[House Report 115-523]
[From the U.S. Government Publishing Office]
115th Congress } { Report
HOUSE OF REPRESENTATIVES
2d Session } { 115-523
======================================================================
TO ESTABLISH REQUIREMENTS FOR USE OF A DRIVER'S LICENSE OR PERSONAL
IDENTIFICATION CARD BY CERTAIN FINANCIAL INSTITUTIONS FOR OPENING AN
ACCOUNT OR OBTAINING A FINANCIAL PRODUCT OR SERVICE, AND FOR OTHER
PURPOSES
_______
January 22, 2018.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Hensarling, from the Committee on Financial Services, submitted the
following
R E P O R T
[To accompany H.R. 1457]
[Including cost estimate of the Congressional Budget Office]
The Committee Financial Services, to whom was referred the
bill (H.R. 1457) to establish requirements for use of a
driver's license or personal identification card by certain
financial institutions for opening an account or obtaining a
financial product or service, and for other purposes, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. MAKING ONLINE BANKING INITIATION LEGAL AND EASY.
(a) Definitions.--In this section:
(1) Affiliate.--The term ``affiliate'' has the meaning given
the term in section 2 of the Bank Holding Company Act of 1956
(12 U.S.C. 1841).
(2) Driver's license.--The term ``driver's license'' means a
license issued by a State to an individual that authorizes the
individual to operate a motor vehicle on public streets, roads,
or highways.
(3) Federal bank secrecy laws.--The term ``Federal bank
secrecy laws'' means--
(A) section 21 of the Federal Deposit Insurance Act
(12 U.S.C. 1829b);
(B) section 123 of Public Law 91-508 (84 Stat. 1116);
and
(C) subchapter II of chapter 53 of title 31, United
States Code.
(4) Federally recognized indian tribe.--The term ``federally
recognized Indian Tribe'' has the meaning given the term by the
Secretary of the Interior under section 104(a) of the Federally
Recognized Indian Tribe List Act of 1994 (25 U.S.C. 5131(a)).
(5) Financial institution.--The term ``financial
institution'' means--
(A) an insured depository institution;
(B) an insured credit union; or
(C) any affiliate of an insured depository
institution or insured credit union.
(6) Financial product or service.--The term ``financial
product or service'' has the meaning given the term in section
1002(15) of the Consumer Financial Protection Act of 2010 (12
U.S.C. 5481(15)).
(7) Insured credit union.--The term ``insured credit union''
has the meaning given the term in section 101 of the Federal
Credit Union Act (12 U.S.C. 1752).
(8) Insured depository institution.--The term ``insured
depository institution'' has the meaning given the term in
section 3 of the Federal Deposit Insurance Act (12 U.S.C.
1813).
(9) Online service.--The term ``online service'' means any
Internet-based service, such as a Web site or mobile
application.
(10) Personal identification card.--The term ``personal
identification card'' means an identification document issued
by a State, local government, or federally recognized Indian
Tribe to an individual solely for the purpose of identification
of that individual.
(11) Personal information.--The term ``personal information''
means the information displayed on or electronically encoded on
a driver's license or personal identification card that is
reasonably necessary to fulfill the purpose and uses permitted
by subsection (b).
(12) State.--The term ``State'' means any State,
commonwealth, territory, or possession of the United States,
the District of Columbia, the Commonwealth of Puerto Rico, the
Commonwealth of the Northern Mariana Islands, American Samoa,
Guam, or the United States Virgin Islands.
(13) Scan.--The term ``scan'' means the act of using a device
or software to decipher, in an electronically readable format,
personal information displayed on or electronically encoded on
a driver's license or personal identification card.
(b) Use of a Driver's License or Personal Identification Card.--
(1) In general.--When an individual initiates a request
through an online service to open an account with a financial
institution or obtain a financial product or service from a
financial institution, the financial institution may record
personal information from a scan of the driver's license or
personal identification card of the individual, or make a copy
or receive an image of the driver's license or personal
identification card of the individual, and store or retain such
information in any electronic format for the purposes described
in paragraph (2).
(2) Uses of information.--Except as required to comply with
Federal bank secrecy laws, a financial institution may only use
the information obtained under paragraph (1)--
(A) to verify the authenticity of the driver's
license or personal identification card;
(B) to verify the identity of the individual; and
(C) to comply with a legal requirement to record,
retain, or transmit the personal information in
connection with opening an account or obtaining a
financial product or service.
