[Congressional Record (Bound Edition), Volume 153 (2007), Part 2]
[House]
[Pages 1942-1946]
[From the U.S. Government Publishing Office, www.gpo.gov]




              SEASONED CUSTOMER CTR EXEMPTION ACT OF 2007

  Mr. FRANK of Massachusetts. Madam Speaker, I move to suspend the 
rules and pass the bill (H.R. 323) to amend section 5313 of title 31, 
United States Code, to reform certain requirements for reporting cash 
transactions, and for other purposes.
  The Clerk read as follows:

                                H.R. 323

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Seasoned Customer CTR 
     Exemption Act of 2007''.

     SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION REPORTS FOR 
                   SEASONED CUSTOMERS.

       (a) Findings.--The Congress finds as follows:
       (1) The completion of and filing of currency transaction 
     reports under section 5313 of title 31, United States Code, 
     poses a compliance burden on the financial industry.
       (2) Due to the nature of the transactions or the persons 
     and entities conducting such transactions, some reports as 
     currently filed may not be relevant to the detection, 
     deterrence, or investigation of financial crimes, including 
     money laundering and the financing of terrorism.
       (3) However, the data contained in such reports can provide 
     valuable context for the analysis of other data derived 
     pursuant to subchapter II of chapter 53 of title 31, United 
     States Code, as well as investigative data, which provide 
     invaluable and indispensable information supporting efforts 
     to combat money laundering and other financial crimes.
       (4) An appropriate exemption process from the reporting 
     requirements for certain currency transactions that are of 
     little or no value to ongoing efforts of law enforcement 
     agencies, financial regulatory agencies, and the financial 
     services industry to investigate, detect, or deter financial 
     crimes would continue to fulfill the compelling need to 
     produce and provide meaningful information to policy-makers, 
     financial regulators, law enforcement, and intelligence 
     agencies, while potentially lowering the compliance burden 
     placed on financial institutions by the need to file such 
     reports.
       (5) The Secretary of the Treasury has by regulation, and in 
     accordance with section 5313 of title 31, United States Code, 
     implemented a process by which institutions may seek 
     exemptions from filing certain currency transaction reports 
     based on appropriate circumstances; however, the financial 
     industry has not taken full advantage of these provisions and 
     has contended that they are unduly burdensome.
       (6) The act of providing notice to the Secretary of the 
     Treasury of designations of exemption--
       (A) provides meaningful information to law enforcement 
     officials on exempt customers and enables law enforcement to 
     obtain account information through appropriate legal process; 
     and
       (B) complements other sections of title 31, United States 
     Code, whereby law enforcement can locate financial 
     institutions with relevant records relating to a person of 
     investigative interest, such as information requests made 
     pursuant to regulations implementing section 314(a) of the 
     USA PATRIOT Act of 2001.
       (7) A designation of exemption has no effect on 
     requirements for depository institutions to apply the full 
     range of anti-money laundering controls required under 
     subchapter II of chapter 53 of title 31, United States Code, 
     and related provisions of law, including the requirement to 
     apply the customer identification program pursuant to section 
     5326 of such title, and the requirement to identify, monitor, 
     and, if appropriate, report suspicious activity in accordance 
     with section 5318(g) of such title.
       (8) The Federal banking agencies and the Financial Crimes 
     Enforcement Network have recently provided guidance through 
     the Federal Financial Institutions Examination Council Bank 
     Secrecy Act/Anti-Money Laundering Examination Manual on 
     applying appropriate levels of due diligence and identifying 
     suspicious activity by the types of cash-intensive businesses 
     that generally will be subject to exemption.
       (b) Seasoned Customer Exemption.--Section 5313(e) of title 
     31, United States Code, is amended to read as follows:
       ``(e) Qualified Customer Exemption.--
       ``(1) In general.--Before the end of the 270-day period 
     beginning on the date of the enactment of the Seasoned 
     Customer CTR Exemption Act of 2007, the Secretary of the 
     Treasury shall prescribe regulations that exempt any 
     depository institution from filing a report pursuant to this 
     section in a transaction for the payment, receipt, or 
     transfer of United States coins or currency (or other 
     monetary instruments the Secretary of the Treasury 
     prescribes) with a qualified customer of the depository 
     institution.
       ``(2) Qualified customer defined.--For purposes of this 
     section, the term `qualified customer', with respect to a 
     depository institution, has such meaning as the Secretary of 
     the Treasury shall prescribe, which shall include any person 
     that--
       ``(A) is incorporated or organized under the laws of the 
     United States or any State, including a sole proprietorship 
     (as defined in 31 C.F.R. 103.22(d)(6)(vii), as in effect on 
     January 4, 2007), or is registered as and eligible to do 
     business within the United States or a State;
       ``(B) has maintained a deposit account with the depository 
     institution for at least 12 months; and
       ``(C) has engaged, using such account, in multiple currency 
     transactions that are subject to the reporting requirements 
     of subsection (a).
       ``(3) Regulations.--
       ``(A) In general.--The Secretary of the Treasury shall 
     prescribe regulations requiring a depository institution to 
     file a 1-time notice of designation of exemption for each 
     qualified customer of the depository institution.
       ``(B) Form and content of exemption notice.--The Secretary 
     shall by regulation prescribe the form, manner, content, and 
     timing of the qualified customer exemption notice and such 
     notice shall include information sufficient to identify the 
     qualified customer and the accounts of the customer.
       ``(C) Authority of secretary.--
       ``(i) In general.--The Secretary may suspend, reject, or 
     revoke any qualified customer exemption notice, in accordance 
     with criteria prescribed by the Secretary by regulation.
       ``(ii) Conditions.--The Secretary may establish conditions, 
     in accordance with criteria prescribed by regulation, under 
     which exempt qualified customers of an insured depository 
     institution that is merged with or

