[Congressional Record Volume 165, Number 170 (Monday, October 28, 2019)]
[House]
[Pages H8494-H8503]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




   COORDINATING OVERSIGHT, UPGRADING AND INNOVATING TECHNOLOGY, AND 
                      EXAMINER REFORM ACT OF 2019

  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I move to suspend the rules 
and pass the bill (H.R. 2514) to make reforms to the Federal Bank 
Secrecy Act and anti-money laundering laws, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 2514

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the 
     ``Coordinating Oversight, Upgrading and Innovating 
     Technology, and Examiner Reform Act of 2019'' or the 
     ``COUNTER Act of 2019''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Bank Secrecy Act definition.
Sec. 3. Determination of Budgetary Effects.

                    TITLE I--STRENGTHENING TREASURY

Sec. 101. Improving the definition and purpose of the Bank Secrecy Act.
Sec. 102. Special hiring authority.
Sec. 103. Civil Liberties and Privacy Officer.

[[Page H8495]]

Sec. 104. Civil Liberties and Privacy Council.
Sec. 105. International coordination.
Sec. 106. Treasury Attaches Program.
Sec. 107. Increasing technical assistance for international 
              cooperation.
Sec. 108. FinCEN Domestic Liaisons.
Sec. 109. FinCEN Exchange.
Sec. 110. Study and strategy on trade-based money laundering.
Sec. 111. Study and strategy on de-risking.
Sec. 112. AML examination authority delegation study.
Sec. 113. Study and strategy on Chinese money laundering.

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

Sec. 201. Pilot program on sharing of suspicious activity reports 
              within a financial group.
Sec. 202. Sharing of compliance resources.
Sec. 203. GAO Study on feedback loops.
Sec. 204. FinCEN study on BSA value.
Sec. 205. Sharing of threat pattern and trend information.
Sec. 206. Modernization and upgrading whistleblower protections.
Sec. 207. Certain violators barred from serving on boards of United 
              States financial institutions.
Sec. 208. Additional damages for repeat Bank Secrecy Act violators.
Sec. 209. Justice annual report on deferred and non-prosecution 
              agreements.
Sec. 210. Return of profits and bonuses.
Sec. 211. Application of Bank Secrecy Act to dealers in antiquities.
Sec. 212. Geographic targeting order.
Sec. 213. Study and revisions to currency transaction reports and 
              suspicious activity reports.
Sec. 214. Streamlining requirements for currency transaction reports 
              and suspicious activity reports.

                 TITLE III--MODERNIZING THE AML SYSTEM

Sec. 301. Encouraging innovation in BSA compliance.
Sec. 302. Innovation Labs.
Sec. 303. Innovation Council.
Sec. 304. Testing methods rulemaking.
Sec. 305. FinCEN study on use of emerging technologies.
Sec. 306. Discretionary surplus funds.

     SEC. 2. BANK SECRECY ACT DEFINITION.

       Section 5312(a) of title 31, United States Code, is amended 
     by adding at the end the following:
       ``(7) Bank secrecy act.--The term `Bank Secrecy act' 
     means--
       ``(A) section 21 of the Federal Deposit Insurance Act;
       ``(B) chapter 2 of title I of Public Law 91-508; and
       ``(C) this subchapter.''.

     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.

                    TITLE I--STRENGTHENING TREASURY

     SEC. 101. IMPROVING THE DEFINITION AND PURPOSE OF THE BANK 
                   SECRECY ACT.

       Section 5311 of title 31, United States Code, is amended--
       (1) by inserting ``to protect our national security, to 
     safeguard the integrity of the international financial 
     system, and'' before ``to require''; and
       (2) by inserting ``to law enforcement and'' before ``in 
     criminal''.

     SEC. 102. SPECIAL HIRING AUTHORITY.

       (a) In General.--Section 310 of title 31, United States 
     Code, is amended--
       (1) by redesignating subsection (d) as subsection (g); and
       (2) by inserting after subsection (c) the following:
       ``(d) Special Hiring Authority.--
       ``(1) In general.--The Secretary of the Treasury may 
     appoint, without regard to the provisions of sections 3309 
     through 3318 of title 5, candidates directly to positions in 
     the competitive service (as defined in section 2102 of that 
     title) in FinCEN.
       ``(2) Primary responsibilities.--The primary responsibility 
     of candidates appointed pursuant to paragraph (1) shall be to 
     provide substantive support in support of the duties 
     described in subparagraphs (A), (B), (E), and (F) of 
     subsection (b)(2).''.
       (b) Report.--Not later than 360 days after the date of 
     enactment of this Act, and every year thereafter for 7 years, 
     the Director of the Financial Crimes Enforcement Network 
     shall submit a report to the Committee on Financial Services 
     of the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of the Senate that includes--
       (1) the number of new employees hired since the preceding 
     report through the authorities described under section 310(d) 
     of title 31, United States Code, along with position titles 
     and associated pay grades for such hires; and
       (2) a copy of any Federal Government survey of staff 
     perspectives at the Office of Terrorism and Financial 
     Intelligence, including findings regarding the Office and the 
     Financial Crimes Enforcement Network from the most recently 
     administered Federal Employee Viewpoint Survey.

     SEC. 103. CIVIL LIBERTIES AND PRIVACY OFFICER.

       (a) Appointment of Officers.--Not later than the end of the 
     3-month period beginning on the date of enactment of this 
     Act, a Civil Liberties and Privacy Officer shall be 
     appointed, from among individuals who are attorneys with 
     expertise in data privacy laws--
       (1) within each Federal functional regulator, by the head 
     of the Federal functional regulator;
       (2) within the Financial Crimes Enforcement Network, by the 
     Secretary of the Treasury; and
       (3) within the Internal Revenue Service Small Business and 
     Self-Employed Tax Center, by the Secretary of the Treasury.
       (b) Duties.--Each Civil Liberties and Privacy Officer 
     shall, with respect to the applicable regulator, Network, or 
     Center within which the Officer is located--
       (1) be consulted each time Bank Secrecy Act or anti-money 
     laundering regulations affecting civil liberties or privacy 
     are developed or reviewed;
       (2) be consulted on information-sharing programs, including 
     those that provide access to personally identifiable 
     information;
       (3) ensure coordination and clarity between anti-money 
     laundering, civil liberties, and privacy regulations;
       (4) contribute to the evaluation and regulation of new 
     technologies that may strengthen data privacy and the 
     protection of personally identifiable information collected 
     by each Federal functional regulator; and
       (5) develop metrics of program success.
       (c) Definitions.--For purposes of this section:
       (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has 
     the meaning given that term under section 5312 of title 31, 
     United States Code.
       (2) Federal functional regulator.--The term ``Federal 
     functional regulator'' means the Board of Governors of the 
     Federal Reserve System, the Comptroller of the Currency, the 
     Federal Deposit Insurance Corporation, the National Credit 
     Union Administration, the Securities and Exchange Commission, 
     and the Commodity Futures Trading Commission.

     SEC. 104. CIVIL LIBERTIES AND PRIVACY COUNCIL.

       (a) Establishment.--There is established the Civil 
     Liberties and Privacy Council (hereinafter in this section 
     referred to as the ``Council''), which shall consist of the 
     Civil Liberties and Privacy Officers appointed pursuant to 
     section 103.
       (b) Chair.--The Director of the Financial Crimes 
     Enforcement Network shall serve as the Chair of the Council.
       (c) Duty.--The members of the Council shall coordinate on 
     activities related to their duties as Civil Liberties Privacy 
     Officers, but may not supplant the individual agency 
     determinations on civil liberties and privacy.
       (d) Meetings.--The meetings of the Council--
       (1) shall be at the call of the Chair, but in no case may 
     the Council meet less than quarterly;
       (2) may include open and partially closed sessions, as 
     determined necessary by the Council; and
       (3) shall include participation by public and private 
     entities, law enforcement agencies, and a representative of 
     State bank supervisors (as defined under section 3 of the 
     Federal Deposit Insurance Act (12 U.S.C. 1813)).
       (e) Report.--The Chair of the Council shall issue an annual 
     report to the Congress on the program and policy activities, 
     including the success of programs as measured by metrics of 
     program success developed pursuant to section 103(b)(5), of 
     the Council during the previous year and any legislative 
     recommendations that the Council may have.
       (f) Nonapplicability of FACA.--The Federal Advisory 
     Committee Act (5 U.S.C. App.) shall not apply to the Council.

     SEC. 105. INTERNATIONAL COORDINATION.