(3) Deletion of image.--A financial institution that makes a
copy or receives an image of a driver's license or personal
identification card of an individual in accordance with
paragraph (1) shall, after using the image for the purposes
described in paragraph (2), permanently delete, within a
reasonable amount of time--
(A) any image of the driver's license or personal
identification card, as applicable; and
(B) any copy of any such image.
(c) Disclosure of Personal Information.--Nothing in this section
shall be construed to amend, modify, or otherwise affect any State or
Federal laws that govern a financial institution's disclosure and
security of personal information that is not publicly available.
(d) Relation to State Law.--The provisions of this section shall
preempt and supersede any State law that conflicts with a provision of
this section, but only to the extent of such conflict.
PURPOSE AND SUMMARY
Introduced on March 9, 2017 by Representative Tipton, H.R.
1457 the ``Making Online Banking Initiation Legal and Easy Act
of 2017'' or ``MOBILE'' Act authorizes a financial institution,
upon an individual's request, to record personal information
from a scan, copy, or image of such individual's driver's
license or personal identification card and store the
information electronically to verify the customer's identity
and prevent fraud or criminal activity. H.R. 1457 requires the
financial institution to delete the image after using it for
the permitted purpose.
BACKGROUND AND NEED FOR LEGISLATION
Currently, the majority of states' laws permit mobile
banking applications or apps to copy (aka ``scan'' or
``swipe'') state-issued driver's licenses or personal
identification cards to verify the identity of their customers.
In these states, there is no legal barrier to consumers that
wish to open a bank account or seek certain other banking
services on a mobile device.
However a minority of states do not permit the use of
state-issued driver's licenses or personal identification
cards. Five states prohibit making and retaining copies of
driver's licenses (Colorado, Kansas, Mississippi, North Dakota,
and Tennessee) and two states prohibit swiping driver's
licenses (Illinois and Oregon). Twelve additional states and
the District of Columbia have potentially ambiguous laws
(Arizona, California, Florida, Hawaii, Maine, Nebraska, New
Hampshire, North Carolina, Oklahoma, Oregon, Rhode Island, and
Vermont).
The MOBILE Act creates uniformity and certainty that will
allow financial institutions to offer the full range of mobile
banking to all consumers. It creates a new national standard
that would permit financial institutions to scan and retain
information from driver's licenses and personal identification
cards in every state. This legislation also permits mobile
banking apps to use state-issued driver's licenses or personal
identification cards for the limited purposes of verifying an
individual's identity and complying with financial
institutions' legal obligations to obtain, retain, and transmit
this information when a customer opens an account or obtains a
financial product or service. Current anti-money laundering and
terrorism financing regulations already require financial
institutions to verify customers' identities, and obtain,
record, and transmit information pertaining to that
information.
This legislation also includes provisions to promote the
security of consumers' information. The bill requires financial
institutions to delete all copies of driver's licenses and
personal identification after having used them for the
permitted purpose. The legislation does not affect state and
federal laws governing financial institution's disclosure and
security of non-public personal information, and limits its
preemption of state law to only those provisions that directly
conflict with the MOBILE Act.
HEARINGS
The Committee on Financial Services held a hearing
examining matters relating to H.R. 1457 on July 12, 2017.
COMMITTEE CONSIDERATION
The Committee on Financial Services met in open session on
December 12, 2017 and December 13, 2017 and ordered H.R. 1457
to be reported favorably by a recorded vote of 60 yeas to 0
nays (Record vote no. FC-125), a quorum being present. Before
the motion to report was adopted, the Committee adopted an
amendment offered by Mr. Tipton.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee to list the record votes
on the motion to report legislation and amendments thereto. The
sole recorded vote was on a motion by Chairman Hensarling to
report the bill favorably to the House without amendment. The
motion was agreed to by a recorded vote of 60 yeas to 0 nays
(Record vote no. FC-125), a quorum being present.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c)(1) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the Committee states that H.R. 1457
will authorize a financial institution, with an individual's
consent, to record personal information from a swipe or copy of
an individual's driver's license or personal identification
card and store the information electronically for the purpose
of verifying the authenticity of the driver's license or
identification card, or complying with legal requirements.