[[Page 1943]]

     acquired by another insured depository institution will 
     continue to be treated as designated exempt qualified 
     customers of the surviving or acquiring institution.''.
       (c) 3-Year Review and Report.--Before the end of the 3-year 
     period beginning on the date of the enactment of this Act, 
     the Secretary of the Treasury, in consultation with the 
     Attorney General, the Secretary of Homeland Security, the 
     Federal banking agencies, the banking industry, and such 
     other persons as the Secretary deems appropriate, shall 
     evaluate the operations and effect of the provisions of the 
     amendment made by subsection (a) and make recommendations to 
     Congress as to any legislative action with respect to such 
     provision as the Secretary may determine to be appropriate.

     SEC. 3. PERIODIC REVIEW OF REPORTING THRESHOLD AND ADJUSTMENT 
                   FOR INFLATION.

       Section 5318 of title 31, United States Code, is amended by 
     adding at the end the following new subsection:
       ``(o) Periodic Review of Reporting Threshold and Adjustment 
     for Inflation.--
       ``(1) In general.--Before the end of the 90-day period 
     beginning on the date of the enactment of the Seasoned 
     Customer CTR Exemption Act of 2007 and at least every 5 years 
     after the end of such period, the Secretary of the Treasury 
     shall--
       ``(A) review the continuing appropriateness, relevance, and 
     utility of each threshold amount or denomination established 
     by the Secretary, in the Secretary's discretion, for any 
     report required by the Secretary under this subchapter; and
       ``(B) adjust each such amount, at such time and in such 
     manner as the Secretary considers appropriate, for any 
     inflation that the Secretary determines has occurred since 
     the date any such amount was established or last adjusted, as 
     the case may be.
       ``(2) Report.--Before the end of the 60-day period 
     beginning upon the completion of any review by the Secretary 
     of the Treasury under paragraph (1), the Secretary shall 
     submit a report to the Congress containing the findings and 
     conclusions of the Secretary in connection with such review, 
     together with an explanation for any adjustment, or lack of 
     adjustment, of any threshold amount or denomination by the 
     Secretary as a result of such review, including the 
     adjustment for inflation.''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Massachusetts (Mr. Frank) and the gentleman from Alabama (Mr. Bachus) 
each will control 20 minutes.
  The Chair recognizes the gentleman from Massachusetts.