       (a) In General.--The Secretary of the Treasury shall work 
     with the Secretary's foreign counterparts, including through 
     the Financial Action Task Force, the International Monetary 
     Fund, the World Bank, the Egmont Group of Financial 
     Intelligence Units, the Organisation for Economic Co-
     operation and Development, and the United Nations, to promote 
     stronger anti-money laundering frameworks and enforcement of 
     anti-money laundering laws.
       (b) Cooperation Goal.--In carrying out subsection (a), the 
     Secretary of the Treasury may work directly with foreign 
     counterparts and other organizations where the goal of 
     cooperation can best be met.
       (c) International Monetary Fund.--
       (1) Support for capacity of the international monetary fund 
     to prevent money laundering and financing of terrorism.--
     Title XVI of the International Financial Institutions Act (22 
     U.S.C. 262p et seq.) is amended by adding at the end the 
     following:

     ``SEC. 1629. SUPPORT FOR CAPACITY OF THE INTERNATIONAL 
                   MONETARY FUND TO PREVENT MONEY LAUNDERING AND 
                   FINANCING OF TERRORISM.

       ``The Secretary of the Treasury shall instruct the United 
     States Executive Director at the International Monetary Fund 
     to support the increased use of the administrative budget of 
     the Fund for technical assistance that strengthens the 
     capacity of Fund members to prevent money laundering and the 
     financing of terrorism.''.

[[Page H8496]]

       (2) National advisory council report to congress.--The 
     Chairman of the National Advisory Council on International 
     Monetary and Financial Policies shall include in the report 
     required by section 1701 of the International Financial 
     Institutions Act (22 U.S.C. 262r) a description of--
       (A) the activities of the International Monetary Fund in 
     the most recently completed fiscal year to provide technical 
     assistance that strengthens the capacity of Fund members to 
     prevent money laundering and the financing of terrorism, and 
     the effectiveness of the assistance; and
       (B) the efficacy of efforts by the United States to support 
     such technical assistance through the use of the Fund's 
     administrative budget, and the level of such support.
       (3) Sunset.--Effective on the date that is the end of the 
     4-year period beginning on the date of enactment of this Act, 
     section 1629 of the International Financial Institutions Act, 
     as added by paragraph (1), is repealed.

     SEC. 106. TREASURY ATTACHES PROGRAM.

       (a) In General.--Title 31, United States Code, is amended 
     by inserting after section 315 the following:

     ``Sec. 316. Treasury Attaches Program

       ``(a) In General.--There is established the Treasury 
     Attaches Program, under which the Secretary of the Treasury 
     shall appoint employees of the Department of the Treasury, 
     after nomination by the Director of the Financial Crimes 
     Enforcement Network (`FinCEN'), as a Treasury attache, who 
     shall--
       ``(1) be knowledgeable about the Bank Secrecy Act and anti-
     money laundering issues;
       ``(2) be co-located in a United States embassy;
       ``(3) perform outreach with respect to Bank Secrecy Act and 
     anti-money laundering issues;
       ``(4) establish and maintain relationships with foreign 
     counterparts, including employees of ministries of finance, 
     central banks, and other relevant official entities;
       ``(5) conduct outreach to local and foreign financial 
     institutions and other commercial actors, including--
       ``(A) information exchanges through FinCEN and FinCEN 
     programs; and
       ``(B) soliciting buy-in and cooperation for the 
     implementation of--
       ``(i) United States and multilateral sanctions; and
       ``(ii) international standards on anti-money laundering and 
     the countering of the financing of terrorism; and
       ``(6) perform such other actions as the Secretary 
     determines appropriate.
       ``(b) Number of Attaches.--The number of Treasury attaches 
     appointed under this section at any one time shall be not 
     fewer than 6 more employees than the number of employees of 
     the Department of the Treasury serving as Treasury attaches 
     on March 1, 2019.
       ``(c) Compensation.--Each Treasury attache appointed under 
     this section and located at a United States embassy shall 
     receive compensation at the higher of--
       ``(1) the rate of compensation provided to a Foreign 
     Service officer at a comparable career level serving at the 
     same embassy; or
       ``(2) the rate of compensation the Treasury attache would 
     otherwise have received, absent the application of this 
     subsection.
       ``(d) Bank Secrecy Act Defined.--In this section, the term 
     `Bank Secrecy Act' has the meaning given that term under 
     section 5312.''.
       (b) Clerical Amendment.--The table of contents for chapter 
     3 of title 31, United States Code, is amended by inserting 
     after the item relating to section 315 the following:

``316. Treasury Attaches Program.''.

     SEC. 107. INCREASING TECHNICAL ASSISTANCE FOR INTERNATIONAL 
                   COOPERATION.

       (a) In General.--There is authorized to be appropriated for 
     each of fiscal years 2020 through 2024 to the Secretary of 
     the Treasury for purposes of providing technical assistance 
     that promotes compliance with international standards and 
     best practices, including in particular those aimed at the 
     establishment of effective anti-money laundering and 
     countering the financing of terrorism regimes, in an amount 
     equal to twice the amount authorized for such purpose for 
     fiscal year 2019.
       (b) Activity and Evaluation Report.--Not later than 360 
     days after enactment of this Act, and every year thereafter 
     for five years, the Secretary of the Treasury shall issue a 
     report to the Congress on the assistance (as described under 
     subsection (a)) of the Office of Technical Assistance of the 
     Department of the Treasury containing--
       (1) a narrative detailing the strategic goals of the Office 
     in the previous year, with an explanation of how technical 
     assistance provided in the previous year advances the goals;
       (2) a description of technical assistance provided by the 
     Office in the previous year, including the objectives and 
     delivery methods of the assistance;
       (3) a list of beneficiaries and providers (other than 
     Office staff) of the technical assistance;
       (4) a description of how technical assistance provided by 
     the Office complements, duplicates, or otherwise affects or 
     is affected by technical assistance provided by the 
     international financial institutions (as defined under 
     section 1701(c) of the International Financial Institutions 
     Act); and
       (5) a copy of any Federal Government survey of staff 
     perspectives at the Office of Technical Assistance, including 
     any findings regarding the Office from the most recently 
     administered Federal Employee Viewpoint Survey.

     SEC. 108. FINCEN DOMESTIC LIAISONS.

       Section 310 of title 31, United States Code, as amended by 
     section 102, is further amended by inserting after subsection 
     (d) the following:
       ``(e) FinCEN Domestic Liaisons.--
       ``(1) In general.--The Director of FinCEN shall appoint at 
     least 6 senior FinCEN employees as FinCEN Domestic Liaisons, 
     who shall--
       ``(A) each be assigned to focus on a specific region of the 
     United States;
       ``(B) be located at an office in such region (or co-located 
     at an office of the Board of Governors of the Federal Reserve 
     System in such region); and
       ``(C) perform outreach to BSA officers at financial 
     institutions (including non-bank financial institutions) and 
     persons who are not financial institutions, especially with 
     respect to actions taken by FinCEN that require specific 
     actions by, or have specific effects on, such institutions or 
     persons, as determined by the Director.
       ``(2) Definitions.--In this subsection:
       ``(A) BSA officer.--The term `BSA officer' means an 
     employee of a financial institution whose primary job 
     responsibility involves compliance with the Bank Secrecy Act, 
     as such term is defined under section 5312.
       ``(B) Financial institution.--The term `financial 
     institution' has the meaning given that term under section 
     5312.''.

     SEC. 109. FINCEN EXCHANGE.

       Section 310 of title 31, United States Code, as amended by 
     section 108, is further amended by inserting after subsection 
     (e) the following:
       ``(f) FinCEN Exchange.--
       ``(1) Establishment.--The FinCEN Exchange is hereby 
     established within FinCEN, which shall consist of the FinCEN 
     Exchange program of FinCEN in existence on the day before the 
     date of enactment of this paragraph.
       ``(2) Purpose.--The FinCEN Exchange shall facilitate a 
     voluntary public-private information sharing partnership 
     among law enforcement, financial institutions, and FinCEN 
     to--
       ``(A) effectively and efficiently combat money laundering, 
     terrorism financing, organized crime, and other financial 
     crimes;
       ``(B) protect the financial system from illicit use; and
       ``(C) promote national security.
       ``(3) Report.--
       ``(A) In general.--Not later than one year after the date 
     of enactment of this subsection, and annually thereafter for 
     the next five years, the Secretary of the Treasury shall 
     submit to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report containing--
       ``(i) an analysis of the efforts undertaken by the FinCEN 
     Exchange and the results of such efforts;
       ``(ii) an analysis of the extent and effectiveness of the 
     FinCEN Exchange, including any benefits realized by law 
     enforcement from partnership with financial institutions; and
       ``(iii) any legislative, administrative, or other 
     recommendations the Secretary may have to strengthen FinCEN 
     Exchange efforts.
       ``(B) Classified annex.--Each report under subparagraph (A) 
     may include a classified annex.
       ``(4) Information sharing requirement.--Information shared 
     pursuant to this subsection shall be shared in compliance 
     with all other applicable Federal laws and regulations.
       ``(5) Rule of construction.--Nothing under this subsection 
     may be construed to create new information sharing 
     authorities related to the Bank Secrecy Act (as such term is 
     defined under section 5312 of title 31, United States Code).
       ``(6) Financial institution defined.--In this subsection, 
     the term `financial institution' has the meaning given that 
     term under section 5312.''.

