[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6688 Introduced in House (IH)]







110th CONGRESS
  2d Session
                                H. R. 6688

   To amend section 5313 of title 31, United States Code, to reform 
  certain requirements for reporting cash transactions, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 31, 2008

 Mr. Foster (for himself, Mr. Frank of Massachusetts, and Mr. Moore of 
   Kansas) introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
   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 2008''.

SEC. 2. FINDINGS.

     The Congress finds as follows:
            (1) When it is possible to reduce the regulatory burden on 
        depository institutions associated with reporting requirements 
        under chapter 53 of title 31, United States Code, while at the 
        same time maintaining the utility of such reports to law 
        enforcement efforts, it is appropriate to do so.
            (2) In February 2008, the Comptroller General issued a 
        report titled ``Bank Secrecy Act: Increased Use of Exemption 
        Provisions Could Reduce Currency Transaction Reporting While 
        Maintaining Usefulness to Law Enforcement Efforts'' (GAO-08-
        355).
            (3) The Comptroller General finds that since transactions 
        of exempt customers are of little or no value to law 
        enforcement efforts, efforts made to increase the use of such 
        exemptions by depository institutions could reduce the 
        regulatory burden associated with filing unnecessary cash 
        transaction reports and the government's costs to process them, 
        while maintaining the utility of such reports to law 
        enforcement efforts.
            (4) The Comptroller General finds that the requirement that 
        depository institutions file biennial renewals for Phase II 
        customer exemptions duplicates the required annual review of 
        such exemptions and discourages the use of some exemptions.
            (5) The Comptroller General finds that eliminating the 
        requirement that depository institutions file biennial renewals 
        for Phase II customer exemptions could increase the use of such 
        exemptions and reduce the burden associated with filing 
        unnecessary cash transaction reports.
            (6) The Comptroller General recommends eliminating the 
        requirement that depository institutions biennially renew Phase 
        II exemptions.
            (7) The Comptroller General finds that the cash 
        transactions of government entities and depository institutions 
        are likely of little or no use to law enforcement efforts and 
        that cash transaction reports related to these entities are 
        unnecessary.
            (8) The Comptroller General finds that, although the 
        amendments made to chapter 53 of title 31, United States Code, 
        by the Money Laundering Suppression Act of 1994 required the 
        Secretary of the Treasury to exempt depository institutions 
        from filing cash transaction reports on the transactions of 
        government entities and depository institutions and did not 
        explicitly require the filing of exemption forms or annual 
        review of such information with respect to the exempt entities 
        to effectuate any such exemption, the regulations prescribed by 
        the Secretary nonetheless require depository institutions to 
        file such exemption forms and annual reviews.
            (9) The Comptroller General finds that the requirement that 
        depository institutions file forms to exempt government 
        entities and depository institutions, and conduct annual 
        reviews of related information, discourages the use of such 
        exemptions and creates cash transaction reports that are of 
        little or no value to law enforcement efforts.
            (10) The Comptroller General recommends eliminating the 
        requirement that depository institutions file exemption forms 
        and annually review the supporting information for government 
        entities and depository institutions.
            (11) The Comptroller General finds that requiring 
        depository institutions to wait 12 months before exempting 
        certain customers with large numbers of cash transactions may 
        needlessly create cash transaction reports that are not highly 
        useful to law enforcement efforts.
            (12) The Comptroller General finds that allowing depository 
        institutions to exempt clients with frequent cash transactions 
        within a time period of less than a year could avoid the filing 
        of unnecessary cash transaction reports.
            (13) The Comptroller General recommends considering a 
        change in requirements to allow depository institutions to 
        exempt otherwise-eligible customers with frequent large cash 
        transactions within a period of time shorter than 12 months.

SEC. 3. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR SEASONED 
              CUSTOMERS.

    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 2008, the Secretary of the Treasury shall 
        prescribe regulations that exempt any depository institution 
        from filing a report pursuant to this section after the 
        effective date of such regulations in connection with 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 CFR 103.22(d)(6)(vii), 
                as in effect on January 4, 2007), or is registered as 
                and eligible to do business within the United States or 
                a State; and
                    ``(B) has maintained a deposit account with the 
                depository institution for at least 2 months, or has 
                engaged, using such an 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.''.

SEC. 4. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR GOVERNMENT 
              ENTITIES, DEPOSITORY INSTITUTIONS, AND CERTAIN OTHER 
              FINANCIAL INSTITUTIONS.

    (a) In General.--Section 5313(d) of title 31, United States Code, 
is amended to read as follows:
    ``(d) Mandatory Exemptions From Reporting Requirements.--
            ``(1) In general.--Upon enactment of the Seasoned Customer 
        CTR Exemption Act of 2008, the Secretary of the Treasury shall 
        exempt, pursuant to section 5318(a)(6), a depository 
        institution from the reporting requirements of subsection (a), 
        without requiring the depository institution to file a notice 
        of designation of exemption or to annually review the 
        information supporting the exemption, with respect to 
        transactions between the depository institution and the 
        following categories of entities:
                    ``(A) Another depository institution.
                    ``(B) A department or agency of the United States, 
                any State, or any political subdivision of any State.
                    ``(C) Any entity established under the laws of the 
                United States, any State, or any political subdivision 
                of any State, or under an interstate compact between 2 
                or more States, which exercises governmental authority 
                on behalf of the United States, the State, or the 
                political subdivision.
                    ``(D) Any entity, other than a bank, whose common 
                stock or analogous equity interests are listed on the 
                New York Stock Exchange or the American Stock Exchange 
                or whose common stock or analogous equity interests 
                have been designated as a Nasdaq National Market 
                Security listed on the Nasdaq Stock Market (except 
                stocks or interests listed under the separate `Nasdaq 
                Small-Cap Issues' heading), except that, for purposes 
                of this subparagraph, a person that is a financial 
                institution, other than a bank, is an exempt person 
                only to the extent of such institution's domestic 
                operations.
                    ``(E) Any subsidiary, other than a bank, of any 
                entity described in subparagraph (D) that is organized 
                under the laws of the United States or of any State and 
                at least 51 percent of whose common stock or analogous 
                equity interest is owned by the listed entity, except 
                that, for purposes of this subparagraph, a person that 
                is a financial institution, other than a bank, is an 
                exempt person only to the extent of such institution's 
                domestic operations.
                    ``(F) Any business or category of business the 
                reports on which have little or no value for law 
                enforcement purposes.
            ``(2) Notice of exemption.--The Secretary of the Treasury 
        shall publish in the Federal Register at such times as the 
        Secretary determines to be appropriate (but not less frequently 
        than once each year) a list of all the entities whose 
        transactions with a depository institution are exempt under 
        this subsection from the reporting requirements of subsection 
        (a).''.
    (b) Election To Report Notwithstanding Exemption.--Section 5313(f) 
of title 31, United States Code, is amended by adding at the end the 
following new paragraph:
            ``(3) Depository institution elections.--A depository 
        institution may elect to report a transaction that would 
        otherwise qualify for an exemption under subsection (d) or (e), 
        and a depository institution that makes such an election shall 
        not be subject to any penalty, liability, enforcement remedy, 
        or supervisory criticism for such reporting.''.
    (c) Technical and Conforming Amendment.--The heading for subsection 
(f) of section 5313 of title, United States Code, is amended by 
striking ``Mandatory and Discretionary''.
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