                             General Leave

  Mr. FRANK of Massachusetts. Madam Speaker, I ask unanimous consent 
that all Members may have 5 legislative days in which to express 
themselves on this and to include therein extraneous material.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Massachusetts?
  There was no objection.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield myself such time 
as I may consume.
  Madam Speaker, this is an example of sensible regulation because 
sensible regulation includes deregulation when that is appropriate.
  The Committee on Financial Services reported this bill out last year. 
It passed the House. Surprisingly it managed not to make it through the 
Senate. The efficiency of that body failed us on this occasion 
apparently, but we are going to try again.
  We believe in regulation, and this is an important area where we 
provide information to our financial detectives, and it is especially 
important with regard to terrorist financing.
  But too much regulation can defeat the purpose for which regulation 
is intended, and we have a situation now where the banks are required 
to report every year on customers' transactions of $10,000 or more. 
Now, one of the things this bill would do is give the Secretary of the 
Treasury the authority to increase a dollar figure that has been left 
unadjusted for inflation for too long.
  More importantly, we are talking now about the exemption that is 
given to what we call seasoned customers of the bank. When the banks 
are dealing, and this is particularly important for our community 
bankers, when they are dealing with people whom they know, with whom 
they have had regular and continuing relationships, having to report 
every time they do a transaction of $10,000 or more generates extra 
work for the bank, and I believe, if anything, interferes with the 
ability of the regulators to find what they should be looking for.
  If we are telling people to find needles, we should not set about 
building them bigger haystacks. What this bill says is that where we 
are talking about regular customers, regular seasoned customers, they 
can apply for the exemption, which is in the control of the Secretary 
of the Treasury, with careful criteria.
  And having received that exemption, as long as they remain seasoned 
customers of the same bank, that process does not have to be repeated 
every 2 years. It reduces the regulatory burden on banks, and it is 
particularly important to small banks.
  I would ask at this point, Madam Speaker, under my general leave to 
include a letter to myself and the gentleman from Alabama from 
America's Community Bankers strongly endorsing this bill.

                                  America's Community Bankers,

                                 Washington, DC, January 22, 2007.
     Hon. Barney Frank,
     Chairman, Financial Services Committee, House of 
         Representatives Washington, DC.
     Hon. Spencer Bachus,
     Ranking Member, Financial Services Committee, House of 
         Representatives Washington, DC.
       Dear Chairman Frank and Ranking Member Bachus: America's 
     Community Bankers is pleased to support H.R. 323, the 
     Seasoned Customer CTR Exemption Act of 2007. The legislation 
     would make important improvements to the current exemption 
     system for cash transaction reports (CTRs) by making it 
     easier to exempt the routine transactions of certain seasoned 
     business customers. H.R. 323 would more appropriately balance 
     the cost and benefits of the Bank Secrecy Act's CTR reporting 
     requirements. The legislation would also reduce the number of 
     CTRs filed on routine transactions of well-known, law abiding 
     customers.
       We urge the full House of Representatives to adopt H.R. 323 
     and look forward to working with you to enact this important 
     legislation.
       While we fully support H.R. 323, we urge the Committee to 
     modernize the Bank Secrecy Act further by increasing the 
     $10,000 threshold that triggers CTR filing. This threshold 
     has not been updated since 1970. Increasing the $10,000 
     trigger would more appropriately balance the reporting 
     obligations of depository institutions and the information 
     needs of law enforcement agencies.
           Sincerely,

                                              Robert R. Davis,

                             Executive Vice President and Managing
                                   Director, Government Relations.

