[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[H.R. 766 Engrossed in House (EH)]

<DOC>
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
114th CONGRESS
  2d Session
                                H. R. 766

_______________________________________________________________________

                                 AN ACT


 
 To provide requirements for the appropriate Federal banking agencies 
  when requesting or ordering a depository institution to terminate a 
   specific customer account, to provide for additional requirements 
 related to subpoenas issued under the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989, 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 ``Financial Institution Customer 
Protection Act of 2016''.

SEC. 2. REQUIREMENTS FOR DEPOSIT ACCOUNT TERMINATION REQUESTS AND 
              ORDERS.

    (a) Termination Requests or Orders Must Be Material.--
            (1) In general.--An appropriate Federal banking agency may 
        not formally or informally request or order a depository 
        institution to terminate a specific customer account or group 
        of customer accounts or to otherwise restrict or discourage a 
        depository institution from entering into or maintaining a 
        banking relationship with a specific customer or group of 
        customers unless--
                    (A) the agency has a material reason for such 
                request or order; and
                    (B) such reason is not based solely on reputation 
                risk.
            (2) Treatment of national security threats.--If an 
        appropriate Federal banking agency believes a specific customer 
        or group of customers is, or is acting as a conduit for, an 
        entity which--
                    (A) poses a threat to national security;
                    (B) is involved in terrorist financing;
                    (C) is an agency of the government of Iran, North 
                Korea, Syria, or any country listed from time to time 
                on the State Sponsors of Terrorism list;
                    (D) is located in, or is subject to the 
                jurisdiction of, any country specified in subparagraph 
                (C); or
                    (E) does business with any entity described in 
                subparagraph (C) or (D), unless the appropriate Federal 
                banking agency determines that the customer or group of 
                customers has used due diligence to avoid doing 
                business with any entity described in subparagraph (C) 
                or (D),
        such belief shall satisfy the requirement under paragraph (1).
    (b) Notice Requirement.--
            (1) In general.--If an appropriate Federal banking agency 
        formally or informally requests or orders a depository 
        institution to terminate a specific customer account or a group 
        of customer accounts, the agency shall--
                    (A) provide such request or order to the 
                institution in writing; and
                    (B) accompany such request or order with a written 
                justification for why such termination is needed, 
                including any specific laws or regulations the agency 
                believes are being violated by the customer or group of 
                customers, if any.
            (2) Justification requirement.--A justification described 
        under paragraph (1)(B) may not be based solely on the 
        reputation risk to the depository institution.
    (c) Customer Notice.--
            (1) Notice required.--Except as provided under paragraph 
        (2), if an appropriate Federal banking agency orders a 
        depository institution to terminate a specific customer account 
        or a group of customer accounts, the depository institution 
        shall inform the customer or customers of the justification for 
        the customer's account termination described under subsection 
        (b).
            (2) Notice prohibited in cases of national security.--If an 
        appropriate Federal banking agency requests or orders a 
        depository institution to terminate a specific customer account 
        or a group of customer accounts based on a belief that the 
        customer or customers pose a threat to national security, or 
        are otherwise described under subsection (a)(2), neither the 
        depository institution nor the appropriate Federal banking 
        agency may inform the customer or customers of the 
        justification for the customer's account termination.
    (d) Reporting Requirement.--Each appropriate Federal banking agency 
shall issue an annual report to the Congress stating--
            (1) the aggregate number of specific customer accounts that 
        the agency requested or ordered a depository institution to 
        terminate during the previous year; and
            (2) the legal authority on which the agency relied in 
        making such requests and orders and the frequency on which the 
        agency relied on each such authority.
    (e) Definitions.--For purposes of this section:
            (1) Appropriate federal banking agency.--The term 
        ``appropriate Federal banking agency'' means--
                    (A) the appropriate Federal banking agency, as 
                defined under section 3 of the Federal Deposit 
                Insurance Act (12 U.S.C. 1813); and
                    (B) the National Credit Union Administration, in 
                the case of an insured credit union.
            (2) Depository institution.--The term ``depository 
        institution'' means--
                    (A) a depository institution, as defined under 
                section 3 of the Federal Deposit Insurance Act (12 
                U.S.C. 1813); and
                    (B) an insured credit union.

SEC. 3. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND 
              ENFORCEMENT ACT OF 1989.

    Section 951 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 1833a) is amended--
            (1) in subsection (c)(2), by striking ``affecting a 
        federally insured financial institution'' and inserting 
        ``against a federally insured financial institution or by a 
        federally insured financial institution against an unaffiliated 
        third person''; and
            (2) in subsection (g)--
                    (A) in the header, by striking ``Subpoenas'' and 
                inserting ``Investigations''; and
                    (B) by amending paragraph (1)(C) to read as 
                follows:
                    ``(C) summon witnesses and require the production 
                of any books, papers, correspondence, memoranda, or 
                other records which the Attorney General deems relevant 
                or material to the inquiry, if the Attorney General--
                            ``(i) requests a court order from a court 
                        of competent jurisdiction for such actions and 
                        offers specific and articulable facts showing 
                        that there are reasonable grounds to believe 
                        that the information or testimony sought is 
                        relevant and material for conducting an 
                        investigation under this section; or
                            ``(ii) either personally or through 
                        delegation no lower than the Deputy Attorney 
                        General, issues and signs a subpoena for such 
                        actions and such subpoena is supported by 
                        specific and articulable facts showing that 
                        there are reasonable grounds to believe that 
                        the information or testimony sought is relevant 
                        for conducting an investigation under this 
                        section.''.

            Passed the House of Representatives February 4, 2016.

            Attest:

                                                                 Clerk.
114th CONGRESS

  2d Session

                               H. R. 766

_______________________________________________________________________

                                 AN ACT

 To provide requirements for the appropriate Federal banking agencies 
  when requesting or ordering a depository institution to terminate a 
   specific customer account, to provide for additional requirements 
 related to subpoenas issued under the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989, and for other purposes.