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Court Decision Chips Away at Reporting Privilege

In a rare decision a California appellate court held that a bank was not protected from liability for making a crime report. In Greene v. Bank of America the bank’s branch personnel called the police when a non-customer grew irate after the bank refused to cash a check. After Greene was prosecuted and then acquitted, he sued the bank for malicious prosecution. The court held that 31 U.S.C. 5318(g), which protects banks from liability for making reports of suspicious activities, cannot be invoked because the report was not about a suspicious transaction.

The opinion may open the door to judicial second guessing about a privilege that should be considered absolute.

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