                              {time}  1245

  What this will do is to reduce the paperwork burden on the banks; it 
will ease the burden on the regulators. It will not diminish in any way 
the flow of information that is needed for those whose job it is to 
keep us safe.
  Madam Speaker, I reserve the balance of my time.
  Mr. BACHUS. Madam Speaker, I yield 3 minutes to the gentleman from 
Texas (Mr. Hensarling).
  Mr. HENSARLING. Madam Speaker, I thank the gentleman for yielding. I 
certainly thank him for his leadership in this area to remove some 
unneeded regulation on our financial institutions. I also want to thank 
our new chairman, the gentleman from Massachusetts, for his steadfast 
support on this issue as well.
  Madam Speaker, current Federal regulations require financial 
institutions to file a currency transaction report with the IRS for any 
customer transaction over $10,000 during a business day.
  We all know that these CTRs, as they are called, are designed to help 
our Federal law enforcement thwart money laundering and other illegal 
activities; but the problem is that this $10,000 threshold which was 
set in 1970 is so low in the existing exemption process, so cumbersome 
and costly that it is causing banks to repeatedly file CTRs for many of 
their known and expected regular business transactions for their well-
known customers.
  And it doesn't matter if that business has been a so-called 
``seasoned customer'' for the financial institution for 5, 10, 15 or 
even 20 years. Right now it is simply too difficult for our financial 
institutions to apply for exemptions for our customers that they know 
are not a risk. So this forces, Madam Speaker, our financial 
institutions to file CTRs when they know the customer is not a risk 
just to protect themselves from legal liability or potential large 
fines.

[[Page 1944]]

