II 

113TH CONGRESS 

1ST SESSION S. 1534 

To provide a framework establishing the rights, liabilities, and responsibilities 

of participants in closing procedures for certain types of consumer deposit 

accounts, to protect individual consumer rights, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 19, 2013 

Mr. HARKIN introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To provide a framework establishing the rights, liabilities, 

and responsibilities of participants in closing procedures 

for certain types of consumer deposit accounts, to protect 

individual consumer rights, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Freedom and Mobility 

5 in Consumer Banking Act’’. 


jbell on DSK7SPTVN1PROD with BILLS
2 

•S 1534 IS

1 SEC. 2. CONSUMER RIGHTS WITH RESPECT TO CLOSED AC2 COUNTS. 

3 The Truth in Savings Act (12 U.S.C. 4301 et seq.) 

4 is amended— 

5 (1) by striking section 262 and inserting the 

6 following: 

7 ‘‘SEC. 262. FINDINGS AND PURPOSES. 

8 ‘‘(a) FINDINGS.—Congress finds that— 

9 ‘‘(1) economic stability would be enhanced, 

10 competition between depository institutions would be 

11 improved, and the ability of the consumer to make 

12 informed decisions regarding deposit accounts, and 

13 to verify accounts, would be strengthened if there 

14 were uniformity in the disclosure of terms and con15 ditions on which interest is paid and fees are as16 sessed in connection with such accounts; and 

17 ‘‘(2) consumers lack meaningful choices for 

18 managing household funds because— 

19 ‘‘(A) despite dissatisfaction with rising ac20 count fees at some depository institutions, con21 sumers often find it too difficult to move their 

22 funds to new deposit accounts; 

23 ‘‘(B) the process of moving funds to new 

24 deposit accounts often involves several steps 

25 and substantial time to complete, and it is not 

26 always clear what the proper procedures are for 


jbell on DSK7SPTVN1PROD with BILLS
3 

•S 1534 IS

1 closing an account at a given depository institu2 tion; 

3 ‘‘(C) depository institutions have no obliga4 tion and may lack the technical capabilities to 

5 help consumers transfer automated deposits or 

6 debits from old accounts to new accounts, caus7 ing delays and confusion; 

8 ‘‘(D) depository institutions may charge 

9 fees to close an account and withdraw available 

10 funds, which can impede banking mobility for 

11 low-income consumers; and 

12 ‘‘(E) some depository institutions have en13 gaged in the practice of reopening closed ac14 counts without the consent of the consumer. 

15 ‘‘(b) PURPOSES.—The purposes of this Act are— 

16 ‘‘(1) to allow consumers to make a meaningful 

17 comparison between competing claims of depository 

18 institutions with regard to deposit accounts by re19 quiring the clear and uniform disclosure of— 

20 ‘‘(A) the rates of interest that are payable 

21 on deposit accounts by depository institutions; 

22 and 

23 ‘‘(B) the fees that are assessable against 

24 deposit accounts; and 


jbell on DSK7SPTVN1PROD with BILLS
4 

•S 1534 IS

1 ‘‘(2) to protect rights of consumers by providing 

2 a framework establishing the rights, liabilities, and 

3 responsibilities of depository institutions and con4 sumers in closing procedures for certain types of 

5 consumer deposit accounts.’’; 

6 (2) by inserting after section 268 the following: 

7 ‘‘SEC. 268A. CLOSURE OF COVERED ACCOUNTS. 

8 ‘‘(a) IN GENERAL.—A depository institution may 

9 not— 

10 ‘‘(1) prohibit a consumer from closing a covered 

11 account at the depository institution, regardless of 

12 whether the balance in the covered account is posi13 tive, zero, or negative; 

14 ‘‘(2) charge any fee to close a covered account; 

15 or 

16 ‘‘(3) reopen a covered account that a consumer 

17 has requested to be closed in accordance with this 

18 section to apply subsequent debits, whether 

19 preauthorized or otherwise, or for any other reason, 

20 unless the consumer expressly requests that the cov21 ered account be reopened. 

22 ‘‘(b) DISCLOSURES REQUIRED.—A depository insti23 tution shall provide to any consumer that opens a covered 

24 account at the depository institution a description of the 


jbell on DSK7SPTVN1PROD with BILLS
5 

•S 1534 IS

1 policies and procedures that the depository institution has 

2 in place to close a covered account— 

3 ‘‘(1) at the time the consumer opens the cov4 ered account; 

5 ‘‘(2) at any time, upon request of a consumer; 

6 and 

7 ‘‘(3) on the website of the depository institu8 tion. 

9 ‘‘(c) REGULATIONS RELATING TO CLOSURE OF COV10 ERED ACCOUNTS.— 

11 ‘‘(1) IN GENERAL.—Not later than 1 year after 

12 the date of enactment of this section, the Bureau, 

13 after consultation with each agency referred to in 

14 section 270(a), and public notice and opportunity for 

15 comment, shall prescribe final regulations to carry 

16 out this section. 

