[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2350 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2350

 To require depository institutions to offer basic financial services 
                   accounts, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                              June 9, 1993

  Mr. Torres introduced the following bill; which was referred to the 
            Committee on Banking, Finance and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To require depository institutions to offer basic financial services 
                   accounts, 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 Services Access Act of 
1993''.

SEC. 2. BASIC FINANCIAL SERVICES ACCOUNTS REQUIRED.

    (a) In General.--Each depository institution shall offer a basic 
financial services account which, at the election of the account 
holder, may be used to obtain--
            (1) basic transaction account services; or
            (2) government check cashing account services.
    (b) Requirements for Basic Financial Services Accounts.--A basic 
financial services account shall meet the requirements of this Act. A 
basic financial services account does not meet the requirements of this 
Act if it--
            (1) requires any other relationship with the depository 
        institution, except as provided in section 7;
            (2) allows a depository institution to discriminate against 
        low-income individuals on the basis of race, color, national 
        origin, sex, age, marital status, receipt of public assistance, 
        source of income, exercise of any rights under consumer 
        protection statutes, employment status, or access to credit in 
        order to use such basic financial services account; or
            (3) requires the account holder exclusively to use direct 
        deposit services, automated teller machines, or other nonteller 
        services for such basic financial services account.
    (c) Exemption for Certain Individuals.--A depository institution is 
not required to provide a basic financial services account to any 
individual who--
            (1) has a deposit account relationship at the depository 
        institution or any other depository institution; or
            (2) has a government check cashing relationship at the 
        depository institution or any other depository institution.
    (d) Exemption From Basic Transaction Services Requirements.--Any 
depository institution that on the effective date of this Act offers 
basic transaction services that are, from an account holder's 
perspective, comparable to or more favorable than those services 
prescribed in subsection (a)(1), shall be exempt from section 4 for as 
long as it continues to offer comparable or more favorable basic 
transaction services.
    (e) Exemption From Check Cashing Services Requirements.--Any 
depository institution that on the effective date of this Act offers 
government check cashing services that, from an account holder's 
perspective, are comparable to or more favorable than those services 
prescribed in section 5, shall be exempt from subsection (a)(2) for as 
long as it continues to offer comparable or more favorable government 
check cashing services.

SEC. 3. ACCOUNT APPLICATIONS.

    (a) In General.--The Board shall develop a model application form 
for the use of depository institutions in offering a basic financial 
services account.
    (b) Minimum Requirements.--The application form developed by the 
Board, or a comparable form developed by a depository institution in 
lieu thereof, shall--
            (1) be available at all the depository institution's 
        deposit taking offices that--
                    (A) open new accounts; and
                    (B) are staffed by individuals employed by such 
                depository institutions; and
            (2) contain--
                    (A) the name, address, date of birth, handwritten 
                signature, and taxpayer identification number or other 
                identification number of the applicant; and
                    (B) other information the Board reasonably 
                determines to be necessary to provide basic transaction 
                account services and government check cashing account 
                services pursuant to this section.
    (c) Identification of Applicant.--At the time of application, an 
applicant may be required to present 2 forms of identification, 1 of 
which includes the signature of the applicant and 1 of which either 
includes a photograph or is the birth certificate of the applicant.
    (d) Other Services.--At the time of application, an applicant may 
be required by the depository institution to sign a document in which 
the applicant states whether he or she has, or has applied for, any 
other basic transaction services or government check cashing services.
    (e) Copy Provided.--The depository institution shall provide the 
applicant a copy of the completed application form demonstrating the 
fact that the application has been received and filed with the 
depository institution within 7 days after filing.
    (f) Rejection for Fraud or Intentional Material 
Misrepresentation.--
            (1) In general.--If, after review in good faith of the 
        application, a depository institution has reason to believe 
        that an applicant has committed or attempted to commit fraud 
        against a depository institution, has made an intentional 
        material misrepresentation in applying for a basic financial 
        services account, or has had an account closed pursuant to 
        section 4(a)(10), the depository institution may deny service 
        to the applicant.
            (2) Requirements.--A depository institution which denies 
        service to an applicant shall--
                    (A) provide the applicant with timely written 
                notice setting forth the reasons supporting the 
                depository institution's denial of service and the 
                procedures available to the applicant for filing a 
                complaint, as provided in section 10; and
                    (B) maintain records and files with regard to each 
                denial made pursuant to this subsection for a minimum 
                period of 2 years from the date of denial.
            (3) Form.--The Board shall develop a model form for the use 
        of depository institutions in notifying applicants of a denial 
        of service pursuant to this subsection.
    (g) Initial Waiting Period.--The depository institution may impose 
a waiting period of not more than 7 days from the date of application 
before providing an applicant with a basic transaction services account 
or a government check cashing services account.
    (h) Identification Card.--If a depository institution issues an 
identification card to approved applicants, it may assess a reasonable, 
cost-based charge for replacement of a lost or stolen card.

