I 112th CONGRESS 1st Session H. R. 1984 IN THE HOUSE OF REPRESENTATIVES May 25, 2011 Mr. Polis (for himself, Mr. Stark, Mr. Paul, and Mr. Frank of Massachusetts) introduced the following bill; which was referred to the Committee on Financial Services A BILL To amend title 31, United States Code, to allow States to certify a business as legitimate for purposes of a financial institution’s suspicious activity reporting requirements, facilitate unambiguous compliance of such businesses with State law, and provide regulatory relief for financial institutions.

1.

Short title

This Act may be cited as the Small Business Banking Improvement Act of 2011.

2.

Certification and exception

Section 5318(g) of title 31, United States Code, is amended by adding at the end the following new paragraph: (5)

Exception

(A)

In general

Notwithstanding paragraph (1), the Secretary may not require any financial institution or any director, officer, employee, or agent of any financial institution to report any suspicious transaction relevant to a possible violation of law or regulation where a person involved in such transaction is a legitimate business. (B)

Certification

(i)

In general

For purposes of this paragraph, a person is a legitimate business if the governor of each State in which such person does business has certified to the Secretary that— (I)such person is a business engaged in activities that are currently legal under State law; and (II)the State has an interest in such person receiving the exemption described under subparagraph (A). (ii)

Notice

The Secretary shall maintain a public website with a list of all persons that are a legitimate business for purposes of this paragraph. .