109 HR 3909 RH: Hurricane Check Cashing Relief Act of 2005 U.S. House of Representatives 2005-12-06 text/xml EN Pursuant to Title 17 Section 105 of the United States Code, this file is not subject to copyright protection and is in the public domain.

IB Union Calendar No. 179 109th CONGRESS 1st Session H. R. 3909 [Report No. 109–326] IN THE HOUSE OF REPRESENTATIVES September 27, 2005 Ms. Ginny Brown-Waite of Florida (for herself, Ms. Hooley, Mr. Bachus, and Mr. Baker) introduced the following bill; which was referred to the Committee on Financial Services December 6, 2005 Additional sponsors: Mr. Hinojosa, Mr. Al Green of Texas, Mr. Foley, and Ms. Wasserman Schultz December 6, 2005 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on September 27, 2005 A BILL To provide emergency authority for the Federal Deposit Insurance Corporation and the National Credit Union Administration, in accordance with guidance issued by the Board of Governors of the Federal Reserve System, to guarantee checks cashed by insured depository institutions and insured credit unions for the benefit of noncustomers who are victims of certain 2005 hurricanes, and for other purposes.

1.

Short title, purpose

(a)

Short title

This Act may be cited as the Hurricane Check Cashing Relief Act of 2005. (b)

Purpose

The purpose of this Act is to reduce the suffering and financial difficulties of victims of 2005 hurricanes— (1)whose home insured depository institutions and insured credit unions, or the insured depository institution or insured credit union on which any check or share draft payable to any such victim is drawn, are closed, or whose records are otherwise inaccessible, due to certain 2005 hurricanes; (2)who lack access to operating automated teller machines for whatever reason as a result of any such hurricane, including inoperable payment networks; (3)who lack some or all of the requisite forms of identification necessary to cash their own or a third-party check or share draft; or (4)who are otherwise unable, by reason of any such hurricane, to access amounts on deposit at an insured depository institution or insured credit union.

2.

Emergency authority to guarantee checks cashed for victims of certain 2005 hurricanes

(a)

FDIC

(1)

In general

Subject to subsection (d), the Federal Deposit Insurance Corporation shall establish, in accordance with emergency guidance issued by the Board of Governors of the Federal Reserve System under subsection (d)(1), an emergency program under which an insured depository institution may obtain, subject to subsection (d)(2), a commitment from the Corporation to indemnify the insured depository institution for any loss suffered by the institution through cashing a check or share draft that— (A)is presented for payment by any individual who, as of August 25, 2005, resided in the State of Florida, Alabama, Mississippi, Louisiana, or Texas in an area in which the President, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, determined, on or after August 25, 2005, that a major disaster exists; and (B)is subsequently uncollectible,in an amount not to exceed $2,000 for each such check or share draft. (2)

Source of funds for payments

Any payments required to be made by the Corporation pursuant to a commitment under paragraph (1) to an insured depository institution shall be drawn from funds available for such purposes under subsection (c). (b)

NCUA

(1)

In general

Subject to subsection (d), the National Credit Union Administration shall establish, in accordance with emergency guidance issued by the Board under subsection (d)(1), an emergency program under which an insured credit union may obtain, subject to subsection (d)(2), a commitment from the Administration to indemnify the insured credit union for any loss suffered by the credit union through cashing a share draft or check that— (A)is presented for payment by any individual who, as of August 25, 2005, resided in the State of Florida, Alabama, Mississippi, Louisiana, or Texas in an area in which the President, pursuant to section 401 of the Robert T. Stafford Disaster Relief and Emergency Assistance Act, determined, on or after August 25, 2005, that a major disaster exists; and (B)is subsequently uncollectible,in an amount not to exceed $2,000 for each such check or share draft (2)

Source of funds for payments

Any payments required to be made by the National Credit Union Administration pursuant to a commitment under paragraph (1) to an insured credit union shall be drawn from funds available for such purposes under subsection (c). (3)

Limited extension of check cashing services

Notwithstanding any limitation in section 107(12) of the Federal Credit Union Act with regard to field of membership, an insured credit union may cash any check presented for payment by any individual described in paragraph (1)(A). (c)

Reimbursement from Federal reserve surpluses

Section 7(b) of the Federal Reserve Act (12 U.S.C. 289(b)) is amended by adding at the end the following new paragraph: (4)

Additional transfers to cover certain relief efforts resulting from hurricanes of 2005

(A)

