[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5341 Referred in Senate (RFS)]
109th CONGRESS
2d Session
H. R. 5341
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 28, 2006
Received; read twice and referred to the Committee on Banking, Housing,
and Urban Affairs
_______________________________________________________________________
AN ACT
To amend section 5313 of title 31, United States Code, to reform
certain requirements for reporting cash transactions, 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 ``Seasoned Customer CTR Exemption Act
of 2006''.
SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR SEASONED
CUSTOMERS.
(a) Findings.--The Congress finds as follows:
(1) The completion of and filing of currency transaction
reports under section 5313 of title 31, United States Code,
poses a compliance burden on the financial industry.
(2) Due to the nature of the transactions or the persons
and entities conducting such transactions, some reports as
currently filed may not be relevant to the detection,
deterrence, or investigation of financial crimes, including
money laundering and the financing of terrorism.
(3) However, the data contained in such reports can provide
valuable context for the analysis of other data derived
pursuant to subchapter II of chapter 53 of title 31, United
States Code, as well as investigative data, which provide
invaluable and indispensable information supporting efforts to
combat money laundering and other financial crimes.
(4) An appropriate exemption process from the reporting
requirements for certain currency transactions that are of
little or no value to ongoing efforts of law enforcement
agencies, financial regulatory agencies, and the financial
services industry to investigate, detect, or deter financial
crimes would continue to fulfill the compelling need to produce
and provide meaningful information to policy-makers, financial
regulators, law enforcement, and intelligence agencies, while
potentially lowering the compliance burden placed on financial
institutions by the need to file such reports.
(5) The Secretary of the Treasury has by regulation, and in
accordance with section 5313 of title 31, United States Code,
implemented a process by which institutions may seek exemptions
from filing certain currency transaction reports based on
appropriate circumstances; however, the financial industry has
not taken full advantage of these provisions and has contended
that they are unduly burdensome.
(6) The act of providing notice to the Secretary of the
Treasury of designations of exemption--
(A) provides meaningful information to law
enforcement officials on exempt customers and enables
law enforcement to obtain account information through
appropriate legal process; and
(B) complements other sections of title 31, United
States Code, whereby law enforcement can locate
financial institutions with relevant records relating
to a person of investigative interest, such as
information requests made pursuant to regulations
implementing section 314(a) of the USA PATRIOT Act of
2001.
(7) A designation of exemption has no effect on
requirements for depository institutions to apply the full
range of anti-money laundering controls required under
subchapter II of chapter 53 of title 31, United States Code,
and related provisions of law, including the requirement to
apply the customer identification program pursuant to section
5326 of such title, and the requirement to identify, monitor,
and, if appropriate, report suspicious activity in accordance
with section 5318(g) of such title.
(8) The Federal banking agencies and the Financial Crimes
Enforcement Network have recently provided guidance through the
Federal Financial Institutions Examination Council Bank Secrecy
Act/Anti-Money Laundering Examination Manual on applying
appropriate levels of due diligence and identifying suspicious
activity by the types of cash-intensive businesses that
generally will be subject to exemption.
(b) Seasoned Customer Exemption.--Section 5313(e) of title 31,
United States Code, is amended to read as follows:
``(e) Qualified Customer Exemption.--
``(1) In general.--Before the end of the 270-day period
beginning on the date of the enactment of the Seasoned Customer
CTR Exemption Act of 2006, the Secretary of the Treasury shall
prescribe regulations that exempt any depository institution
from filing a report pursuant to this section in a transaction
for the payment, receipt, or transfer of United States coins or
currency (or other monetary instruments the Secretary of the
Treasury prescribes) with a qualified customer of the
depository institution.
``(2) Qualified customer defined.--For purposes of this
section, the term `qualified customer', with respect to a
depository institution, has such meaning as the Secretary of
the Treasury shall prescribe, which shall include any person
that--
``(A) is incorporated or organized under the laws
of the United States or any State, including a sole
proprietorship (as defined in 31 C.F.R.
103.22(d)(6)(vii), as in effect on May 10, 2006), or is
registered as and eligible to do business within the
United States or a State;
``(B) has maintained a deposit account with the
depository institution for at least 12 months; and
``(C) has engaged, using such account, in multiple
currency transactions that are subject to the reporting
requirements of subsection (a).
``(3) Regulations.--
``(A) In general.--The Secretary of the Treasury
shall prescribe regulations requiring a depository
institution to file a 1-time notice of designation of
exemption for each qualified customer of the depository
institution.
``(B) Form and content of exemption notice.--The
Secretary shall by regulation prescribe the form,
manner, content, and timing of the qualified customer
exemption notice and such notice shall include
information sufficient to identify the qualified
customer and the accounts of the customer.
``(C) Authority of secretary.--
``(i) In general.--The Secretary may
suspend, reject, or revoke any qualified
customer exemption notice, in accordance with
criteria prescribed by the Secretary by
regulation.
``(ii) Conditions.--The Secretary may
establish conditions, in accordance with
criteria prescribed by regulation, under which
exempt qualified customers of an insured
depository institution that is merged with or
acquired by another insured depository
institution will continue to be treated as
designated exempt qualified customers of the
surviving or acquiring institution.''.
(c) 3-Year Review and Report.--Before the end of the 3-year period
beginning on the date of the enactment of this Act, the Secretary of
the Treasury, in consultation with the Attorney General, the Secretary
of Homeland Security, the Federal banking agencies, the banking
industry, and such other persons as the Secretary deems appropriate,
shall evaluate the operations and effect of the provisions of the
amendment made by subsection (a) and make recommendations to Congress
as to any legislative action with respect to such provision as the
Secretary may determine to be appropriate.
SEC. 3. PERIODIC REVIEW OF REPORTING THRESHOLD AND ADJUSTMENT FOR
INFLATION.
Section 5318 of title 31, United States Code, is amended by adding
at the end the following new subsection:
``(o) Periodic Review of Reporting Threshold and Adjustment for
Inflation.--
``(1) In general.--Before the end of the 90-day period
beginning on the date of the enactment of the Seasoned Customer
CTR Exemption Act of 2006 and at least every 5 years after the
end of such period, the Secretary of the Treasury shall--
``(A) review the continuing appropriateness,
relevance, and utility of each threshold amount or
denomination established by the Secretary, in the
Secretary's discretion, for any report required by the
Secretary under this subchapter; and
``(B) adjust each such amount, at such time and in
such manner as the Secretary considers appropriate, for
any inflation that the Secretary determines has
occurred since the date any such amount was established
or last adjusted, as the case may be.
``(2) Report.--Before the end of the 60-day period
beginning upon the completion of any review by the Secretary of
the Treasury under paragraph (1), the Secretary shall submit a
report to the Congress containing the findings and conclusions
of the Secretary in connection with such review, together with
an explanation for any adjustment, or lack of adjustment, of
any threshold amount or denomination by the Secretary as a
result of such review, including the adjustment for
inflation.''.
Passed the House of Representatives June 27, 2006.
Attest:
KAREN L. HAAS,
Clerk.