SEC. 4. BASIC TRANSACTION SERVICES ACCOUNT REQUIREMENTS.

    (a) In General.--An account is a basic transaction services account 
for the purpose of section 2 if it is a transaction account that--
            (1) is available to account holders who maintain an average 
        balance of not more than $750 during each monthly period;
            (2) does not require a minimum initial deposit of more than 
        $25 or minimum balance requirement of more than $1;
            (3) does not provide for the imposition of fees other 
        than--
                    (A) a monthly maintenance fee or service charge 
                that does not exceed the real, direct, and demonstrable 
                costs of providing the account (including fraud losses 
                and deposit insurance premiums), as certified by the 
                depository institution, plus a modest profit not to 
                exceed 10 percent of such costs;
                    (B) a reasonable, cost-based fee for check 
                printing;
                    (C) a reasonable, cost-based fee for processing 
                checks returned for lack of sufficient funds; and
                    (D) a reasonable, cost-based fee for transactions 
                in excess of the minimum number of allowable 
                transactions described in paragraph (5);
            (4) permits checks, share drafts, electronic, or other 
        debit instruments to be drawn on the account for purposes of 
        making payments or other transfers to third parties;
            (5) permits at least 10 withdrawals per month, including 
        withdrawals described in paragraph (4), whether by check, share 
        draft, in person, proprietary automatic teller machines, or 
        other means;
            (6) provides the account holder with--
                    (A) a detailed periodic statement listing all 
                transactions for the period involved; or
                    (B) a passbook in which the depository institution 
                enters all transactions for such account;
            (7) does not require the depository institution to pay 
        interest on deposited funds;
            (8) at the election of the account holder, allows regularly 
        recurring payments to the account holder to be made by a pay or 
        directly to the depository institution for direct deposit into 
        the account of the account holder, if the depository 
        institution offers direct deposit services to account holders;
            (9) allows the depository institution--
                    (A) to market direct deposit services; and
                    (B) to offer cost-based discounts to account 
                holders who elect to rely wholly or partially on direct 
                deposit or automatic teller machines in conjunction 
                with the account; and
            (10) is subject to closure upon notice to the account 
        holder due to--
                    (A) overdrafts, returned checks, or rejected 
                electronic debits with respect to an account on 3 
                distinct occasions within any 6-month period;
                    (B) fraudulent activity involving the account of 
                such account holder; or
                    (C) failure by the account holder to abide by the 
                terms of the account, as provided in paragraphs (1) 
                through (3) of subsection (a).
    (b) Cost Analysis.--For the purpose of subsection (a)(3)(A), the 
depository institution shall base the monthly maintenance fee or 
service charge either on its own study of costs (actual time and actual 
net processing costs) or on functional cost analysis (actual time and 
actual net processing cost) studies of various types of depository 
institutions performed by the Board.

SEC. 5. GOVERNMENT CHECK CASHING SERVICES ACCOUNT REQUIREMENTS.

