[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6366 Introduced in House (IH)]
109th CONGRESS
2d Session
H. R. 6366
To amend sections 5313 and 5318 of title 31, United States Code, to
reform certain requirements for reporting cash transactions, and for
other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
December 5, 2006
Mr. Jones of North Carolina introduced the following bill; which was
referred to the Committee on Financial Services
_______________________________________________________________________
A BILL
To amend sections 5313 and 5318 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 ``CTR Modernization Act''.
SEC. 2. PURPOSES.
The purposes of this Act are as follows:
(1) To improve the quality and usefulness of currency
transaction reports in criminal, tax, and regulatory
investigations or proceedings.
(2) To eliminate filing currency transaction reports
related to many innocent, infrequent, or idiosyncratic deposit
activities.
(3) To further focus anti-money laundering investigations
and prosecutions by reducing the number of spurious,
duplicative, and innocent currency transaction reports and
increasing the usefulness of suspicious activity reports.
(4) To maintain the high degree of usefulness of currency
transaction reports and adjust for inflation and current
financial practices the threshold for currency transaction
reports to a level consistent with the amount established
pursuant to Public Law 91-508 upon the enactment of such Public
Law in 1970.
(5) To increase the usefulness of data collected through
currency transaction reports and suspicious activity reports
and for other purposes.
SEC. 3. MODIFICATION OF CURRENCY TRANSACTION REPORTING THRESHOLD.
(a) Threshold.--
(1) Nondepository institutions.--The 1st sentence of
section 5313(a) of title 31, United States Code, is amended by
inserting ``, other than a depository institution,'' after
``domestic financial institution''.
(2) Depository institutions.--Subsection (a) of section
5313 of title 31, United States Code, is amended by inserting
after the 1st sentence (as amended by paragraph (1) of this
subsection) the following new sentence: ``When a depository
institution is involved 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), in an amount, denomination, or amount and
denomination of not less than $30,000 and under circumstances
the Secretary prescribes by regulation, the depository
institution and any other participant in the transaction the
Secretary may prescribe shall file a report on the transaction
at the time and in the way the Secretary prescribes.''.
(b) Regulation.--After the end of the 270-day period beginning on
the date of the enactment of the CTR Modernization Act, the Secretary
of the Treasury shall not require a depository institution to file a
currency transaction report when the transaction involves the transfer
of currency of an amount and denomination of less than $30,000.
(c) Technical and Conforming Amendment.--Subsection (c) of section
5312 of title 31, United States Code, is amended by adding at the end
the following new paragraph:
``(2) Depository institution.--The term `depository
institution' means any insured depository institution (as
defined in section 3 of the Federal Deposit Insurance Act) and
any insured credit union (as defined in section 101(7) of the
Federal Credit Union Act).''.
SEC. 4. 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 5-year period
beginning on the date of the enactment of the CTR Modernization
Act and at least every 5 years after the expiration of such
period, the secretary of the treasury shall--
``(A) solicit and review public comments about the
appropriateness, relevance, and utility of the then-
current threshold amount or denomination established by
the Secretary;
``(B) 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
``(C) adjust such amount, at such time and in such
manner as the Secretary considers appropriate but in no
case later than 365 days following the expiration of
the public comment period, for any inflation that the
Secretary of the Treasury determines has occurred since
the date any such amount was established or last
adjusted, except that the Secretary of the Treasury
shall not reduce such amount to an amount and
denomination of less than $30,000.
``(2) Report.--Before the end of the 365-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.''.
SEC. 5. MODIFICATION OF EXEMPTION PROCESS.
(a) Seasoned Customer Exemption.--Subsection (e) of section 5313 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 CTR Modernization
Act, 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.''.
(b) 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 the
Congress as to any legislative action with respect to such provision as
the Secretary may determine to be appropriate.
SEC. 6. IDENTIFYING SUSPICIOUS ACTIVITY.
Subsection 5318(g) of title 31, United States Code, is amended by
adding at the end the following new paragraph:
``(5) Guidance on when to file a report.--Before the end of
the 270-day period beginning on the date of the enactment of
the CTR Modernization Act, the Secretary of the Treasury shall
prescribe regulations that provide guidance on examples of
transactions that--
``(A) involved funds derived from illegal
activities;
``(B) were designed to evade any requirements under
this subchapter, chapter 2 of title I of Public Law 91-
508, or the Internal Revenue Code of 1986; and
``(C) have no business or apparent lawful
purpose.''.
SEC. 7. PROVIDING GENERAL INFORMATION REGARDING SUSPICIOUS ACTIVITY
REPORT REQUIREMENTS.
Subsection 5318(g) of title 31, United States Code, is amended by
inserting after paragraph (5) (as added by section 6 of this Act) the
following new paragraph:
``(6) General notification to customers.--
``(A) In general.--Before the end of the 270-day
period beginning on the date of the enactment of the
CTR Modernization Act, the Secretary of the Treasury
shall prescribe regulations that create a list of
information that may be disclosed to customers prior to
the reporting of suspicious activity.
``(B) Rule of construction.--Subparagraph (A) of
this paragraph shall not be construed as creating any
immunity from the notification prohibition under
paragraph (2).''.
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