[Congressional Record Volume 165, Number 43 (Monday, March 11, 2019)]
[House]
[Pages H2623-H2625]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
COOPERATE WITH LAW ENFORCEMENT AGENCIES AND WATCH ACT OF 2019
Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 758) to provide a safe harbor for financial institutions
that maintain a customer account or customer transaction at the request
of a Federal or State law enforcement agency, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 758
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 ``Cooperate with Law
Enforcement Agencies and Watch Act of 2019''.
SEC. 2. SAFE HARBOR WITH RESPECT TO KEEP OPEN LETTERS.
(a) In General.--Subchapter II of chapter 53 of title 31,
United States Code, is amended by adding at the end the
following:
``Sec. 5333. Safe harbor with respect to keep open letters
``(a) In General.--With respect to a customer account or
customer transaction of a financial institution, if a
Federal, State, Tribal, or local law enforcement agency
requests, in writing, the financial institution to keep such
account or transaction open--
``(1) the financial institution shall not be liable under
this subchapter for maintaining such account or transaction
consistent with the parameters of the request; and
``(2) no Federal or State department or agency may take any
adverse supervisory action under this subchapter with respect
to the financial institution for maintaining such account or
transaction consistent with the parameters of the request.
``(b) Rule of Construction.--Nothing in this section may be
construed--
``(1) from preventing a Federal or State department or
agency from verifying the validity of a written request
described under subsection (a) with the Federal, State,
Tribal, or local law enforcement agency making the written
request; or
``(2) to relieve a financial institution from complying
with any reporting requirements, including the reporting of
suspicious transactions under section 5318(g).
``(c) Letter Termination Date.--For purposes of this
section, any written request described under subsection (a)
shall include a termination date after which such request
shall no longer apply.''.
(b) Clerical Amendment.--The table of contents for chapter
53 of title 31, United States Code, is amended by inserting
after the item relating to section 5332 the following:
``5333. Safe harbor with respect to keep open letters.''.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the House Budget Committee, provided that such
statement has been submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from
California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each
will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members
have 5 legislative days within which to revise and extend their remarks
on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentlewoman from California?
There was no objection.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 758 would strengthen cooperation between financial
institutions and law enforcement agencies to better detect, deter, and
combat terrorism and financial crimes.
With respect to the Bank Secrecy Act anti-money laundering, referred
to as BSA/AML, supervisory actions, this bill would carve out a narrow
safe harbor for financial institutions to keep a customer's account
open at the written request of a law enforcement agency, including
those at the Federal, State, local, and Tribal levels.
[[Page H2624]]
This cooperation will enable law enforcement agencies to follow the
money in the bank accounts of terrorists, human traffickers, corrupt
officials, and those involved with organized crime.
Of equal importance, the legislation provides an assurance to
financial institutions, clarifying that they will not be held liable
for their cooperation and collaboration with law enforcement in helping
to thwart illicit finance.
I will note that law enforcement agencies are currently expected to
provide a written notice to financial institutions, requesting that the
accounts of bad actors remain open to monitor transactions and build
stronger criminal cases. However, this practice does not always happen
and exposes financial institutions to enforcement actions from their
banking regulators. Banks should not be put in a position to choose
whether or not to help law enforcement out of concern about regulatory
consequences.
We simply cannot allow bad actors to launder money and finance terror
through our banks. H.R. 758 will encourage financial institutions to
maintain a strong partnership with law enforcement.
In the 115th Congress, this bill was unanimously approved by the
Financial Services Committee. The House passed the bill by a vote of
379-4.
I thank the gentleman from Arkansas (Mr. Hill) and the gentleman from
Illinois (Mr. Foster) for introducing this bipartisan piece of
legislation. This bill is one example of our committee's efforts to
fight terrorism, corruption, and financial crime. I urge all Members to
vote ``yes'' on H.R. 758. I reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, first, let me thank Chairwoman Waters for her work on
this bill. I am delighted the House is considering this important bill,
H.R. 758, which I have had the pleasure to work on over the past year
with my good friend from Illinois, Congressman Foster.
As a former community banker, I have dealt with the conflict of
wanting to help law enforcement agencies when receiving a keep open
letter, but not being able to because of the need to comply with the
requirements set forth by a regulator, frequently and often in the
middle of a bank exam.
Today, the overall purpose of this bill is to support law enforcement
and reduce money laundering and terrorist financing through our banking
system. That is why, along with my friend Mr. Foster, I was pleased to
introduce this, as the chairwoman said, narrow, commonsense bill, which
enables partnerships without repercussions between law enforcement and
our local financial institutions.
This legislation allows law enforcement to monitor cash flows
associated with criminal investigations at financial institutions.
Under the Bank Secrecy Act and anti-money laundering regulations, banks
face strict rules for managing accounts so that they cannot facilitate
money laundering, terrorism financing, drug running, and other illegal
activities.