     SEC. 110. STUDY AND STRATEGY ON TRADE-BASED MONEY LAUNDERING.

       (a) Study.--The Secretary of the Treasury shall carry out a 
     study, in consultation with appropriate private sector 
     stakeholders and Federal departments and agencies, on trade-
     based money laundering.
       (b) Report.--Not later than the end of the 1-year period 
     beginning on the date of the enactment of this Act, the 
     Secretary shall issue a report to the Congress containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) proposed strategies to combat trade-based money 
     laundering.
       (c) Classified Annex.--The report required under this 
     section may include a classified annex.
       (d) Contracting Authority.--The Secretary may contract with 
     a private third-party to carry out the study required under 
     this section. The authority of the Secretary to enter into 
     contracts under this subsection shall be in effect for each 
     fiscal year only to the extent and in the amounts as are 
     provided in advance in appropriations Acts.

     SEC. 111. STUDY AND STRATEGY ON DE-RISKING.

       (a) Review.--The Secretary of the Treasury, in consultation 
     with appropriate private

[[Page H8497]]

     sector stakeholders, examiners, the Federal functional 
     regulators (as defined under section 103), State bank 
     supervisors, and other relevant stakeholders, shall undertake 
     a formal review of--
       (1) any adverse consequences of financial institutions de-
     risking entire categories of relationships, including 
     charities, embassy accounts, money services businesses (as 
     defined under section 1010.100(ff) of title 31, Code of 
     Federal Regulations) and their agents, countries, 
     international and domestic regions, and respondent banks;
       (2) the reasons why financial institutions are engaging in 
     de-risking;
       (3) the association with and effects of de-risking on money 
     laundering and financial crime actors and activities;
       (4) the most appropriate ways to promote financial 
     inclusion, particularly with respect to developing countries, 
     while maintaining compliance with the Bank Secrecy Act, 
     including an assessment of policy options to--
       (A) more effectively tailor Federal actions and penalties 
     to the size of foreign financial institutions and any 
     capacity limitations of foreign governments; and
       (B) reduce compliance costs that may lead to the adverse 
     consequences described in paragraph (1);
       (5) formal and informal feedback provided by examiners that 
     may have led to de-risking;
       (6) the relationship between resources dedicated to 
     compliance and overall sophistication of compliance efforts 
     at entities that may be experiencing de-risking versus those 
     that have not experienced de-risking; and
       (7) any best practices from the private sector that 
     facilitate correspondent bank relationships.
       (b) De-risking Strategy.--The Secretary shall develop a 
     strategy to reduce de-risking and adverse consequences 
     related to de-risking.
       (c) Report.--Not later than the end of the 1-year period 
     beginning on the date of the enactment of this Act, the 
     Secretary, in consultation with the Federal functional 
     regulators, State bank supervisors, and other relevant 
     stakeholders, shall issue a report to the Congress 
     containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) the strategy developed pursuant to subsection (b).
       (d) Definitions.--In this section:
       (1) De-risking.--The term ``de-risking'' means the 
     wholesale closing of accounts or limiting of financial 
     services for a category of customer due to unsubstantiated 
     risk as it relates to compliance with the Bank Secrecy Act.
       (2) BSA terms.--The terms ``Bank Secrecy Act'' and 
     ``financial institution'' have the meaning given those terms, 
     respectively, under section 5312 off title 31, United States 
     Code.
       (3) State bank supervisor.--The term ``State bank 
     supervisor'' has the meaning given that term under section 3 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813).

     SEC. 112. AML EXAMINATION AUTHORITY DELEGATION STUDY.

       (a) Study.--The Secretary of the Treasury shall carry out a 
     study, in consultation with State bank supervisors (as 
     defined under section 3 of the Federal Deposit Insurance Act 
     (12 U.S.C. 1813)), and other relevant stakeholders, on the 
     Secretary's delegation of examination authority under the 
     Bank Secrecy Act, including--
       (1) an evaluation of the efficacy of the delegation, 
     especially with respect to the mission of the Bank Secrecy 
     Act;
       (2) whether the delegated agencies have appropriate 
     resources to perform their delegated responsibilities; and
       (3) whether the examiners in delegated agencies have 
     sufficient training and support to perform their 
     responsibilities.
       (b) Report.--Not later than one year after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     submit to the Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate a report containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) recommendations to improve the efficacy of delegation 
     authority, including the potential for de-delegation of any 
     or all such authority where it may be appropriate.
       (c) Bank Secrecy Act Defined.--The term ``Bank Secrecy 
     Act'' has the meaning given that term under section 5312 off 
     title 31, United States Code.

     SEC. 113. STUDY AND STRATEGY ON CHINESE MONEY LAUNDERING.

       (a) Study.--The Secretary of the Treasury shall carry out a 
     study on the extent and effect of Chinese money laundering 
     activities in the United States, including territories and 
     possessions of the United States, and worldwide.
       (b) Strategy to Combat Chinese Money Laundering.--Upon the 
     completion of the study required under subsection (a), the 
     Secretary shall, in consultation with such other Federal 
     departments and agencies as the Secretary determines 
     appropriate, develop a strategy to combat Chinese money 
     laundering activities.
       (c) Report.--Not later than the end of the 1-year period 
     beginning on the date of enactment of this Act, the Secretary 
     of the Treasury shall issue a report to Congress containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (2) the strategy developed under subsection (b).

                 TITLE II--IMPROVING AML/CFT OVERSIGHT

     SEC. 201. PILOT PROGRAM ON SHARING OF SUSPICIOUS ACTIVITY 
                   REPORTS WITHIN A FINANCIAL GROUP.

       (a) In General.--
       (1) Sharing with foreign branches and affiliates.--Section 
     5318(g) of title 31, United States Code, is amended by adding 
     at the end the following:
       ``(5) Pilot program on sharing with foreign branches, 
     subsidiaries, and affiliates.--
       ``(A) In general.--The Secretary of the Treasury shall 
     issue rules establishing the pilot program described under 
     subparagraph (B), subject to such controls and restrictions 
     as the Director of the Financial Crimes Enforcement Network 
     determines appropriate, including controls and restrictions 
     regarding participation by financial institutions and 
     jurisdictions in the pilot program. In prescribing such 
     rules, the Secretary shall ensure that the sharing of 
     information described under such subparagraph (B) is subject 
     to appropriate standards and requirements regarding data 
     security and the confidentiality of personally identifiable 
     information.
       ``(B) Pilot program described.--The pilot program required 
     under this paragraph shall--
       ``(i) permit a financial institution with a reporting 
     obligation under this subsection to share reports (and 
     information on such reports) under this subsection with the 
     institution's foreign branches, subsidiaries, and affiliates 
     for the purpose of combating illicit finance risks, 
     notwithstanding any other provision of law except 
     subparagraphs (A) and (C);
       ``(ii) terminate on the date that is five years after the 
     date of enactment of this paragraph, except that the 
     Secretary may extend the pilot program for up to two years 
     upon submitting a report to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate that 
     includes--

       ``(I) a certification that the extension is in the national 
     interest of the United States, with a detailed explanation of 
     the reasons therefor;
       ``(II) an evaluation of the usefulness of the pilot 
     program, including a detailed analysis of any illicit 
     activity identified or prevented as a result of the program; 
     and
       ``(III) a detailed legislative proposal providing for a 
     long-term extension of the pilot program activities, 
     including expected budgetary resources for the activities, if 
     the Secretary determines that a long-term extension is 
     appropriate.

       ``(C) Prohibition involving certain jurisdictions.--In 
     issuing the regulations required under subparagraph (A), the 
     Secretary may not permit a financial institution to share 
     information on reports under this subsection with a foreign 
     branch, subsidiary, or affiliate located in--
       ``(i) the People's Republic of China;
       ``(ii) the Russian Federation; or
       ``(iii) a jurisdiction that--

       ``(I) is subject to countermeasures imposed by the Federal 
     Government;
       ``(II) is a state sponsor of terrorism; or
       ``(III) the Secretary has determined cannot reasonably 
     protect the privacy and confidentiality of such information 
     or would otherwise use such information in a manner that is 
     not consistent with the national interest of the United 
     States.