17 ‘‘(2) CONTENT.—The regulations required by 

18 this subsection shall— 

19 ‘‘(A) require that a depository institution 

20 close a covered account not later than 5 busi21 ness days after the date on which a consumer 

22 makes a request to close the covered account, 

23 except that the closure of the covered account 

24 may be delayed— 


jbell on DSK7SPTVN1PROD with BILLS
6 

•S 1534 IS

1 ‘‘(i) if a Federal or State law enforce2 ment agency notifies the depository institu3 tion that the closure will interfere with a 

4 criminal investigation; or 

5 ‘‘(ii) pursuant to any other exception 

6 that the Bureau determines is appropriate; 

7 ‘‘(B) prescribe the methods by which a 

8 consumer may make a request to a depository 

9 institution to close a covered account, which, 

10 except as provided in subparagraph (C), shall 

11 include requests made in person, over the 

12 phone, or by other electronic or remote means; 

13 ‘‘(C) allow a depository institution to re14 quire that a request by a consumer to close a 

15 covered account shall be made in person if the 

16 covered account contains an amount on deposit 

17 exceeding a certain monetary threshold, as de18 termined and established by the Bureau; 

19 ‘‘(D) establish procedures that require a 

20 depository institution to positively verify the 

21 identity of a consumer requesting to close a 

22 covered account before the depository institu23 tion closes the covered account, including proce24 dures for a depository institution to follow if 


jbell on DSK7SPTVN1PROD with BILLS
7 

•S 1534 IS

1 the depository institution is unable to verify the 

2 identity of the consumer; 

3 ‘‘(E) establish procedures for a depository 

4 institution to provide a consumer with the 

5 funds contained in a covered account that the 

6 consumer has requested to close, which shall in7 clude procedures— 

8 ‘‘(i) that ensure that the consumer 

9 whose identity has been positively verified 

10 by the depository institution has access to 

11 any funds available for withdrawal at the 

12 time the consumer makes a request to the 

13 depository institution to close the covered 

14 account; 

15 ‘‘(ii) that establish a reasonable 

16 amount of time for the depository institu17 tion to remit to the consumer the remain18 der of any funds in the closed covered ac19 count, including funds that are subject to 

20 a dispute between the depository institu21 tion and the consumer; and 

22 ‘‘(iii) that allow a consumer whose 

23 identity has been positively verified by the 

24 depository institution to receive available 

25 funds from a covered account that the conVerDate Mar 15 2010 02:57 Sep 24, 2013 Jkt 029200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1534.IS S1534

jbell on DSK7SPTVN1PROD with BILLS
8 

•S 1534 IS

1 sumer has requested to close in the form 

2 of— 

3 ‘‘(I) a cashier’s check provided to 

4 the consumer; 

5 ‘‘(II) an electronic funds transfer 

6 to an account designated by the con7 sumer; 

8 ‘‘(III) any means offered by the 

9 depository institution that the con10 sumer has requested; or 

11 ‘‘(IV) any means that the Bureau 

12 determines appropriate; 

13 ‘‘(F) except as provided under subpara14 graph (G), prohibit a depository institution 

15 from imposing any fee or charge on a covered 

16 account at the depository institution after the 

17 consumer has requested to close the covered ac18 count; 

19 ‘‘(G) allow a depository institution to as20 sess an overdraft fee after a consumer has re21 quested to close a covered account, if such over22 draft fee is associated with a transaction that 

23 was initiated by the consumer before the date 

24 on which the consumer made a request to the 


jbell on DSK7SPTVN1PROD with BILLS
9 

•S 1534 IS

1 depository institution to close the covered ac2 count; 

3 ‘‘(H) not limit the ability of a consumer to 

4 earn interest that a covered account had ac5 crued before the date on which the consumer 

6 made a request to the depository institution to 

7 close the covered account; 

8 ‘‘(I) establish procedures for a depository 

9 institution and a consumer to follow if a per10 sonal check written by the consumer is depos11 ited by a person other than the consumer after 

12 the date on which the consumer has closed a 

13 covered account; 

14 ‘‘(J) require the depository institution to 

15 provide the consumer with certain information 

16 before the depository institution closes a cov17 ered account of the consumer, including— 

18 ‘‘(i) a list of any preauthorized trans19 actions relating to the covered account that 

20 occurred within the 60 days preceding the 

21 date on which the consumer made a re22 quest to the depository institution to close 

23 the covered account; 

24 ‘‘(ii) a list of any preauthorized trans25 actions scheduled to occur in the 60 days 


jbell on DSK7SPTVN1PROD with BILLS
10 

•S 1534 IS

1 after the date on which the consumer made 

2 a request to the depository institution to 

3 close the covered account; 

4 ‘‘(iii) a list of any direct deposits into 

5 the covered account in the 60 days pre6 ceding the date on which the consumer 

7 made a request to the depository institu8 tion to close the covered account; and 