Sometimes, banks receive notices from law enforcement agencies known
as keep open letters to encourage them to keep an account open so that
law enforcement can monitor what they think to be and suspect to be
criminal activity and track the payments for better monitoring.
I have heard recently from banks that they are seeing an increase in
the number of keep open letters, many of which can be attributable to
new human trafficking investigations. Allowing banks to keep these
accounts open will help stop these terrible criminal actions.
Currently, if banks help law enforcement and comply with the keep
open letter request, they face the risk of being penalized by someone
from the same regulatory agency. This commonsense bill supports those
efforts by law enforcement by allowing financial institutions to comply
with such requests to maintain a suspicious account without being
penalized in the middle of a bank exam. Under this bill, no Federal
department or agency may take an adverse supervisory action with
respect to the financial institution that is keeping the account open.
As the chairwoman said, last Congress, this legislation unanimously
passed out of our House Financial Services Committee and passed under
the suspension of the rules. The legislation was also included as a
provision last Congress in the JOBS 3.0 package.
Chairman Waters and former Chairman Hensarling made fighting illicit
finance a priority for our committee. Given the strong bipartisanship,
I urge my colleagues on both sides of the aisle to support this
measure. It will give law enforcement the tools it needs to prosecute
bad actors who are exploiting our financial system.
I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from
Illinois (Mr. Foster).
{time} 1645
Mr. FOSTER. Mr. Speaker, I thank Chairwoman Waters for yielding.
Mr. Speaker, I would like to start by thanking the chairwoman for
bringing up this bipartisan bill today and for maintaining bipartisan
momentum in the areas where bipartisan agreement is achievable.
Chairwoman Waters and her staff were instrumental in passing this bill
in the last Congress and including it in JOBS 3.0.
I would also like to thank my friend, Congressman Hill, for working
on the Cooperate with Law Enforcement Agencies and Watch Act, the CLAW
Act, with me.
I am proud to support this bill, which passed with very strong
bipartisan support in the last Congress, a 55-0 vote in the Financial
Services Committee, a 379-4 vote on the House floor.
This bill creates a commonsense safe harbor from Bank Secrecy Act
liability for a bank that keeps an account open at the request of law
enforcement. For background, law enforcement agencies sometimes send
what are called keep open letters to financial institutions so that
they can obtain critical evidence in investigations by following the
money.
While following these law enforcement requests is optional, agreeing
to them does, in fact, create a technical violation of the Bank Secrecy
Act. This complicates the decision for a financial institution that
should be simple. This could, in fact, undermine our efforts to prevent
illicit finance or money laundering.
This bill will enhance the ability of the law enforcement community
to track funds in a criminal investigation, leading to better evidence
and, hopefully, conviction of criminals higher up in the hierarchy. To
be clear, nothing in this bill takes away from financial regulators'
safety and soundness powers, and financial institutions still have to
file SARs when they have a keep open letter.
In addition, this bill requires that the keep open letters have a
definite duration but does not preclude law enforcement from sending
subsequent letters to extend the period, should the investigation
continue.
This bill is a great example of how Democrats and Republicans can
come together on a number of issues of common interest.
In a world in which criminals and criminal organizations have access
to increasingly sophisticated tools and technologies to carry out their
criminal activities, we should help financial institutions in leveling
the playing field to bring these criminals to justice.
This bill follows other commonsense, bipartisan efforts that I have
supported to modernize our Nation's ability to confront dangerous
criminals and criminal organizations. I recently introduced with
Congressman Kustoff the CONFRONT Act, which would require the Treasury
Department to develop a national strategy to combat the financial
crimes of transnational criminal organizations and individuals. I am
hopeful that this bill can also be passed in the near future with
similarly strong bipartisan support.
This bill today is an important measure that allows financial
institutions to effectively assist with combating crimes such as money
laundering and illicit financing, and I urge my colleagues to support
this bill.
Mr. HILL of Arkansas. Mr. Speaker, I have no further speakers on this
side of the aisle.
Mr. Speaker, in closing, I would just simply urge, with the work done
by Mr. Foster and myself, and with thanks to
[[Page H2625]]
the Chair, that we have strong bipartisan support in favor of H.R. 758,
and I yield back the balance of my time.
Ms. WATERS. Mr. Speaker, I am pleased that Mr. Hill and Mr. Foster
have brought this measure to the House on a bipartisan basis. It will
help provide law enforcement more access to the critical information it
needs and in a timely manner.
Mr. Speaker, I urge my colleagues to join me in supporting this
important piece of legislation, and I yield back the balance of my
time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentlewoman from California (Ms. Waters) that the House suspend the
rules and pass the bill, H.R. 758, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further
proceedings on this motion will be postponed.
____________________