Cal. Bankers Ass'n v. Shultz - 416 U.S. 21, 94 S. Ct. 1494 (1974)

Rule:

The mere maintenance of records by banks under the compulsion of the regulations of the Bank Secrecy Act, 12 U.S.C.S. §§ 1730d, 1829b, 1951-1959, invades no Fourth Amendment right of any depositor.

Facts:

Plaintiff, California Bankers Association, questioned the constitutionality of the Bank Secrecy Act of 1970 (Act), 12 U.S.C.S. §§ 1730d, 1829b, 1951-1959 and the implementing regulations promulgated thereunder, 31 U.S.C.S. §§ 1051-1062, 1081-1083, 1101-1105, 1121-1122. Plaintiff alleged that the Act violated U.S. Const. amends. I, IV, V, IX, X, and XIV. The lower court upheld the constitutionality of recordkeeping requirements of Title I of the Act and the reporting requirements of Title II of the Act as to the foreign transactions but struck down the domestic reporting provisions as violative of U.S. Const. amend. IV. Plaintiff and defendant secretary of the treasury appealed the judgment of the United States District Court for the Northern District of California upholding all of Title I of the Bank Secrecy Act of 1970, 12 U.S.C.S. §§ 1730d, 1829b, 1951-1959, and upholding all of Title II of the Act except for the domestic reporting requirements.

Issue:

Was the Bank Secrecy Act of 1970 constitutional? 

Answer:

Yes.

Conclusion:

The Court affirmed the constitutionality of Title I of the Act under U.S. Const. amend. V because there existed a rational relationship between the objectives of the Act and under U.S. Const. amend. IV as it did not constitute an unreasonable search and seizure. The Court affirmed the constitutionality of Title II of the Act under U.S. Const. amends. I and V but reversed the lower court's finding that the Act was unconstitutional under U.S. Const. amend IV and held that the Act did not impose unreasonable reporting requirements on banks nor did it violate any rights of the depositor.