[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 189 Introduced in House (IH)]
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116th CONGRESS
1st Session
H. R. 189
To provide requirements for the appropriate Federal banking agencies
when requesting or ordering a depository institution to terminate a
specific customer account, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 3, 2019
Mr. Luetkemeyer introduced the following bill; which was referred to
the Committee on Financial Services
_______________________________________________________________________
A BILL
To provide requirements for the appropriate Federal banking agencies
when requesting or ordering a depository institution to terminate a
specific customer account, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Financial Institution Customer
Protection Act of 2019''.
SEC. 2. REQUIREMENTS FOR DEPOSIT ACCOUNT TERMINATION REQUESTS AND
ORDERS.
(a) Termination Requests or Orders Must Be Valid.--
(1) In general.--An appropriate Federal banking agency may
not formally or informally request or order a depository
institution to terminate a specific customer account or group
of customer accounts or to otherwise restrict or discourage a
depository institution from entering into or maintaining a
banking relationship with a specific customer or group of
customers unless--
(A) the agency has a valid reason for such request
or order; and
(B) such reason is not based solely on reputation
risk.
(2) Treatment of national security threats.--If an
appropriate Federal banking agency believes a specific customer
or group of customers is, or is acting as a conduit for, an
entity which--
(A) poses a threat to national security;
(B) is involved in terrorist financing;
(C) is an agency of the Government of Iran, North
Korea, Syria, or any country listed from time to time
on the State Sponsors of Terrorism list;
(D) is located in, or is subject to the
jurisdiction of, any country specified in subparagraph
(C); or
(E) does business with any entity described in
subparagraph (C) or (D), unless the appropriate Federal
banking agency determines that the customer or group of
customers has used due diligence to avoid doing
business with any entity described in subparagraph (C)
or (D),
such belief shall satisfy the requirement under paragraph (1).
(b) Notice Requirement.--
(1) In general.--If an appropriate Federal banking agency
formally or informally requests or orders a depository
institution to terminate a specific customer account or a group
of customer accounts, the agency shall--
(A) provide such request or order to the
institution in writing; and
(B) accompany such request or order with a written
justification for why such termination is needed,
including any specific laws or regulations the agency
believes are being violated by the customer or group of
customers, if any.
(2) Justification requirement.--A justification described
under paragraph (1)(B) may not be based solely on the
reputation risk to the depository institution.
(c) Customer Notice.--
(1) Notice required.--Except as provided under paragraph
(2) or as otherwise prohibited from being disclosed by law, if
an appropriate Federal banking agency orders a depository
institution to terminate a specific customer account or a group
of customer accounts, the depository institution shall inform
the specific customer or group of customers of the
justification for the customer's account termination described
under subsection (b).
(2) Notice prohibited.--
(A) Notice prohibited in cases of national
security.--If an appropriate Federal banking agency
requests or orders a depository institution to
terminate a specific customer account or a group of
customer accounts based on a belief that the customer
or customers pose a threat to national security, or are
otherwise described under subsection (a)(2), neither
the depository institution nor the appropriate Federal
banking agency may inform the customer or customers of
the justification for the customer's account
termination.
(B) Notice prohibited in other cases.--If an
appropriate Federal banking agency determines that the
notice required under paragraph (1) may interfere with
an authorized criminal investigation, neither the
depository institution nor the appropriate Federal
banking agency may inform the specific customer or
group of customers of the justification for the
customer's account termination.
(d) Reporting Requirement.--Each appropriate Federal banking agency
shall issue an annual report to the Congress stating--
(1) the aggregate number of specific customer accounts that
the agency requested or ordered a depository institution to
terminate during the previous year; and
(2) the legal authority on which the agency relied in
making such requests and orders and the frequency on which the
agency relied on each such authority.
(e) Definitions.--For purposes of this section:
(1) Appropriate federal banking agency.--The term
``appropriate Federal banking agency'' means--
(A) the appropriate Federal banking agency, as
defined under section 3 of the Federal Deposit
Insurance Act (12 U.S.C. 1813); and
(B) the National Credit Union Administration, in
the case of an insured credit union.
(2) Depository institution.--The term ``depository
institution'' means--
(A) a depository institution, as defined under
section 3 of the Federal Deposit Insurance Act (12
U.S.C. 1813); and
(B) an insured credit union, as defined under
section 101 of the Federal Credit Union Act (12 U.S.C.
1752).
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