  And so when law enforcement is looking for a needle in a haystack, 
our financial institutions are being asked to put more hay on the stack 
and they are being told to pay for it by taking money away from their 
local communities that otherwise could be used for local lending. If 
the financial institutions passed these CTR compliance costs on to 
customers, through higher fees or higher interest rates, it makes it 
more difficult for American citizens to save for retirement, finance a 
child's college education, or launch a small business that creates 
jobs.
  This bill, which I have long supported, will fix this problem by 
clarifying the existing CTRs filing exemption for seasoned customers. 
And as a result of this legislation, when passed, a number of the 13 
million-plus CTRs filed annually would stop, allowing banks to devote 
more of their resources to improving other suspicious activity 
reporting.
  The fact remains, Madam Speaker, when we come across a regulation 
like this, if we cannot determine a compelling reason for it to exist 
in the modern marketplace, we have a duty to either modify it or 
eliminate it, and that is what we are doing today.
  Congress today can help reduce the cost of banking for customers 
without jeopardizing critical law enforcement goals. I urge all of my 
colleagues to support this important bill.
  Mr. FRANK of Massachusetts. Madam Speaker, I reserve the balance of 
my time.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Ohio (Mr. Gillmor).
  Mr. GILLMOR. I thank the gentleman for yielding. I would also like to 
thank my colleagues on the Financial Services Committee for their 
diligence on this legislation.
  This much-needed regulatory relief provision will help reduce 
unnecessary paperwork for both banks and for their regulators. And by 
granting an exemption from currency transaction report requirements for 
seasoned customers, this legislation seeks to streamline the filing of 
CTRs, which is a critical tool for our law enforcement officials.
  There is little doubt that our regulatory structure has contributed 
to the United States being the model for the world when it comes to 
financial services; but without constant attention to the burdens of 
outdated rules and regulations, our markets can be weighted down by 
unnecessary costs.
  I am pleased to see that Congress is tackling the issues of the 
regulatory burden early in this session, and I look forward to working 
with Chairman Frank, Chairman Maloney, and Ranking Member Bachus and 
the other members to look for ways to find sensible regulatory relief 
for our banks, our thrifts, and our credit unions.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
New Jersey.
  Mr. GARRETT of New Jersey. I thank the gentleman.
  I, too, rise today in support of H.R. 323, the Seasoned Customer CTR 
Exemption Act of 2007, legislation which seeks to reduce the regulatory 
burden caused by the previous Bank Secrecy Act and does so by 
simplifying exemptions for financial institutions, banks, for example, 
in their currency transaction reports, their CTRs, on seasoned 
customers.
  You know, while well-intentioned CTRs have imposed a tremendous 
regulatory burden on financial institutions without a corresponding 
increase in benefit to our efforts to thwart terrorist attacks, for the 
most part law enforcement agencies have found these reports to be 
largely useless in the prevention of crimes and terrorist attacks, 
while banks have found the filing costs and regulatory burden they 
create enormous.
  Currency transaction reports were created to follow any large 
transaction through the banking industry to catch money laundering 
before it became a fait accompli, but the provision that created them 
is now outdated. What was considered a large amount of money back in 
1970 is hardly so today; in fact, the threshold for filing a CTR is 
$10,000, which in today's term is close to $50,000.
  So with the provisions caught in time, banks are now locked in a 
situation by which they are filing CTRs for many everyday transactions; 
and because of the frequency of these filings, paper overflows and the 
actual tracking of criminal activity is severely hampered. Potentially 
criminal transactions that should be setting all alarms with the banks 
and law enforcement agencies are drowned out in a sea of paperwork.
  This legislation then is a good start towards helping reduce 
regulatory burdens on our Nation's banks and financial institutions, 
and I therefore encourage all of my colleagues to support this 
important legislation.
  Mr. BACHUS. Madam Speaker, I yield 2 minutes to the gentleman from 
Texas (Mr. Neugebauer).
  Mr. NEUGEBAUER. Madam Speaker, I rise today in support of H.R. 323, 
the Seasoned Customer CTR Exemption Act.
  I appreciate the work of Chairman Frank and Ranking Member Bachus to 
introduce this legislation and get it on the floor quickly in this 
Congress.
  The last Congress succeeded in passing some much-needed and long 
overdue regulatory relief for some of our financial institutions. 
Unfortunately, the provisions that originally were passed in this body 
as related to the CTR exemption were not included in that very 
important legislation.
  In passing H.R. 323 today, the House is saying once more that we 
believe financial institutions, their customers and national security 
will be better served by exempting institutions from filing CTRs for 
their very qualified and seasoned customers.
  Banks in my district have been telling me for the past few years that 
this legislation is needed. They tell us about the countless staff 
hours that it takes to file reports for customers that they have had 
relationships with for 20, 30 and 40 years just to be in compliance 
with the current regulation.
  Under H.R. 323, instead of filing a form every time one of their 
long-standing seasoned customers comes in with a transaction over 
$10,000, they will file a one-time exemption for that customer to be 
recognized as a seasoned and qualified customer. I think that makes 
more sense for the American people. I think it makes more sense to use 
common sense.
  Someone told me recently that the District of Columbia geographically 
is a 10-square-mile area, some have said it is a 10-square-mile logic-
free environment. Well, we have an opportunity to overcome that feeling 
today by bringing some logic to the way we handle these cash 
transactions.
  I urge my colleagues to support H.R. 323. Let's bring some common 
sense and logic back into the way government handles national security 
and recognize that banks and their seasoned customers, those 
relationships are long-standing and that time would be better served in 
looking at other opportunities.
  Mr. FRANK of Massachusetts. Madam Speaker, I reserve the balance of 
my time.
  Mr. BACHUS. Madam Speaker, I yield to myself such time as I may 
consume.
  I want to take this occasion to first thank Mr. Frank and 
congratulate him. I think this is the first piece of legislation that 
he is bringing to the floor in his capacity as the new chairman of the 
Financial Services Committee. I congratulate you on your appointment to 
that important position, Mr. Frank.
  Mr. FRANK of Massachusetts. I thank the gentleman, and if the 
gentleman would yield.
  Mr. BACHUS. Yes, I would yield.
  Mr. FRANK of Massachusetts. I would certainly recommend the way this 
bill is being treated and received on both sides as a precedent that I 
hope will be followed.
  Mr. BACHUS. That sounds very good to me.
  I do want to thank you for this piece of legislation because I think 
it is both a predictor of the past in that this committee has worked in 
a bipartisan way to do the right thing for both the customers of 
financial services and for the financial services institutions. And I 
am very optimistic that we will continue to work together.
  I am going to yield back the balance of my time. I have about a five-
page