       ``(D) Implementation updates.--Not later than 360 days 
     after the date rules are issued under subparagraph (A), and 
     annually thereafter for three years, the Secretary, or the 
     Secretary's designee, shall brief the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate on--
       ``(i) the degree of any information sharing permitted under 
     the pilot program, and a description of criteria used by the 
     Secretary to evaluate the appropriateness of the information 
     sharing;
       ``(ii) the effectiveness of the pilot program in 
     identifying or preventing the violation of a United States 
     law or regulation, and mechanisms that may improve such 
     effectiveness; and
       ``(iii) any recommendations to amend the design of the 
     pilot program.
       ``(E) Rule of construction.--Nothing in this paragraph 
     shall be construed as limiting the Secretary's authority 
     under provisions of law other than this paragraph to 
     establish other permissible purposes or methods for a 
     financial institution sharing reports (and information on 
     such reports) under this subsection with the institution's 
     foreign headquarters or with other branches of the same 
     institution.
       ``(F) Notice of use of other authority.--If the Secretary, 
     pursuant to any authority other than that provided under this 
     paragraph, permits a financial institution to share 
     information on reports under this subsection with a foreign 
     branch, subsidiary, or affiliate located in a foreign 
     jurisdiction, the

[[Page H8498]]

     Secretary shall notify the Committee on Financial Services of 
     the House of Representatives and the Committee on Banking, 
     Housing, and Urban Affairs of such permission and the 
     applicable foreign jurisdiction.
       ``(6) Treatment of foreign jurisdiction-originated 
     reports.--A report received by a financial institution from a 
     foreign affiliate with respect to a suspicious transaction 
     relevant to a possible violation of law or regulation shall 
     be subject to the same confidentiality requirements provided 
     under this subsection for a report of a suspicious 
     transaction described under paragraph (1).''.
       (2) Notification prohibitions.--Section 5318(g)(2)(A) of 
     title 31, United States Code, is amended--
       (A) in clause (i), by inserting after ``transaction has 
     been reported'' the following: ``or otherwise reveal any 
     information that would reveal that the transaction has been 
     reported''; and
       (B) in clause (ii), by inserting after ``transaction has 
     been reported,'' the following: ``or otherwise reveal any 
     information that would reveal that the transaction has been 
     reported,''.
       (b) Rulemaking.--Not later than the end of the 360-day 
     period beginning on the date of enactment of this Act, the 
     Secretary of the Treasury shall issue regulations to carry 
     out the amendments made by this section.

     SEC. 202. SHARING OF COMPLIANCE RESOURCES.

       (a) In General.--Section 5318 of title 31, United States 
     Code, is amended by adding at the end the following:
       ``(o) Sharing of Compliance Resources.--
       ``(1) Sharing permitted.--Two or more financial 
     institutions may enter into collaborative arrangements in 
     order to more efficiently comply with the requirements of 
     this subchapter.
       ``(2) Outreach.--The Secretary of the Treasury and the 
     appropriate supervising agencies shall carry out an outreach 
     program to provide financial institutions with information, 
     including best practices, with respect to the sharing of 
     resources described under paragraph (1).''.
       (b) Rule of Construction.--The amendment made by subsection 
     (a) may not be construed to require financial institutions to 
     share resources.

     SEC. 203. GAO STUDY ON FEEDBACK LOOPS.

       (a) Study.--The Comptroller General of the United States 
     shall carry out a study on--
       (1) best practices within the United States Government for 
     providing feedback (``feedback loop'') to relevant parties 
     (including regulated private entities) on the usage and 
     usefulness of personally identifiable information (``PII''), 
     sensitive-but-unclassified (``SBU'') data, or similar 
     information provided by such parties to Government users of 
     such information and data (including law enforcement or 
     regulators); and
       (2) any practices or standards inside or outside the United 
     States for providing feedback through sensitive information 
     and public-private partnership information sharing efforts, 
     specifically related to efforts to combat money laundering 
     and other forms of illicit finance.
       (b) Report.--Not later than the end of the 18-month period 
     beginning on the date of the enactment of this Act, the 
     Comptroller General shall issue a report to the Committee on 
     Banking, Housing, and Urban Affairs of the Senate and the 
     Committee on Financial Services of the House of 
     Representatives containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a);
       (2) with respect to each of paragraphs (1) and (2) of 
     subsection (a), any best practices or significant concerns 
     identified by the Comptroller General, and their 
     applicability to public-private partnerships and feedback 
     loops with respect to U.S. efforts to combat money laundering 
     and other forms of illicit finance; and
       (3) recommendations to reduce or eliminate any unnecessary 
     Government collection of the information described under 
     subsection (a)(1).

     SEC. 204. FINCEN STUDY ON BSA VALUE.

       (a) Study.--The Director of the Financial Crimes 
     Enforcement Network shall carry out a study on Bank Secrecy 
     Act value.
       (b) Report.--Not later than the end of the 30-day period 
     beginning on the date the study under subsection (a) is 
     completed, the Director shall issue a report to the Committee 
     on Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate containing all findings and determinations made in 
     carrying out the study required under this section.
       (c) Classified Annex.--The report required under this 
     section may include a classified annex, if the Director 
     determines it appropriate.
       (d) Bank Secrecy Act Defined.--For purposes of this 
     section, the term ``Bank Secrecy Act'' has the meaning given 
     that term under section 5312 of title 31, United States Code.

     SEC. 205. SHARING OF THREAT PATTERN AND TREND INFORMATION.

       Section 5318(g) of title 31, United States Code, as amended 
     by section 201(a)(1), is further amended by adding at the end 
     the following:
       ``(7) Sharing of threat pattern and trend information.--
       ``(A) SAR activity review.--The Director of the Financial 
     Crimes Enforcement Network shall restart publication of the 
     `SAR Activity Review - Trends, Tips & Issues', on not less 
     than a semi-annual basis, to provide meaningful information 
     about the preparation, use, and value of reports filed under 
     this subsection by financial institutions, as well as other 
     reports filed by financial institutions under the Bank 
     Secrecy Act.
       ``(B) Inclusion of typologies.--In each publication 
     described under subparagraph (A), the Director shall provide 
     financial institutions with typologies, including data that 
     can be adapted in algorithms (including for artificial 
     intelligence and machine learning programs) where 
     appropriate, on emerging money laundering and counter terror 
     financing threat patterns and trends.
       ``(C) Typology defined.--For purposes of this paragraph, 
     the term `typology' means the various techniques used to 
     launder money or finance terrorism.''.

     SEC. 206. MODERNIZATION AND UPGRADING WHISTLEBLOWER 
                   PROTECTIONS.

       (a) Rewards.--Section 5323(d) of title 31, United States 
     Code, is amended to read as follows:
       ``(d) Source of Rewards.--For the purposes of paying a 
     reward under this section, the Secretary may, subject to 
     amounts made available in advance by appropriation Acts, use 
     criminal fine, civil penalty, or forfeiture amounts recovered 
     based on the original information with respect to which the 
     reward is being paid.''.
       (b) Whistleblower Incentives.--
       Chapter 53 of title 31, United States Code, is amended--
       (1) by inserting after section 5323 the following:

     ``Sec. 5323A. Whistleblower incentives

       ``(a) Definitions.--In this section:
       ``(1) Covered judicial or administrative action.--The term 
     `covered judicial or administrative action' means any 
     judicial or administrative action brought by FinCEN under the 
     Bank Secrecy Act that results in monetary sanctions exceeding 
     $1,000,000.
       ``(2) FinCEN.--The term `FinCEN' means the Financial Crimes 
     Enforcement Network.
       ``(3) Monetary sanctions.--The term `monetary sanctions', 
     when used with respect to any judicial or administrative 
     action, means--
       ``(A) any monies, including penalties, disgorgement, and 
     interest, ordered to be paid; and
       ``(B) any monies deposited into a disgorgement fund as a 
     result of such action or any settlement of such action.
       ``(4) Original information.--The term `original 
     information' means information that--
       ``(A) is derived from the independent knowledge or analysis 
     of a whistleblower;
       ``(B) is not known to FinCEN from any other source, unless 
     the whistleblower is the original source of the information; 
     and
       ``(C) is not exclusively derived from an allegation made in 
     a judicial or administrative hearing, in a governmental 
     report, hearing, audit, or investigation, or from the news 
     media, unless the whistleblower is a source of the 
     information.
       ``(5) Related action.--The term `related action', when used 
     with respect to any judicial or administrative action brought 
     by FinCEN, means any judicial or administrative action that 
     is based upon original information provided by a 
     whistleblower that led to the successful enforcement of the 
     action.
       ``(6) Secretary.--The term `Secretary' means the Secretary 
     of the Treasury.
       ``(7) Whistleblower.--The term `whistleblower' means any 
     individual who provides, or 2 or more individuals acting 
     jointly who provide, information relating to a violation of 
     laws enforced by FinCEN, in a manner established, by rule or 
     regulation, by FinCEN.
       ``(b) Awards.--
       ``(1) In general.--In any covered judicial or 
     administrative action, or related action, the Secretary, 
     under such rules as the Secretary may issue and subject to 
     subsection (c), shall pay an award or awards to 1 or more 
     whistleblowers who voluntarily provided original information 
     to FinCEN that led to the successful enforcement of the 
     covered judicial or administrative action, or related action, 
     in an aggregate amount equal to not more than 30 percent, in 
     total, of what has been collected of the monetary sanctions 
     imposed in the action.
       ``(2) Source of awards.--For the purposes of paying any 
     award under paragraph (1), the Secretary may, subject to 
     amounts made available in advance by appropriation Acts, use 
     monetary sanction amounts recovered based on the original 
     information with respect to which the award is being paid.
       ``(c) Determination of Amount of Award; Denial of Award.--
       ``(1) Determination of amount of award.--
       ``(A) Discretion.--The determination of the amount of an 
     award made under subsection (b) shall be in the discretion of 
     the Secretary.
       ``(B) Criteria.--In responding to a disclosure and 
     determining the amount of an award made, FinCEN staff shall 
     meet with the whistleblower to discuss evidence disclosed and 
     rebuttals to the disclosure, and shall take into 
     consideration--
       ``(i) the significance of the information provided by the 
     whistleblower to the success of the covered judicial or 
     administrative action;
       ``(ii) the degree of assistance provided by the 
     whistleblower and any legal representative of the 
     whistleblower in a covered judicial or administrative action;