    (a) In General.--An account is a government check cashing services 
account for the purpose of section 2 if it--
            (1) Notwithstanding the Expedited Funds Availability Act 
        (12 U.S.C. 4001 et seq.), permits the account holder 
        immediately to cash government checks in amounts of as much as 
        $1,500, if--
                    (A) the account holder presents the check and is 
                the person to whom the check has been issued; and
                    (B) the individual has applied to the depository 
                institution for government check cashing services under 
                section 3;
            (2) does not require the account holder to pay a monthly 
        service charge or maintenance fee for check cashing services;
            (3) does not require the account holder to pay a fee for 
        the establishment of a check cashing account;
            (4) does not have check cashing fees that exceed the real, 
        direct, and demonstrable costs of providing check cashing 
        account services (including fraud losses), as certified by the 
        depository institution, plus a modest profit not to exceed 10 
        percent of such costs;
            (5) allows the account holder to designate at least 3 
        offices of the depository institution at which to cash 
        government checks, if such offices--
                    (A) take deposits;
                    (B) open new accounts; and
                    (C) are staffed by individuals employed by such 
                depository institution;
        unless the depository institution has fewer than 3 offices 
        which meet the requirements of subparagraphs (A), (B), and (C); 
        and
            (6) permits the depository institution to require, prior to 
        cashing any government check, the account holder to present--
                    (A) any identification described in section 3(c) or 
                section 3(h); and
                    (B) the account holder's government check cashing 
                services account number.
    (b) Cost Analysis.--For the purpose of subsection (a)(4), the 
depository institution shall base such check cashing fees either on its 
own study of costs (actual time and actual net processing cost) or on 
functional analysis (actual time and actual net processing cost) 
studies of various types of depository institutions performed by the 
Board.

SEC. 6. INFORMATION ON ACCOUNTS.

    (a) Display.--
            (1) In general.--A depository institution shall 
        conspicuously display in its lobby and other public areas of 
        the institution brochures, pamphlets, or other written 
        information that inform account holders and potential account 
        holders that basic financial services accounts are available.
            (2) Information.--Such brochures, pamphlets, or other 
        written information shall--
                    (A) clearly explain the material features and 
                limitations of basic transaction and government check 
                cashing services, including the costs of utilizing 
                basic transaction account services;
                    (B) state that further information concerning such 
                services is available from the depository institution 
                upon request; and
                    (C) include information concerning an account 
                holder's right to complain regarding noncompliance with 
                this Act.
            (3) Availability.--A depository institution shall provide 
        the information described in paragraph (2) to any individual 
        upon request.
    (b) Public Service Announcements and Multi Language Notices.--For 
the purpose of obtaining the widest possible dissemination of 
information concerning basic banking accounts available pursuant to 
this Act, particularly with respect to individuals whose ability to 
read the English language is limited, the Board--
            (1) shall prepare public service announcements describing 
        the basic banking accounts available pursuant to this Act and 
        make such announcements available free of charge to broadcast 
        or electronic media;
            (2) may prescribe regulations requiring depository 
        institutions to include a brief description of the basic 
        banking accounts available at such institution in any 
        advertisement by such institution in any broadcast or 
        electronic medium; and
            (3) shall prescribe regulations which require that, in the 
        case of any branch or office (of a depository institution) 
        which is located in an area in which more than an insignificant 
        number of the residents have a limited English proficiency, the 
        information required to be made available under subsection (a) 
        by such branch or office be written in any language which is 
        predominant among such residents (in addition to English).

SEC. 7. SPECIAL RULES FOR CREDIT UNIONS.

    (a) Basic Transaction Services.--Any credit union which, in the 
ordinary course of business, offers share draft accounts to its own 
members shall provide basic transaction services pursuant to this Act 
to any individual who is or becomes a member of such credit union if 
the individual complies with the requirements of this Act.
    (b) Government Check Cashing Services.--Any credit union which, in 
the ordinary course of business, cashes share drafts or government 
checks for its own members shall provide government check cashing 
services pursuant to this Act to any individual who is or becomes a 
member of such credit union if the individual complies with the 
requirements of this Act.

SEC. 8. SPECIAL RULES FOR CERTAIN DEPOSITORY INSTITUTIONS.

    (a) Institutions That Do Not Offer Transaction Accounts.--A 
depository institution, other than a credit union, which does not, in 
the ordinary course of business, offer transaction accounts to the 
general public, is not required to provide basic transaction services.
    (b) Institutions That Do Not Cash Checks.--A depository institution 
which does not, in the ordinary course of business, cash checks is not 
required to provide government check cashing services.

SEC. 9. PREVENTING FRAUD LOSSES.

