[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3003 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 3003
To provide requirements for the appropriate Federal banking agencies
when requesting or ordering a depository institution to terminate a
specific customer account, to provide for additional requirements
related to subpoenas issued under the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
December 10, 2019
Mr. Cruz (for himself, Mr. Crapo, Mr. Kennedy, Mr. Tillis, Mr. Inhofe,
Mr. Lee, Mrs. Hyde-Smith, Mr. Cornyn, Mr. Sasse, and Mr. Braun)
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To provide requirements for the appropriate Federal banking agencies
when requesting or ordering a depository institution to terminate a
specific customer account, to provide for additional requirements
related to subpoenas issued under the Financial Institutions Reform,
Recovery, and Enforcement Act of 1989, 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) Definitions.--In this section--
(1) the term ``appropriate Federal banking agency''--
(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) in the case of an insured credit union, means
the National Credit Union Administration Board;
(2) the term ``depository institution''--
(A) has the meaning given the term in section 3 of
the Federal Deposit Insurance Act (12 U.S.C. 1813); and
(B) includes an insured credit union; and
(3) the term ``insured credit union'' has the meaning given
the term in section 101 of the Federal Credit Union Act (12
U.S.C. 1752).
(b) Termination Requests or Orders Must Be Material.--
(1) In general.--The 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 material reason for the
request or order; and
(B) that reason is not based solely on reputation
risk to the depository institution.
(2) Treatment of national security threats.--The
appropriate Federal banking agency shall satisfy the
requirement under paragraph (1) if the agency believes a
specific customer or group of customers is, or is acting as a
conduit for, an entity that--
(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 sponsor of terrorism list;
(D) is located in, or is subject to the
jurisdiction of, any country described 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).
(c) Notice Requirement.--
(1) In general.--If the 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 the request or order to the institution
in writing; and
(B) include with the request or order a written
justification for why the termination is necessary,
including any specific law (including regulations), the
agency believes that the customer or group of customers
are violating.
(2) Justification requirement.--A written justification
under paragraph (1)(B) may not be based solely on the
reputation risk to the depository institution.
(d) Customer Notice.--
(1) Notice required.--Except as provided in paragraph (2),
if the 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 customer or customers of the justification for the
termination of the account or accounts under subsection
(c)(1)(B).
(2) Notice prohibited in cases of national security.--If
the 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 in subsection (b)(2), neither the
depository institution nor the appropriate Federal banking
agency may inform the customer or customers of the
justification for the termination of the account or accounts.
(e) Reporting Requirement.--Each appropriate Federal banking agency
shall issue an annual report to Congress stating--
(1) the aggregate number of specific customer accounts that
the agency requested or ordered a depository institution to
terminate during the 1-year period preceding the issuance of
the report;
(2) the legal authority on which the agency relied in
making the requests and orders described in paragraph (1); and
(3) the frequency with which the agency relied on each
authority described in paragraph (2).
SEC. 3. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND
ENFORCEMENT ACT OF 1989.
Section 951 of the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 (12 U.S.C. 1833a) is amended--
(1) in subsection (c)(2)--
(A) by inserting a comma after ``1341''; and
(B) by striking ``affecting a federally insured
financial institution'' and inserting ``against a
federally insured financial institution or by a
federally insured financial institution against an
unaffiliated third person''; and
(2) in subsection (g)--
(A) in the subsection heading, by striking
``Subpoenas'' and inserting ``Investigations''; and
(B) by striking paragraph (1)(C) and inserting the
following:
``(C) summon witnesses and require the production
of any books, papers, correspondence, memoranda, or
other records which the Attorney General deems relevant
or material to the inquiry, if the Attorney General--
``(i) requests a court order from a court
of competent jurisdiction for such actions and
offers specific and articulable facts showing
that there are reasonable grounds to believe
that the information or testimony sought is
relevant and material for conducting an
investigation under this section; or
``(ii) either personally or through
delegation no lower than the Deputy Attorney
General, issues and signs a subpoena for such
actions and such subpoena is supported by
specific and articulable facts showing that
there are reasonable grounds to believe that
the information or testimony sought is relevant
for conducting an investigation under this
section.''.
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