[[Page H8499]]

       ``(iii) the mission of FinCEN in deterring violations of 
     the law by making awards to whistleblowers who provide 
     information that lead to the successful enforcement of such 
     laws; and
       ``(iv) such additional relevant factors as the Secretary 
     may establish by rule.
       ``(2) Denial of award.--No award under subsection (b) shall 
     be made--
       ``(A) to any whistleblower who is, or was at the time the 
     whistleblower acquired the original information submitted to 
     FinCEN, a member, officer, or employee of--
       ``(i) an appropriate regulatory agency;
       ``(ii) the Department of Justice;
       ``(iii) a self-regulatory organization; or
       ``(iv) a law enforcement organization;
       ``(B) to any whistleblower who is convicted of a criminal 
     violation, or who the Secretary has a reasonable basis to 
     believe committed a criminal violation, related to the 
     judicial or administrative action for which the whistleblower 
     otherwise could receive an award under this section;
       ``(C) to any whistleblower who gains the information 
     through the performance of an audit of financial statements 
     required under the Bank Secrecy Act and for whom such 
     submission would be contrary to its requirements; or
       ``(D) to any whistleblower who fails to submit information 
     to FinCEN in such form as the Secretary may, by rule, 
     require.
       ``(3) Statement of reasons.--For any decision granting or 
     denying an award, the Secretary shall provide to the 
     whistleblower a statement of reasons that includes findings 
     of fact and conclusions of law for all material issues.
       ``(d) Representation.--
       ``(1) Permitted representation.--Any whistleblower who 
     makes a claim for an award under subsection (b) may be 
     represented by counsel.
       ``(2) Required representation.--
       ``(A) In general.--Any whistleblower who anonymously makes 
     a claim for an award under subsection (b) shall be 
     represented by counsel if the whistleblower anonymously 
     submits the information upon which the claim is based.
       ``(B) Disclosure of identity.--Prior to the payment of an 
     award, a whistleblower shall disclose their identity and 
     provide such other information as the Secretary may require, 
     directly or through counsel for the whistleblower.
       ``(e) Appeals.--Any determination made under this section, 
     including whether, to whom, or in what amount to make awards, 
     shall be in the discretion of the Secretary. Any such 
     determination, except the determination of the amount of an 
     award if the award was made in accordance with subsection 
     (b), may be appealed to the appropriate court of appeals of 
     the United States not more than 30 days after the 
     determination is issued by the Secretary. The court shall 
     review the determination made by the Secretary in accordance 
     with section 706 of title 5.
       ``(f) Employee Protections.--The Secretary of the Treasury 
     shall issue regulations protecting a whistleblower from 
     retaliation, which shall be as close as practicable to the 
     employee protections provided for under section 1057 of the 
     Consumer Financial Protection Act of 2010.''; and
       (2) in the table of contents for such chapter, by inserting 
     after the item relating to section 5323 the following new 
     item:

``5323A. Whistleblower incentives.''.

     SEC. 207. CERTAIN VIOLATORS BARRED FROM SERVING ON BOARDS OF 
                   UNITED STATES FINANCIAL INSTITUTIONS.

       Section 5321 of title 31, United States Code, is amended by 
     adding at the end the following:
       ``(f) Certain Violators Barred From Serving on Boards of 
     United States Financial Institutions.--
       ``(1) In general.--An individual found to have committed an 
     egregious violation of a provision of (or rule issued under) 
     the Bank Secrecy Act shall be barred from serving on the 
     board of directors of a United States financial institution 
     for a 10-year period beginning on the date of such finding.
       ``(2) Egregious violation defined.--With respect to an 
     individual, the term `egregious violation' means--
       ``(A) a felony criminal violation for which the individual 
     was convicted; and
       ``(B) a civil violation where the individual willfully 
     committed such violation and the violation facilitated money 
     laundering or the financing of terrorism.''.

     SEC. 208. ADDITIONAL DAMAGES FOR REPEAT BANK SECRECY ACT 
                   VIOLATORS.

       (a) In General.--Section 5321 of title 31, United States 
     Code, as amended by section 208, is further amended by adding 
     at the end the following:
       ``(g) Additional Damages for Repeat Violators.--In addition 
     to any other fines permitted by this section and section 
     5322, with respect to a person who has previously been 
     convicted of a criminal provision of (or rule issued under) 
     the Bank Secrecy Act or who has admitted, as part of a 
     deferred- or non-prosecution agreement, to having previously 
     committed a violation of a criminal provision of (or rule 
     issued under) the Bank Secrecy Act, the Secretary may impose 
     an additional civil penalty against such person for each 
     additional such violation in an amount equal to up three 
     times the profit gained or loss avoided by such person as a 
     result of the violation.''.
       (b) Prospective Application of Amendment.--For purposes of 
     determining whether a person has committed a previous 
     violation under section 5321(g) of title 31, United States 
     Code, such determination shall only include violations 
     occurring after the date of enactment of this Act.

     SEC. 209. JUSTICE ANNUAL REPORT ON DEFERRED AND NON-
                   PROSECUTION AGREEMENTS.

       (a) Annual Report.--The Attorney General shall issue an 
     annual report, every year for the five years beginning on the 
     date of enactment of this Act, to the Committees on Financial 
     Services and the Judiciary of the House of Representatives 
     and the Committees on Banking, Housing, and Urban Affairs and 
     the Judiciary of the Senate containing--
       (1) a list of deferred prosecution agreements and non-
     prosecution agreements that the Attorney General has entered 
     into during the previous year with any person with respect to 
     a violation or suspected violation of the Bank Secrecy Act;
       (2) the justification for entering into each such 
     agreement;
       (3) the list of factors that were taken into account in 
     determining that the Attorney General should enter into each 
     such agreement; and
       (4) the extent of coordination the Attorney General 
     conducted with the Financial Crimes Enforcement Network prior 
     to entering into each such agreement.
       (b) Classified Annex.--Each report under subsection (a) may 
     include a classified annex.
       (c) Bank Secrecy Act Defined.--For purposes of this 
     section, the term ``Bank Secrecy Act'' has the meaning given 
     that term under section 5312 of title 31, United States Code.

     SEC. 210. RETURN OF PROFITS AND BONUSES.

       (a) In General.--Section 5322 of title 31, United States 
     Code, is amended by adding at the end the following:
       ``(e) Return of Profits and Bonuses.--A person convicted of 
     violating a provision of (or rule issued under) the Bank 
     Secrecy Act shall--
       ``(1) in addition to any other fine under this section, be 
     fined in an amount equal to the profit gained by such person 
     by reason of such violation, as determined by the court; and
       ``(2) if such person is an individual who was a partner, 
     director, officer, or employee of a financial institution at 
     the time the violation occurred, repay to such financial 
     institution any bonus paid to such individual during the 
     Federal fiscal year in which the violation occurred or the 
     Federal fiscal year after which the violation occurred.''.
       (b) Rule of Construction.--The amendment made by subsection 
     (a) may not be construed to prohibit a financial institution 
     from requiring the repayment of a bonus paid to a partner, 
     director, officer, or employee if the financial institution 
     determines that the partner, director, officer, or employee 
     engaged in unethical, but non-criminal, activities.

     SEC. 211. APPLICATION OF BANK SECRECY ACT TO DEALERS IN 
                   ANTIQUITIES.