In general

Subject to subparagraph (C), from the surplus funds of the Federal reserve banks maintained pursuant to subsection (a)(2), the Federal reserve banks shall transfer to the Board of Governors of the Federal Reserve System for transfer to the Federal Deposit Insurance Corporation and the National Credit Union Administration, such sums as are necessary to meet any payments required under subsection (a)(1) or (b)(1) of section 2 of the Hurricane Check Cashing Relief Act. In the event that the total amount of requests for indemnification received by the Federal Deposit Insurance Corporation and the National Credit Union Administration exceed the maximum amount specified under subparagraph (C), the sums transferred to the Federal Deposit Insurance Corporation and the National Credit Union Administration, respectively, shall be in proportion to the amount of payments required under subsection (a)(1) and (b)(1) of section 2 of the Hurricane Check Cashing Relief Act of 2005, respectively. (B)

Allocation by Federal Reserve Board

Of the total amount required to be paid by the Federal reserve banks, the Board of Governors of the Federal Reserve System shall determine the amount each such bank shall pay. (C)

Maximum amount

The total amount transferred under subparagraph (A) from all Federal reserve banks shall not exceed $200,000,000. (D)

Replenishment of surplus fund prohibited

No Federal reserve bank may replenish such bank’s surplus fund by the amount of any transfer by such bank under subparagraph (A).. (d)

Emergency guidance and limitations

(1)

In general

The Board, after consulting the Federal Deposit Insurance Corporation and the National Credit Union Administration, shall, upon the enactment of this Act, promptly issue appropriate guidance— (A)to carry out the purposes of this section and administer the programs established in accordance with this section; (B)to reduce the incidence of fraud and any other cause of loss to the greatest extent possible, consistent with the purpose of this Act; (C)to require insured depository institutions and insured credit unions to exercise due diligence in determining the eligibility of any check presented by any individual for indemnification under this section, including such measures as verification of Social Security numbers and other identifying information as the Board may determine to be practicable; (D)to provide insured depository institutions and insured credit unions with reasonable guidance, in light of the emergency circumstances presented by certain 2005 hurricanes, so as to meet the requirements for indemnification under this section, including the sharing of information on checks that have been presented for indemnification; and (E)notwithstanding any Federal or State law, to provide for the right of the Board of Governors of the Federal Reserve System, on behalf of the Federal reserve banks and through the Federal Deposit Insurance Corporation and the National Credit Union Administration, to recover from any insured depository institution or insured credit union the amount of any indemnification paid to such depository institution or credit union with respect to any check, to the extent of the amount so paid, if the insured depository institution or insured credit union collects on the check. (2)

Compliance with guidance condition

The emergency guidance issued under paragraph (1) shall require any insured depository institution or insured credit union seeking a commitment under subsection (a)(1) or (b)(1) to demonstrate that the institution or credit union is in compliance with the guidance in such manner as the Board determines to be appropriate and practicable. (3)

Per individual per institution limitation

No specific insured depository institution or insured credit union may be indemnified for losses in excess of $2,000 with respect to checks and share drafts presented by any one individual. (e)

Definitions

For purposes of this Act, the following definitions shall apply: (1)

Board

The term Board means the Board of Governors of the Federal Reserve System. (2)

Insured credit union

The term insured credit union has the same meaning as in section 101 of the Federal Credit Union Act. (3)

Insured depository institution

The term insured depository institution has the same meaning as in section 3 of the Federal Deposit Insurance Act. (f)

Rule of construction

No provision of this section shall be construed as affecting any right or obligation of an insured depository institution or insured credit union to take any action against any person in connection with a fraudulent check, a fraudulent negotiation of a check, or any other intentional act of a fraudulent or deceptive nature. (g)

Effective date

(1)

In general

Subject to paragraph (2), the provisions of this section shall apply to checks or share drafts presented to an insured depository institution or an insured credit union during the period beginning on August 25, 2005, and ending November 15, 2005. (2)

Limited extension

The period described in paragraph (2) may be extended once for an additional 60 days if— (A)the Board, after consulting with the Federal Deposit Insurance Corporation and the National Credit Union Administration, determines that the continuing impact of the 2005 hurricane disasters on financial intermediation between consumers and financial institutions, on payment networks, and on other forms of communication require an extension of the programs established under this section in order to continue to meet the immediate needs of victims of the disaster; and (B)notice of such determination is published in the Federal Register at least 5 days before the end of the period described in paragraph (1).

December 6, 2005 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed