[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1447 Introduced in House (IH)]







110th CONGRESS
  1st Session
                                H. R. 1447

  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

                             March 9, 2007

 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 Code of Federal 
                Regulations 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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