       (a) In General.--Section 5312(a)(2) of title 31, United 
     States Code, is amended--
       (1) in subparagraph (Y), by striking ``or'' at the end;
       (2) by redesignating subparagraph (Z) as subparagraph (AA); 
     and
       (3) by inserting after subsection (Y) the following:
       ``(Z) a person trading or acting as an intermediary in the 
     trade of antiquities, including an advisor, consultant or any 
     other person who engages as a business in the solicitation of 
     the sale of antiquities; or''.
       (b) Study on the Facilitation of Money Laundering and 
     Terror Finance Through the Trade of Works of Art or 
     Antiquities.--
       (1) Study.--The Secretary of the Treasury, in coordination 
     with Federal Bureau of Investigation, the Attorney General, 
     and Homeland Security Investigations, shall perform a study 
     on the facilitation of money laundering and terror finance 
     through the trade of works of art or antiquities, including 
     an analysis of--
       (A) the extent to which the facilitation of money 
     laundering and terror finance through the trade of works of 
     art or antiquities may enter or affect the financial system 
     of the United States, including any qualitative data or 
     statistics;
       (B) whether thresholds and definitions should apply in 
     determining which entities to regulate;
       (C) an evaluation of which markets, by size, entity type, 
     domestic or international geographical locations, or 
     otherwise, should be subject to regulations, but only to the 
     extent such markets are not already required to report on the 
     trade of works of art or antiquities to the Federal 
     Government;
       (D) an evaluation of whether certain exemptions should 
     apply; and
       (E) any other points of study or analysis the Secretary 
     determines necessary or appropriate.
       (2) Report.--Not later than the end of the 180-day period 
     beginning on the date of the enactment of this Act, the 
     Secretary of the Treasury shall issue a report to the 
     Committee on Financial Services of the House of 
     Representatives and the Committee on Banking, Housing, and 
     Urban Affairs of the Senate containing all findings and 
     determinations made in carrying out the study required under 
     paragraph (1).
       (c) Rulemaking.--Not later than the end of the 180-day 
     period beginning on the date the Secretary issues the report 
     required under subsection (b)(2), the Secretary shall issue

[[Page H8500]]

     regulations to carry out the amendments made by subsection 
     (a).

     SEC. 212. GEOGRAPHIC TARGETING ORDER.

       The Secretary of the Treasury shall issue a geographic 
     targeting order, similar to the order issued by the Financial 
     Crimes Enforcement Network on November 15, 2018, that--
       (1) applies to commercial real estate to the same extent, 
     with the exception of having the same thresholds, as the 
     order issued by FinCEN on November 15, 2018, applies to 
     residential real estate; and
       (2) establishes a specific threshold for commercial real 
     estate.

     SEC. 213. STUDY AND REVISIONS TO CURRENCY TRANSACTION REPORTS 
                   AND SUSPICIOUS ACTIVITY REPORTS.

       (a) Currency Transaction Reports.--
       (1) CTR indexed for inflation.--
       (A) In general.--Every 5 years after the date of enactment 
     of this Act, the Secretary of the Treasury shall revise 
     regulations issued with respect to section 5313 of title 31, 
     United States Code, to update each $10,000 threshold amount 
     in such regulation to reflect the change in the Consumer 
     Price Index for All Urban Consumers published by the 
     Department of Labor, rounded to the nearest $100. For 
     purposes of calculating the change described in the previous 
     sentence, the Secretary shall use $10,000 as the base amount 
     and the date of enactment of this Act as the base date.
       (B) Exception.--Notwithstanding subparagraph (A), the 
     Secretary may make appropriate adjustments to the threshold 
     amounts described under subparagraph (A) in high-risk areas 
     (e.g., High Intensity Financial Crime Areas or HIFCAs), if 
     the Secretary has demonstrable evidence that shows a 
     threshold raise would increase serious crimes, such as 
     trafficking, or endanger national security.
       (2) GAO ctr study.--
       (A) Study.--The Comptroller General of the United States 
     shall carry out a study of currency transaction reports. Such 
     study shall include--
       (i) a review (carried out in consultation with the 
     Secretary of the Treasury, the Financial Crimes Enforcement 
     Network, the United States Attorney General, the State 
     Attorneys General, and State, Tribal, and local law 
     enforcement) of the effectiveness of the current currency 
     transaction reporting regime;
       (ii) an analysis of the importance of currency transaction 
     reports to law enforcement; and
       (iii) an analysis of the effects of raising the currency 
     transaction report threshold.
       (B) Report.--Not later than the end of the 1-year period 
     beginning on the date of enactment of this Act, the 
     Comptroller General shall issue a report to the Secretary of 
     the Treasury and the Congress containing--
       (i) all findings and determinations made in carrying out 
     the study required under subparagraph (A); and
       (ii) recommendations for improving the current currency 
     transaction reporting regime.
       (b) Modified SARs Study and Design.--
       (1) Study.--The Director of the Financial Crimes 
     Enforcement Network shall carry out a study, in consultation 
     with industry stakeholders (including money services 
     businesses, community banks, and credit unions), the Federal 
     functional regulators, State bank supervisors, and law 
     enforcement, of the design of a modified suspicious activity 
     report form for certain customers and activities. Such study 
     shall include--
       (A) an examination of appropriate optimal SARs thresholds 
     to determine the level at which a modified SARs form could be 
     employed;
       (B) an evaluation of which customers or transactions would 
     be appropriate for a modified SAR, including--
       (i) seasoned business customers;
       (ii) financial technology (Fintech) firms;
       (iii) structuring transactions; and
       (iv) any other customer or transaction that may be 
     appropriate for a modified SAR; and
       (C) an analysis of the most effective methods to reduce the 
     regulatory burden imposed on financial institutions in 
     complying with the Bank Secrecy Act, including an analysis of 
     the effect of--
       (i) modifying thresholds;
       (ii) shortening forms;
       (iii) combining Bank Secrecy Act forms;
       (iv) filing reports in periodic batches; and
       (v) any other method that may reduce the regulatory burden.
       (2) Study considerations.--In carrying out the study 
     required under paragraph (1), the Director shall seek to 
     balance law enforcement priorities, regulatory burdens 
     experienced by financial institutions, and the requirement 
     for reports to have a ``high degree of usefulness to law 
     enforcement'' under the Bank Secrecy Act.
       (3) Report.--Not later than the end of the 1-year period 
     beginning on the date of enactment of this Act, the Director 
     shall issue a report to Congress containing--
       (A) all findings and determinations made in carrying out 
     the study required under subsection (a); and
       (B) sample designs of modified SARs forms based on the 
     study results.
       (4) Contracting authority.--The Director may contract with 
     a private third-party to carry out the study required under 
     this subsection. The authority of the Director to enter into 
     contracts under this paragraph shall be in effect for each 
     fiscal year only to the extent and in the amounts as are 
     provided in advance in appropriations Acts.
       (c) Definitions.--For purposes of this section:
       (1) Bank secrecy act.--The term ``Bank Secrecy Act'' has 
     the meaning given that term under section 5312 of title 31, 
     United States Code.
       (2) Federal functional regulator.--The term ``Federal 
     functional regulator'' has the meaning given that term under 
     section 103.
       (3) Regulatory burden.--The term ``regulatory burden'' 
     means the man-hours to complete filings, cost of data 
     collection and analysis, and other considerations of chapter 
     35 of title 44, United States Code (commonly referred to as 
     the Paperwork Reduction Act).
       (4) SAR; suspicious activity report.--The term ``SAR'' and 
     ``suspicious activity report'' mean a report of a suspicious 
     transaction under section 5318(g) of title 31, United States 
     Code.
       (5) Seasoned business customer.--The term ``seasoned 
     business customer'', shall have 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, or is registered as, licensed by, 
     or otherwise eligible to do business within the United 
     States, a State, or political subdivision of a State;
       (B) has maintained an account with a financial institution 
     for a length of time as determined by the Secretary; and
       (C) meet such other requirements as the Secretary may 
     determine necessary or appropriate.
       (6) State bank supervisor.--The term ``State bank 
     supervisor'' has the meaning given that term under section 3 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813).

     SEC. 214. STREAMLINING REQUIREMENTS FOR CURRENCY TRANSACTION 
                   REPORTS AND SUSPICIOUS ACTIVITY REPORTS.