[[Page 1945]]

statement that I will spare the body having to listen to.
  I do want to say this: last year this legislation came up, a similar 
legislation to this, both in March and July of last year; so this is 
basically our third shot in less than a year. It amends the Bank 
Secrecy Act; it amends specifically the part of that act dealing with 
currency transaction reports. It does not amend the part dealing with 
suspicious activity reports. They will continue to report to the 
different law enforcement agencies. What this will affect is your drug 
stores, your grocery stores, your retail outlets, who every day are 
filing these reports.
  It is estimated by the Financial Crimes Enforcement Network that the 
cost of these alone is 25 minutes spent filing each one of these 
reports. So this is going to be a tremendous burden taken away from 
them. The American Banking Association said that it will result in a 
savings of $187 million annually.
  I rise in strong support of H.R. 323, The Seasoned Customer CTR 
Exemption Act of 2007.
  H.R. 323, which I introduced with Chairman Frank, simplifies the 
process by which financial institutions may be exempted from filing 
currency transaction reports, CTRs, for seasoned customers while still 
ensuring valuable information is passed on to law enforcement.
  Twice last year, legislation similar to H.R. 323 passed the House 
overwhelmingly: H.R. 5341, the Seasoned Customer CTR Exemption Act of 
2006 passed the House by voice vote last July. In addition, the 
language was included in the House-passed version of regulatory relief 
legislation--H.R. 3505--which passed the House last March by a vote of 
415-2.
  H.R. 323 seeks to reduce regulatory burden caused by the Bank Secrecy 
Act. Specifically, the legislation requires regulators to promulgate 
new regulations and streamline the process by which financial 
institutions may be exempted from filing CTRs for seasoned customers. 
CTRs are required to be filed for cash transactions of $10,000 and 
above. This filing is required even in the case of seasoned customers--
long-time bank customers that routinely deal in large volumes of cash, 
but whose business dealings are well-enough understood to rule out the 
possibility of money laundering or the financing of terror.
  The Financial Crimes Enforcement Network, FinCEN, which administers 
the Bank Secrecy Act, received over 12 million CTRs in 2005. According 
to a survey conducted by the Treasury Department, more than 30 percent 
of these CTRs were on recurring customer transactions that were 
eligible for exemption for filing under existing rules.
  Unfortunately, the current process by which a financial institution 
can exempt seasoned customers is rarely invoked because it is difficult 
to understand, needlessly cumbersome, and subject to redundant 
renewals.
  The filing of these superfluous forms imposes an unnecessary cost on 
both the financial services industry and the law enforcement community.
  With respect to the financial services industry, according to data 
released last year the number of CTRs filed on an annual basis now tops 
13.1 million. Even FinCEN's conservative estimate of around 25 minutes 
per report for filing and recordkeeping indicates the banking industry 
as a whole devoted about 5.5 million staff hours to handling CTRs in 
2005.
  Based on a survey by the American Bankers Association, the industry 
paid around $187 million in wages for this staff time.
  A typical bank with $2 billion of assets filed 1,400 CTRs in 2005. 
These filings took 583 staff-hours, with 438 of the staffhours simply 
to report on long-standing customers.
  With respect to the law enforcement community, not only do these 
superfluous reports add nothing to its efforts, they actually make it 
more difficult for the law enforcement community to track suspicious 
activity by requiring it to wade through millions of pages of 
unnecessary paperwork.
  The Government Accountability Office, GAO, the Internal Revenue 
Service, IRS, and FinCEN have all recommended that the number of CTRs 
be reduced by 30 to 40 percent by simply exempting large well-
established customers or so-called seasoned customers.
  In 1994, the GAO published a report which concluded, based upon an 
extensive analysis of CTRs, that the volume of reports could be 
substantially reduced without jeopardizing law enforcement priorities. 
According to that report, in 1993 the IRS, which administers the CTR 
program, stated that 30 to 40 percent of these reports of routine 
deposits by large, well-established retail businesses have no 
likelihood of identifying potential money laundering or other currency 
violations.
  William Fox, who headed up FinCEN from 2003 to 2006, testified as 
follows before our Committee:

       We know that some of the currency transaction reports filed 
     by financial institutions are of little relevance in the 
     investigation of financial crimes. We also know that 
     depository institutions, especially our community banks, 
     identify the time and expense of filing CTRs as the number 
     one regulatory expense. It is clear that our efforts to 
     encourage the exemption of routine filings on certain 
     customers has not brought about the reductions of filings 
     that were sought.