9 ‘‘(iv) any other information that the 

10 Bureau determines is necessary to provide 

11 consumers with adequate information 

12 about potential preauthorized activity re13 lating to the covered account; 

14 ‘‘(K) prohibit a depository institution from 

15 reporting an outstanding balance or any other 

16 adverse information with respect to a covered 

17 account at the depository institution to any con18 sumer reporting agency, as defined in section 

19 603(f) of the Fair Credit Reporting Act (15 

20 U.S.C. 1681a), if— 

21 ‘‘(i) at the time the covered account is 

22 closed, the covered account has a negative 

23 balance resulting solely from any fee as24 sessed by the depository institution; and 


jbell on DSK7SPTVN1PROD with BILLS
11 

•S 1534 IS

1 ‘‘(ii) that information could be used to 

2 adversely affect the ability of the consumer 

3 to open an account at another depository 

4 institution; 

5 ‘‘(L) establish the terms under which a de6 pository institution may report that a covered 

7 account had a negative balance at the time of 

8 the closure of the covered account to a con9 sumer reporting agency, as defined in section 

10 603(f) of the Fair Credit Reporting Act (15 

11 U.S.C. 1681a), if the depository institution— 

12 ‘‘(i) notifies the consumer of the nega13 tive balance; and 

14 ‘‘(ii) provides the consumer with a 

15 reasonable period of time, as determined 

16 and established by the Bureau, to repay 

17 the negative balance; and 

18 ‘‘(M) include any other provisions, guid19 ance, or exceptions that the Bureau determines 

20 are appropriate in order to facilitate the pur21 poses of this section. 

22 ‘‘(d) STUDY REQUIRED.— 

23 ‘‘(1) STUDY.— 

24 ‘‘(A) IN GENERAL.—The Comptroller Gen25 eral of the United States shall conduct a study 


jbell on DSK7SPTVN1PROD with BILLS
12 

•S 1534 IS

1 to determine additional barriers that could limit 

2 the ability of a consumer to close a covered ac3 count. 

4 ‘‘(B) CONTENTS OF STUDY.—The study 

5 required under subparagraph (A) shall include, 

6 at a minimum, analysis of— 

7 ‘‘(i) potential reforms to payment 

8 clearing and settlement systems that would 

9 enable depository institutions to notify con10 sumers if a preauthorized recurring debit 

11 is directed to a covered account after the 

12 covered account has been closed; 

13 ‘‘(ii) potential reforms to payment 

14 clearing and settlement systems that would 

15 automatically transfer any direct deposit, 

16 preauthorized transaction, or other similar 

17 scheduled activity relating to a closed cov18 ered account to another account designated 

19 by the consumer; 

20 ‘‘(iii) other factors, including techno21 logical barriers, in payment clearing and 

22 scheduling systems that limit the ability of 

23 consumers to efficiently close a covered ac24 count and transfer funds to another ac25 count; and 


jbell on DSK7SPTVN1PROD with BILLS
13 

•S 1534 IS

1 ‘‘(iv) recommendations to Congress 

2 and the appropriate Federal banking agen3 cies, including steps that the appropriate 

4 Federal banking agencies could take 

5 through rulemaking to facilitate the auto6 matic transfer of funds from a closed cov7 ered account to another account designated 

8 by the consumer. 

9 ‘‘(C) REPORT.—Not later than 1 year 

10 after the date of enactment of this subsection, 

11 the Comptroller General shall issue a report to 

12 Congress and the Bureau on the study required 

13 under subparagraph (A), including any findings 

14 and determinations made by the Comptroller 

15 General in carrying out the study. 

16 ‘‘(2) RULEMAKING.—Not later than 1 year 

17 after the Bureau receives the report issued under 

18 paragraph (1)(C), the Bureau shall— 

19 ‘‘(A) determine whether regulations should 

20 be issued to remove barriers that limit the abil21 ity of a consumer to close a covered account; 

22 and 

23 ‘‘(B) if the Bureau determines that such 

24 regulations should be issued, the Bureau shall, 

25 in consultation with each agency referred to in 


jbell on DSK7SPTVN1PROD with BILLS
14 

•S 1534 IS

1 section 270(a), and after public notice and op2 portunity for comment, issue such regula3 tions.’’; and 

4 (3) in section 274, by adding at the end the fol5 lowing: 

6 ‘‘(9) AVAILABLE FOR WITHDRAWAL.—The term 

7 ‘available for withdrawal’, with respect to funds de8 posited, means available for all uses generally per9 mitted to the customer for actually and finally col10 lected funds under the account agreement with the 

11 depository institution or policies of the depository in12 stitution, such as for payment of checks drawn on 

13 the account, certification of checks drawn on the ac14 count, electronic payments, withdrawals by cash, and 

15 transfers between accounts. 

16 ‘‘(10) COVERED ACCOUNT.—The term ‘covered 

17 account’ means any checking, savings, or any other 

18 account that the Bureau may include, by regula19 tion.’’. 

Æ 


jbell on DSK7SPTVN1PROD with BILLS