       (a) Review.--The Secretary of the Treasury (in consultation 
     with Federal law enforcement agencies, the Director of 
     National Intelligence, the Federal functional regulators, and 
     State bank supervisors and in consultation with other 
     relevant stakeholders) shall undertake a formal review of the 
     current financial institution reporting requirements under 
     the Bank Secrecy Act and its implementing regulations and 
     propose changes to further reduce regulatory burdens, and 
     ensure that the information provided is of a ``high degree of 
     usefulness'' to law enforcement, as set forth under section 
     5311 of title 31, United States Code.
       (b) Contents.--The review required under subsection (a) 
     shall include a study of--
       (1) whether the timeframe for filing a suspicious activity 
     report should be increased from 30 days;
       (2) whether or not currency transaction report and 
     suspicious activity report thresholds should be tied to 
     inflation or otherwise periodically be adjusted;
       (3) whether the circumstances under which a financial 
     institution determines whether to file a ``continuing 
     suspicious activity report'', or the processes followed by a 
     financial institution in determining whether to file a 
     ``continuing suspicious activity report'' (or both) can be 
     narrowed;
       (4) analyzing the fields designated as ``critical'' on the 
     suspicious activity report form and whether the number of 
     fields should be reduced;
       (5) the increased use of exemption provisions to reduce 
     currency transaction reports that are of little or no value 
     to law enforcement efforts;
       (6) the current financial institution reporting 
     requirements under the Bank Secrecy Act and its implementing 
     regulations and guidance; and
       (7) such other items as the Secretary determines 
     appropriate.
       (c) Report.--Not later than the end of the one year period 
     beginning on the date of the enactment of this Act, the 
     Secretary of the Treasury, in consultation with law 
     enforcement and persons subject to Bank Secrecy Act 
     requirements, shall issue a report to the Congress containing 
     all findings and determinations made in carrying out the 
     review required under subsection (a).
       (d) Definitions.--For purposes of this section:
       (1) Federal functional regulator.--The term ``Federal 
     functional regulator'' has the meaning given that term under 
     section 103.
       (2) State bank supervisor.--The term ``State bank 
     supervisor'' has the meaning given that term under section 3 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813).
       (3) Other terms.--The terms ``Bank Secrecy Act'' and 
     ``financial institution'' have the meaning given those terms, 
     respectively, under section 5312 of title 31, United States 
     Code.

                 TITLE III--MODERNIZING THE AML SYSTEM

     SEC. 301. ENCOURAGING INNOVATION IN BSA COMPLIANCE.

       Section 5318 of title 31, United States Code, as amended by 
     section 202, is further amended by adding at the end the 
     following:
       ``(p) Encouraging Innovation in Compliance.--
       ``(1) In general.--The Federal functional regulators shall 
     encourage financial institutions to consider, evaluate, and, 
     where appropriate, responsibly implement innovative 
     approaches to meet the requirements of this subchapter, 
     including through the use of innovation pilot programs.

[[Page H8501]]

       ``(2) Exemptive relief.--The Secretary, pursuant to 
     subsection (a), may provide exemptions from the requirements 
     of this subchapter if the Secretary determines such 
     exemptions are necessary to facilitate the testing and 
     potential use of new technologies and other innovations.
       ``(3) Rule of construction.--This subsection may not be 
     construed to require financial institutions to consider, 
     evaluate, or implement innovative approaches to meet the 
     requirements of the Bank Secrecy Act.
       ``(4) Federal functional regulator defined.--In this 
     subsection, the term `Federal functional regulator' means the 
     Board of Governors of the Federal Reserve System, the 
     Comptroller of the Currency, the Federal Deposit Insurance 
     Corporation, the National Credit Union Administration, the 
     Securities and Exchange Commission, and the Commodity Futures 
     Trading Commission.''.

     SEC. 302. INNOVATION LABS.

       (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. Innovation Labs

       ``(a) Establishment.--There is established within the 
     Department of the Treasury and each Federal functional 
     regulator an Innovation Lab.
       ``(b) Director.--The head of each Innovation Lab shall be a 
     Director, to be appointed by the Secretary of the Treasury or 
     the head of the Federal functional regulator, as applicable.
       ``(c) Duties.--The duties of the Innovation Lab shall be--
       ``(1) to provide outreach to law enforcement agencies, 
     State bank supervisors, financial institutions, and other 
     persons (including vendors and technology companies) with 
     respect to innovation and new technologies that may be used 
     to comply with the requirements of the Bank Secrecy Act;
       ``(2) to support the implementation of responsible 
     innovation and new technology, in a manner that complies with 
     the requirements of the Bank Secrecy Act;
       ``(3) to explore opportunities for public-private 
     partnerships; and
       ``(4) to develop metrics of success.
       ``(d) FinCEN Lab.--The Innovation Lab established under 
     subsection (a) within the Department of the Treasury shall be 
     a lab within the Financial Crimes Enforcement Network.
       ``(e) Definitions.--In this subsection:
       ``(1) Federal functional regulator.--The term `Federal 
     functional regulator' means the Board of Governors of the 
     Federal Reserve System, the Comptroller of the Currency, the 
     Federal Deposit Insurance Corporation, the National Credit 
     Union Administration, the Securities and Exchange Commission, 
     and the Commodity Futures Trading Commission.
       ``(2) State bank supervisor.--The term `State bank 
     supervisor' has the meaning given that term under section 3 
     of the Federal Deposit Insurance Act (12 U.S.C. 1813).''.
       (b) Clerical Amendment.--The table of contents for 
     subchapter II of chapter 53 of title 31, United States Code, 
     is amended by adding at the end the following:

``5333. Innovation Labs.''.

     SEC. 303. INNOVATION COUNCIL.

       (a) In General.--Subchapter II of chapter 53 of Title 31, 
     United States Code, as amended by section 302, is further 
     amended by adding at the end the following:

     ``Sec. 5334. Innovation Council

       ``(a) Establishment.--There is established the Innovation 
     Council (hereinafter in this section referred to as the 
     `Council'), which shall consist of each Director of an 
     Innovation Lab established under section 5334, a 
     representative of State bank supervisors (as defined under 
     section 3 of the Federal Deposit Insurance Act (12 U.S.C. 
     1813)), and the Director of the Financial Crimes Enforcement 
     Network.
       ``(b) Chair.--The Director of the Innovation Lab of the 
     Department of the Treasury shall serve as the Chair of the 
     Council.
       ``(c) Duty.--The members of the Council shall coordinate on 
     activities related to innovation under the Bank Secrecy Act, 
     but may not supplant individual agency determinations on 
     innovation.
       ``(d) Meetings.--The meetings of the Council--
       ``(1) shall be at the call of the Chair, but in no case may 
     the Council meet less than semi-annually;
       ``(2) may include open and closed sessions, as determined 
     necessary by the Council; and
       ``(3) shall include participation by public and private 
     entities and law enforcement agencies.
       ``(e) Report.--The Council shall issue an annual report, 
     for each of the 7 years beginning on the date of enactment of 
     this section, to the Secretary of the Treasury on the 
     activities of the Council during the previous year, including 
     the success of programs as measured by metrics of success 
     developed pursuant to section 5334(c)(4), and any regulatory 
     or legislative recommendations that the Council may have.''.
       (b) Clerical Amendment.--The table of contents for 
     subchapter II of chapter 53 of title 31, United States Code, 
     is amended by adding the end the following:

``5334. Innovation Council.''.

     SEC. 304. TESTING METHODS RULEMAKING.

       (a) In General.--Section 5318 of title 31, United States 
     Code, as amended by section 301, is further amended by adding 
     at the end the following:
       ``(q) Testing.--
       ``(1) In general.--The Secretary of the Treasury, in 
     consultation with the head of each agency to which the 
     Secretary has delegated duties or powers under subsection 
     (a), shall issue a rule to specify--
       ``(A) with respect to technology and related technology-
     internal processes (`new technology') designed to facilitate 
     compliance with the Bank Secrecy Act requirements, the 
     standards by which financial institutions are to test new 
     technology; and
       ``(B) in what instances or under what circumstance and 
     criteria a financial institution may replace or terminate 
     legacy technology and processes for any examinable technology 
     or process without the replacement or termination being 
     determined an examination deficiency.
       ``(2) Standards.--The standards described under paragraph 
     (1) may include--
       ``(A) an emphasis on using innovative approaches, such as 
     machine learning, rather than rules-based systems;
       ``(B) risk-based back-testing of the regime to facilitate 
     calibration of relevant systems;
       ``(C) requirements for appropriate data privacy and 
     security; and
       ``(D) a requirement that the algorithms used by the regime 
     be disclosed to the Financial Crimes Enforcement Network, 
     upon request.
       ``(3) Confidentiality of algorithms.--If a financial 
     institution or any director, officer, employee, or agent of 
     any financial institution, voluntarily or pursuant to this 
     subsection or any other authority, discloses the 
     institution's algorithms to a Government agency, such 
     algorithms and any materials associated with the creation of 
     such algorithms shall be considered confidential and not 
     subject to public disclosure.''.
       (b) Update of Manual.--The Financial Institutions 
     Examination Council shall ensure--
       (1) that any manual prepared by the Council is updated to 
     reflect the rulemaking required by the amendment made by 
     subsection (a); and
       (2) that financial institutions are not penalized for the 
     decisions based on such rulemaking to replace or terminate 
     technology used for compliance with the Bank Secrecy Act (as 
     defined under section 5312 of title 31, United States Code) 
     or other anti-money laundering laws.

     SEC. 305. FINCEN STUDY ON USE OF EMERGING TECHNOLOGIES.