    (a) In General.--The Board may, upon petition by any individual 
depository institution, suspend, by regulation or order, any government 
check cashing services account requirement under this Act if the Board 
determines that the depository institution is experiencing an 
unacceptable level of losses due to check-related fraud in providing 
such account services.
    (b) Suspension of Requirements.--The Board may, by regulation or 
order, suspend any government check cashing services account 
requirement imposed by this Act for any class of checks if the Board 
determines that--
            (1) depository institutions are experiencing an 
        unacceptable level of losses due to check-related fraud with 
        respect to such class of checks; or
            (2) there is reasonable cause to believe that such class of 
        checks is being used in a scheme to defraud.
    (c) Report.--Within 10 days of issuing any order or prescribing any 
regulation under subsections (a) and (b) of this section, the Board 
shall submit a report to the Committee on Banking, Finance and Urban 
Affairs of the House of Representatives and the Committee on Banking, 
Housing, and Urban Affairs of the Senate, explaining the reason for the 
order or regulation and the evidence considered in making the 
determination to issue an order or prescribe a regulation.
    (d) Exemptions.--This Act does not apply with respect to any 
government check presented for cashing to a depository institution if 
the depository institution has reason to believe that--
            (1) such check is fraudulent, is being fraudulently 
        presented, or has been altered or forged;
            (2) the individual presenting the check is misrepresenting 
        or has misrepresented his or her identity;
            (3) any form of identification that is presented in 
        connection with cashing such check has been altered or forged; 
        or
            (4) the check will not be honored by the check-issuing 
        governmental authority.
For purposes of this subsection, a reasonable belief requires the 
existence of facts which would give rise to a well-grounded belief in 
the mind of a reasonable person.

SEC. 10. ADMINISTRATIVE ENFORCEMENT.

    (a) In General.--Compliance with the requirements imposed under 
this Act shall be enforced under--
            (1) section 8 of the Federal Deposit Insurance Act--
                    (A) by the Office of the Comptroller of the 
                Currency with respect to national banks, and Federal 
                branches and Federal agencies of foreign banks;
                    (B) by the Board of Governors of the Federal 
                Reserve System with respect to member banks of the 
                Federal Reserve System (other than national banks), and 
                offices, branches, and agencies of foreign banks 
                located in the United States (other than Federal 
                branches, Federal agencies, and insured State branches 
                of foreign banks);
                    (C) by the Board of Directors of the Federal 
                Deposit Insurance Corporation with respect to banks the 
                deposits of which are insured by the Federal Deposit 
                Insurance Corporation (other than members of the 
                Federal Reserve System) and insured State branches of 
                foreign banks; and
                    (D) by the Office of Thrift Supervision with 
                respect to Federal savings associations and Federal 
                savings banks; and
            (2) section 206 of the Federal Credit Union Act, by the 
        National Credit Union Administration Board, with respect to any 
        insured credit union.
The terms used in paragraph (1) that are not defined in this Act or 
otherwise defined in section 3(s) of the Federal Deposit Insurance Act 
(12 U.S.C. 1813(s)) shall have the meaning given to them in section 
1(b) of the International Banking Act of 1978 (12 U.S.C. 3101).
    (b) Additional Enforcement Powers.--
            (1) Violation of this subtitle treated as violation of 
        other acts.--For purposes of the exercise by the appropriate 
        Federal banking agency of any such agency's powers under any 
        Act referred to in subsection (a), a violation of a requirement 
        imposed under this Act is deemed to be a violation of a 
        requirement imposed under that Act.
            (2) Enforcement authority under other acts.--In addition to 
        the appropriate Federal banking agency's powers under any 
        provision of law referred to in subsection (a), each such 
        agency may exercise, for purposes of enforcing this Act, any 
        other authority conferred on such agency by any other law.
    (c) Complaints by Individuals.--
            (1) In general.--The Board shall develop a complaint form 
        for individuals to use to report possible violations of this 
        Act. Each appropriate Federal banking agency that receives a 
        complaint shall conduct an investigation as such agency deems 
        necessary. If such complaint is verified by an investigation, 
        the agency shall carry out proper enforcement actions according 
        to the authority conferred by this subtitle. The agency shall 
        provide the results of such investigation and any enforcement 
        actions in writing to the complainant and the depository 
        institution that was investigated.
            (2) Time limit on filing of certain complaints.--An agency 
        shall not consider any complaint that alleges the denial of an 
        application for a basic financial services account in violation 
        of this Act, if the complaint is filed more than 1 year after 
        the institution's denial of the application.

SEC. 11. CIVIL LIABILITY.