  H.R. 323 will reduce the number of CTRs by clarifying the exemption 
process, thereby freeing financial institutions from having to file 
CTRs for routine cash transactions with their long- time customers, 
i.e. supermarkets, fast food restaurants or warehouse stores. This will 
enable law enforcement to target its resources on CTRs where criminal 
or terrorist activity is suspected. Moreover, under the legislation, 
banks will still be required to report suspicious transactions engaged 
in by exempted businesses pursuant to the Suspicious Activity Reporting 
regime administered by FinCEN.
  Let me close by thanking Chairman Frank, Congressman Hensarling, 
Congressman Moore, Congressman Renzi, Congresswoman Hooley, and 
Congresswoman Maloney for all of their work on this legislation. Since 
this is the first bill that the gentleman from Massachusetts has 
brought to the floor in his capacity as Chairman of the Financial 
Services Committee, I want to congratulate him on his appointment, and 
tell him that I look forward to working with him to build on the record 
of bipartisan legislative accomplishments that our Committee has 
compiled over the past several Congresses.
  Finally, let me also thank Former FinCEN Director Fox, who deserves a 
lot of credit for his work on this issue. I look forward to working 
with the Senate and the new FinCEN Director to ensure that this 
important legislation is signed into law.
  Ms. HIRONO. Madam Speaker, I rise in strong support of H.R. 323, the 
Seasoned Customer CTR Exemption Act. This bill eliminates a no-longer-
necessary regulatory requirement which increases the costs of doing 
business for hundreds of financial institutions and their customers who 
ultimately bear the cost of this regulation.
  H.R. 323 provides long overdue relief for our financial institutions 
from the requirement of keeping records and filing reports called 
Currency Transaction Reports (CTRs) to the Treasury Department for any 
financial transaction valued in excess of $10,000.00.
  While the original purpose of the regulation, to identify suspected 
money laundering activities, was a commendable tool for Federal 
prosecutors, its utility has been adequately replaced since 1996 by the 
filing of Suspicious Activity Reports required by Treasury Department's 
Financial Crimes Enforcement Network. The CTRs are no longer the 
primary tool to identify suspected money laundering activities but 
banks must still file these reports, unless an exemption is given by 
the Department to certain ``qualified business customers.'' The 
exemption procedures, however, have been found to be difficult to 
understand, cumbersome and still required the banks to obtain annual 
renewals.
  This legislation will allow by statute the Treasury Department to 
issue regulations that would permit depository institutions to apply 
for an exemption from the requirement to file CTRs on a ``qualified 
customer.'' The bill defines a qualified customer as any business 
organized or incorporated under state or federal law that has 
maintained a deposit account with the institution for at least twelve 
months and engaged in multiple currency transactions otherwise subject 
to the reporting requirement.
  An estimated 30 percent of the 12 million CTRs received by the 
Treasury Department were filed on recurring customer transactions that 
were eligible for exemption under the current law. This bill will 
relieve financial institutions of the costly and unnecessary 
requirement to file CTRs in those instances and allow them to file a 
one-time notice of exemption for each qualified customer.
  The Department will still be permitted where justified to suspend, 
reject or revoke such exemption notices to assure that it performs its 
legal duties. It also requires the department to report back within 3 
years of enactment on the effects of the bill.
  This bill is an example of Congress taking appropriate action after 
reviewing a regulatory requirement that made sense when first enacted 
but which no longer is needed. Too often, these burdensome requirements 
continue on the books to the detriment of our business community. 
Congress should continue to work with our business community to

[[Page 1946]]

identify other instances of unnecessary regulations and requirements so 
that appropriate action can be taken.
  Mr. BACHUS. Madam Speaker, I yield back the balance of my time.
  Mr. FRANK of Massachusetts. Madam Speaker, I yield back the balance 
of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Massachusetts (Mr. Frank) that the House suspend the 
rules and pass the bill, H.R. 323.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill was passed.
  A motion to reconsider was laid on the table.

                          ____________________