       (a) Study.--
       (1) In general.--The Director of the Financial Crimes 
     Enforcement Network (``FinCEN'') shall carry out a study on--
       (A) the status of implementation and internal use of 
     emerging technologies, including artificial intelligence 
     (``AI''), digital identity technologies, blockchain 
     technologies, and other innovative technologies within 
     FinCEN;
       (B) whether AI, digital identity technologies, blockchain 
     technologies, and other innovative technologies can be 
     further leveraged to make FinCEN's data analysis more 
     efficient and effective; and
       (C) how FinCEN could better utilize AI, digital identity 
     technologies, blockchain technologies, and other innovative 
     technologies to more actively analyze and disseminate the 
     information it collects and stores to provide investigative 
     leads to Federal, State, Tribal, and local law enforcement, 
     and other Federal agencies (collective, ``Agencies''), and 
     better support its ongoing investigations when referring a 
     case to the Agencies.
       (2) Inclusion of gto data.--The study required under this 
     subsection shall include data collected through the 
     Geographic Targeting Orders (``GTO'') program.
       (3) Consultation.--In conducting the study required under 
     this subsection, FinCEN shall consult with the Directors of 
     the Innovations Labs established in section 302.
       (b) Report.--Not later than the end of the 6-month period 
     beginning on the date of the enactment of this Act, the 
     Director shall issue a report to the Committee on Banking, 
     Housing, and Urban Affairs of the Senate and the Committee on 
     Financial Services of the House of Representatives 
     containing--
       (1) all findings and determinations made in carrying out 
     the study required under subsection (a);
       (2) with respect to each of subparagraphs (A), (B) and (C) 
     of subsection (a)(1), any best practices or significant 
     concerns identified by the Director, and their applicability 
     to AI, digital identity technologies, blockchain 
     technologies, and other innovative technologies with respect 
     to U.S. efforts to combat money laundering and other forms of 
     illicit finance; and
       (3) any policy recommendations that could facilitate and 
     improve communication and coordination between the private 
     sector, FinCEN, and Agencies through the implementation of 
     innovative approaches, in order to meet their Bank Secrecy 
     Act (as defined under section 5312 of title 31, United States 
     Code) and anti-money laundering compliance obligations.

     SEC. 306. DISCRETIONARY SURPLUS FUNDS.

       (a) In General.--The dollar amount specified under section 
     7(a)(3)(A) of the Federal Reserve Act (12 U.S.C. 
     289(a)(3)(A)) is reduced by $27,000,000.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on September 30, 2029.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from

[[Page H8502]]

Georgia (Mr.   David Scott) and the gentlewoman from Missouri (Mrs. 
Wagner) each will control 20 minutes.
  The Chair recognizes the gentleman from Georgia.


                             General Leave

  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I ask unanimous consent that 
all Members may 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 
gentleman from Georgia?
  There was no objection.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I yield myself such time as 
I may consume.
  In recent weeks, we have had the opportunity to discuss the valuable 
anti-money laundering aspects of the COUNTER Act of 2019, H.R. 2514, 
introduced by the gentleman from Missouri (Mr. Cleaver).
  This important piece of legislation is the first major reform in the 
United States anti-money laundering regime since 2001 and makes 
critical changes to close loopholes and ensure better enforcement of 
this country's AML and Bank Secrecy Act laws.
  Today, I would like to highlight how this bill also addresses the 
costs and burdens of the Bank Secrecy Act and anti-money laundering 
compliance for smaller financial institutions, including credit unions 
and community banks.
  This bill includes multiple avenues to improve information-sharing 
and feedback loops, including new programs of domestic liaisons for the 
Financial Crime Enforcement Network of FinCEN, sending FinCEN officials 
to the field to connect directly with financial institutions.
  It also makes permanent the FinCEN Exchange program, allowing for 
more robust exchange of threat information and analysis among 
participants. It revives the popular ``SAR Activity Review,'' which was 
a FinCEN publication that provided timely threat detection information, 
which will help banks to better direct their resources, and result in 
more efficient and effective collection of information from both banks 
and law enforcement.
  The COUNTER Act also codifies the Federal financial regulators' 
guidance to encourage resource-sharing among similar institutions.
  Mr. Speaker, we heard from many smaller institutions that they were 
more apt to invest in resource-sharing if they knew that the permission 
to do so wouldn't change with new directors or administrations.
  The bill also raises the Currency Transaction Reports threshold, 
increasing it every 5 years, pegged to inflation. This is a key issue 
for smaller institutions and addresses their concerns, while balancing 
the investigative needs of law enforcement.
  Further focused on the compliance burden, this bill requires FinCEN, 
working with industry and law enforcement, to consider the design of a 
shortened, modified Suspicious Activity Report, or SAR, form for 
certain customers and activities.
  These reforms are among the reasons that the National Association of 
Federally Insured Credit Unions, the Independent Community Bankers of 
America, the Credit Union National Association, all of the State 
banking associations, and many, many others have expressed support for 
this important bill.
  Overall, I believe that the COUNTER Act of 2019 is a significant step 
forward for small businesses, law enforcement, and other stakeholders.
  I want to thank Mr. Cleaver for introducing this bill, and I want to 
thank our Republican colleagues for working collaboratively with a team 
effort to refine this legislation, for this is truly a bipartisan bill, 
ensuring that this bill passed out of the Financial Services Committee 
with a unanimous 55-0 vote.
  Mr. Speaker, I reserve the balance of my time.
  Mrs. WAGNER. Mr. Speaker, I yield myself such time as I may consume.
  I appreciate the majority moving H.R. 2514, the COUNTER Act of 2019, 
again, this week, as a standalone piece of legislation.
  Both Republicans and Democrats agree, protecting the financial system 
from bad actors is a priority. We must give financial institutions the 
tools and resources they need to fight these bad actors.
  According to a 2016 report by the U.S. Government Accountability 
Office, from January 2009 to December 2015, Federal agencies assessed 
roughly $5.1 billion in fines, forfeitures, and penalties for 
violations of the Bank Secrecy Act and anti-money laundering 
regulations, often referred to as BSA/AML.
  A separate 2016 analysis of anti-money laundering enforcement found 
that penalties and fines for BSA violations significantly increased 
since the 2008 financial crisis. This report concluded that regulators 
had become more aggressive in pursuing BSA violations in the wake of 
the crisis.
  However, this data is from 2016. We know that the current enforcement 
regime is outdated. Technology has outpaced the tools and resources 
available to Federal agencies to pursue these bad actors.
  H.R. 2514 makes important changes to strengthen BSA and AML 
enforcement. The bill includes key aspects of the BSA/AML reform 
package from last Congress, including a provision that allows for 
tailored information-sharing by financial institutions with their 
foreign branches to better identify suspicious activity.
  The bill also includes important updates to the reporting thresholds 
for Suspicious Activities Reports, or SARs.
  H.R. 2514 reforms the SAR framework by requiring the Financial Crimes 
Enforcement Network to carry out a study examining whether the current 
SAR thresholds are adequate.
  This study will provide the necessary data to alter the current SAR 
filing regime in the future. There is clearly a recognition on both 
sides of the aisle that the status quo is unacceptable.
  The bill also encourages greater innovation, ensures efficiency, and 
requires treasury to play a prominent role in coordinating AML policy. 
These measures will help ensure that the most effective AML policies 
are being used to stop terrorists and bad actors.

  I want to thank the gentleman from Missouri (Mr. Cleaver) and the 
gentleman from Ohio (Mr. Stivers) for all their hard work and effort on 
this bill.
  Additionally, I want to thank the gentleman from Missouri (Mr. 
Luetkemeyer), the gentleman from Virginia (Mr. Riggleman), and the 
gentleman from Ohio (Mr. Gonzalez).
  Mr. Speaker, their priorities have made the bill stronger, and more 
focused, which will enable the Treasury Department and other Federal 
agencies to carry out critical anti-money laundering processes.
  I encourage my colleagues to support H.R. 2514, and I yield back the 
balance of my time.
  Mr. DAVID SCOTT of Georgia. Mr. Speaker, I yield myself the balance 
of my time.
  This is a very critical piece of legislation for our financial 
services industry that will help close loopholes in existing law, and 
prevent criminals, prevent terrorists, and other bad state actors from 
escaping the United States Anti-Money Laundering and Counter-Threat 
Finance laws; it is badly needed, and that is why this is so important.
  I am proud to stand up to support small businesses here today, while 
we are making important and necessary updates to these regimes.
  I would especially like to congratulate my colleague from Missouri, 
Mr. Cleaver, the chairman of the House Committee on Financial Services, 
National Security, International Development, and Monetary Policy 
Subcommittee for introducing this bill.
  A champion of small business himself, Mr. Cleaver has diligently 
engaged stakeholders, including government, industry, nongovernmental 
organizations, and Members from across the political spectrum on the 
text that we vote on here today. The result is this comprehensive bill 
with broad bipartisan support.
  I urge my colleagues to join me in supporting this important piece of 
legislation.
  Mr. Speaker, I yield back the balance of my time.

                              {time}  1700

  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Georgia (Mr.   David Scott) that the House suspend the 
rules and pass the bill, H.R. 2514, as amended.

[[Page H8503]]

  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________