    (a) In General.--Except as otherwise provided in this section, any 
depository institution that fails to comply with any requirement 
imposed under this Act with respect to any person is liable to such 
person in an amount equal to the sum of--
            (1) any actual damage sustained by such person as a result 
        of the failure;
            (2)(A) in the case of an individual action, such amount as 
        the court may allow, except that the liability under this 
        subparagraph shall not be less than $100 nor greater than 
        $1,000; or
            (B) in the case of a class action, such amount as the court 
        may allow, except that as to each member of the class no 
        minimum recovery shall be applicable, and the total recovery 
        under this subparagraph in any class action or series of class 
        actions arising out of the same failure to comply by the same 
        depository institution shall not be more than the lesser of 
        $500,000 or 1 percent of the net worth of the depository 
        institution; and
            (3) in the case of any successful action to enforce the 
        foregoing liability, the costs of the action, together with a 
        reasonable attorney's fee as determined by the court.
In determining the amount of award in any class action, the court shall 
consider, among other relevant factors, the amount of any actual 
damages awarded, the frequency and persistence of failures of 
compliance by the depository institution, the resources of the 
depository institution, the number of persons adversely affected, and 
the extent to which the depository institution's failure of compliance 
was intentional.
    (b) Limitation on Liability.--A depository institution may not be 
held liable in any action brought under this section for a violation of 
this Act if the depository institution shows by a preponderance of 
evidence that the violation was not intentional and resulted from a 
bona fide error notwithstanding the maintenance of procedures 
reasonably adapted to avoid any such error. Examples of a bona fide 
error include clerical, calculation, computer malfunction and 
programing, and printing errors, except that an error of legal judgment 
with respect to a person's obligations under this Act is not a bona 
fide error.
    (c) Jurisdiction.--Any action under this section may be brought in 
any United States district court, or in any other court of competent 
jurisdiction, within one year after the date of the occurrence of the 
violation.
    (d) Limitation of Applicability.--No provision of this section 
imposing any liability shall apply to any act done or omitted in good 
faith in conformity with any rule, regulation, or interpretation 
thereof by the Board or in conformity with any interpretation or 
approval by an official or employee of the Federal Reserve System duly 
authorized by the Board to issue such interpretations or approvals 
under such procedures as the Board may prescribe therefore, 
notwithstanding that after such act or omission has occurred, such 
rule, regulation, interpretation, or approval is amended, rescinded, or 
determined by judicial or other authority to be invalid for any reason.

SEC. 12. DEFINITIONS.

    For the purposes of this Act--
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' has the same meaning 
        given such term by section 3 of the Federal Deposit Insurance 
        Act.
            (2) Board.--The term ``Board'' means the Board of Governors 
        of the Federal Reserve System.
            (3) Depository institution.--The term ``depository 
        institution'' means any federally insured depository 
        institution described in clauses (i) through (vi) of section 
        19(b)(1)(A) of the Federal Reserve Act.
            (4) Government check.--
                    (A) In general.--The term ``government check'' 
                means any check that is issued by--
                            (i) the United States or any agency of the 
                        United States;
                            (ii) any State or any agency of any State, 
                        and that is presented for cashing purposes 
                        within the State in which the check was issued; 
                        or
                            (iii) any unit of local government or any 
                        agency of any unit of local government, 
                        including local government public assistance 
                        payments, and that is presented for cashing 
                        purposes within the unit of local government in 
                        which the check was issued.
                    (B) Exceptions.--The term ``government check'' does 
                not include--
                            (i) State-issued payment warrants; or
                            (ii) checks issued by local government 
                        special purpose districts or units.
            (5) Government check cashing relationship.--The term 
        ``government check cashing relationship'' means an account 
        relationship between an individual and a depository institution 
        under which a government check cashing services account is 
        provided pursuant to section 5 of this Act.
            (6) State.--The term ``State'' has the meaning given to 
        such term in section 3(a) of the Federal Deposit Insurance Act.
            (7) Transaction account.--The term ``transaction account'' 
        has the meaning given such term by section 19(b)(1)(C) of the 
        Federal Reserve Act.

SEC. 13. EFFECTIVE DATE.

    This Act shall become effective 12 months after the date of 
enactment of this Act.

                                 <all>

HR 2350 IH----2