concerning all state banks and to com- ment upon, classify or make compari- sons as to financial condition. August S, 1933. You have asked my opinion with re- gard to your duty and power concern- ing the following telegraphic request from the Federal Reserve Bank of :\linneapolis: "I today received request as follows from Governor Black of J;~ederal He- sene Board Washington Stop Desire full information as follows list of nonmember banks in Ninth Federal Reserve District divided into gronps as follows First banks that are in good condition Second banks in fair condi- tion which can obtain locally such financial assistance as will afford .them relief in matter of LIIliJital struc- ture Third banks that are in a weak- ened condition and will require as- sistance in way of preferred stock to build up and strengthen their capital structure certainly before June 1934 Fourth hanks that are or in the near future may become emergency cases and may require attention now in the matter of rebuilding capital structure through preferred stock and or may need additional credit Stop First list need only contain name location cap- ital ~tructure deposits Stop Second list should contain same information as first together with information as to how their condition can be aided locally Stop Third list should contain detaile<l informa lion as to assets and liabilities and concrete statement of aid needed Stop Fourth list should present full picture of each bank named with statement as to present and Immediate needs of each bank Stop Please give this information in full also please submit list of closed banks in your state with as full in- forma tion as possible as to the con- ditions so that consideration may be given to reopening of such banks or payments of dividends by each closed bank out of its own assets or with aid of reconstruction finance corporation financing Stop Also please giYe state- ment of localities in your state in which there arc no banking facilities with suggestion as to possibility of establishing banks in such localities with or without government aid so that no community shall be without banking facilities Stop All this infor- mation is necessary that Federal Re- serve Board may consider general banking situation and condition of each bank that needs some relief in e,-olving plan not only for remedying condition of member banks but of non- memher banks as well as providing localities without banking facilities with such facilities." The IIUlgnitude of this request is rather amazing. I find nothing in our han king laws which either compels or authol'i?~s the Superintendent of Banks to comply with such a sweeping request and subjecting our state banking sys- tem to such complete domination by the Federal Heserve System. OPINIONS OF 'l'HE ATTORNEY GE~E'RAL 199 Section G5, Chapter 89, Laws of Hr27. provides: "The report and any information contained in the reports and state- ments hereinabove provided for, other than such reports as are required to be published, shall be deemed to be secret and for the confidential infor- mation of the Superintendent of Bank;.; only, and such information shall not be imparted to any persons who are not offiCially associated in and with the office of the Superintendent of Banks. and the information therein contained shall be used by the Super- intendent of Banks only in the fur- therance of his official duties, except that it shall be lawful for the depart- ment to exchange information with the Federal Banking Department and "ith departments of other states and to furnish information to prosecuting officials who request the same for use in pursuit of official duties." Divulging such information is made a felony punishable by a fine of not exceeding One 'l'housand Dollars, or by imprisonment in the State Penitentiary for not exceeding five years, or by both ;.;uch fine and imprisonment. It is my opinion that such wholesale eiassification and comment by you upon the financial condition of every state hank in Montana, would be a violation of the letter and spirit of said section abo\'e quoted, and that it would be an abuse of such discretion on your part and not within the scope, purpose and intent of the exception pro\'ided in ;.;aid section. Conceding that cooperation with the Federal Reserve Bank for the benefit of certain individual banks and locali- ties without banks, might be beneficial for such banks and localities. the neces- sary information to accomplish such purpose may be obtained otherwise than hy giving out wholesale information, together \\ith your comment, classifi- cation and comparison, concerning all Ole banks in the state, and without their consent first obtained.