Under current law, financial institutions are prohibited from
selling, renting, transferring, or making such information
available to another person, other than an affiliate.
NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee adopts as its
own the estimate of new budget authority, entitlement
authority, or tax expenditures or revenues contained in the
cost estimate prepared by the Director of the Congressional
Budget Office pursuant to section 402 of the Congressional
Budget Act of 1974.
CONGRESSIONAL BUDGET OFFICE ESTIMATES
Pursuant to clause 3(c)(3) of rule XIII of the Rules of the
House of Representatives, the following is the cost estimate
provided by the Congressional Budget Office pursuant to section
402 of the Congressional Budget Act of 1974:
U.S. Congress,
Congressional Budget Office,
Washington, DC, January 19, 2018.
Hon. Jeb Hensarling,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 1457, the MOBILE
Act of 2017.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contacts are Sarah Puro
(for federal costs) and Rachel Austin (for mandates).
Sincerely,
Keith Hall,
Director.
Enclosure.
H.R. 1457--MOBILE Act of 2017
H.R. 1457 would require states to permit consumers to open
Internet-based bank accounts with a scanned photograph of their
driver's license or other personal identification. Under
current law, fewer than 10 states prohibit such actions.
Because the bill would exclusively affect state laws, CBO
estimates that it would have no effect on the federal budget.
Enacting H.R. 1457 would not affect direct spending or
revenues; therefore, pay-as-you-go procedures do not apply.
CBO estimates that enacting H.R. 1457 would not increase
net direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2028.
H.R. 1457 would preempt state laws that conflict with the
bill's provisions; those provisions would allow financial
institutions to record information from a driver's license or
personal identification card and store the information when
verifying the authenticity of the documents, verifying a
person's identity, or complying with legal requirements.
Although that preemption would limit the application of
state laws and regulations, CBO estimates that H.R. 1457 would
impose no duty on state, local, or tribal governments that
would result in additional spending or a loss of revenues.
Consequently, the cost of the mandate would not exceed the
threshold established in the Unfunded Mandates Reform Act
(UMRA) for intergovernmental mandates ($78 million in 2017,
adjusted annually for inflation).
The bill contains no private-sector mandates as defined in
UMRA.
The CBO staff contacts for this estimate are Sarah Puro
(for federal costs) and Rachel Austin (for mandates). The
estimate was approved by H. Samuel Papenfuss, Deputy Assistant
Director for Budget Analysis.
FEDERAL MANDATES STATEMENT
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995.
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
ADVISORY COMMITTEE STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
EARMARK IDENTIFICATION
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
DUPLICATION OF FEDERAL PROGRAMS
In compliance with clause 3(c)(5) of rule XIII of the Rules
of the House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes: (1) a
program of the Federal Government known to be duplicative of
another Federal program; (2) a program included in any report
from the Government Accountability Office to Congress pursuant
to section 21 of Public Law 111-139; or (3) a program related
to a program identified in the most recent Catalog of Federal
Domestic Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
DISCLOSURE OF DIRECTED RULEMAKING
Pursuant to section 3(i) of H. Res. 5, (115th Congress),
the following statement is made concerning directed
rulemakings: The Committee estimates that the bill requires one
directed rulemaking within the meaning of such section.
The rulemaking requires the CFPB to issue final regulations
to carry out the amendments made by the Act within 90 days of
the enactment of the Act, and those regulations shall be
effective upon issuance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Making Online Banking Initiation Legal and Easy Act of 2017
This section defines the various terms utilized within the
Act.
This section also authorizes a financial institution, upon
an individual's request, to record personal information from a
scan, copy, or image of such individual's driver's license or
personal identification card and store the information
electronically for the purpose of verifying the identity of a
customer and preventing fraud or criminal activity. A financial
institution must delete the image after using it for the
permitted purpose.
The bill specifies that it does not affect applicable state
and federal laws that govern a financial institution's
disclosure and security of personal information that is not
publicly available.
This section clarifies that the Act preempts and supersedes
any conflicting State law to the extent of such conflict.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 1457 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report contemplated by clause 3(e)(1)(B) of rule
XIII of the Rules of the House of Representatives.
[all]