IIB 

109TH CONGRESS 

2D SESSION H. R. 5341 

IN THE SENATE OF THE UNITED STATES 

JUNE 28, 2006 

Received; read twice and referred to the Committee on Banking, Housing, and 

Urban Affairs 

AN ACT 

To amend section 5313 of title 31, United States Code, 

to reform certain requirements for reporting cash transactions, 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, 


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1 SECTION 1. SHORT TITLE. 

2 This Act may be cited as the ‘‘Seasoned Customer 

3 CTR Exemption Act of 2006’’. 

4 SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION RE5 PORTS FOR SEASONED CUSTOMERS. 

6 (a) FINDINGS.—The Congress finds as follows: 

7 (1) The completion of and filing of currency 

8 transaction reports under section 5313 of title 31, 

9 United States Code, poses a compliance burden on 

10 the financial industry. 

11 (2) Due to the nature of the transactions or the 

12 persons and entities conducting such transactions, 

13 some reports as currently filed may not be relevant 

14 to the detection, deterrence, or investigation of fi15 nancial crimes, including money laundering and the 

16 financing of terrorism. 

17 (3) However, the data contained in such reports 

18 can provide valuable context for the analysis of other 

19 data derived pursuant to subchapter II of chapter 

20 53 of title 31, United States Code, as well as inves21 tigative data, which provide invaluable and indispen22 sable information supporting efforts to combat 

23 money laundering and other financial crimes. 

24 (4) An appropriate exemption process from the 

25 reporting requirements for certain currency trans26 actions that are of little or no value to ongoing efVerDate Aug 31 2005 22:50 Jun 28, 2006 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5341.RFS H5341

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1 forts of law enforcement agencies, financial regu2 latory agencies, and the financial services industry 

3 to investigate, detect, or deter financial crimes would 

4 continue to fulfill the compelling need to produce 

5 and provide meaningful information to policy-mak6 ers, financial regulators, law enforcement, and intel7 ligence agencies, while potentially lowering the com8 pliance burden placed on financial institutions by the 

9 need to file such reports. 

10 (5) The Secretary of the Treasury has by regu11 lation, and in accordance with section 5313 of title 

12 31, United States Code, implemented a process by 

13 which institutions may seek exemptions from filing 

14 certain currency transaction reports based on appro15 priate circumstances; however, the financial industry 

16 has not taken full advantage of these provisions and 

17 has contended that they are unduly burdensome. 

18 (6) The act of providing notice to the Secretary 

19 of the Treasury of designations of exemption— 

20 (A) provides meaningful information to law 

21 enforcement officials on exempt customers and 

22 enables law enforcement to obtain account in23 formation through appropriate legal process; 

24 and 


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1 (B) complements other sections of title 31, 

2 United States Code, whereby law enforcement 

3 can locate financial institutions with relevant 

4 records relating to a person of investigative in5 terest, such as information requests made pur6 suant to regulations implementing section 

7 314(a) of the USA PATRIOT Act of 2001. 

8 (7) A designation of exemption has no effect on 

9 requirements for depository institutions to apply the 

10 full range of anti-money laundering controls required 

11 under subchapter II of chapter 53 of title 31, United 

12 States Code, and related provisions of law, including 

13 the requirement to apply the customer identification 

14 program pursuant to section 5326 of such title, and 

15 the requirement to identify, monitor, and, if appro16 priate, report suspicious activity in accordance with 

17 section 5318(g) of such title. 

18 (8) The Federal banking agencies and the Fi19 nancial Crimes Enforcement Network have recently 

20 provided guidance through the Federal Financial In21 stitutions Examination Council Bank Secrecy Act/ 

22 Anti-Money Laundering Examination Manual on ap23 plying appropriate levels of due diligence and identi24 fying suspicious activity by the types of cash-intenVerDate Aug 31 2005 22:50 Jun 28, 2006 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5341.RFS H5341

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1 sive businesses that generally will be subject to ex2 emption. 

3 (b) SEASONED CUSTOMER EXEMPTION.—Section 

4 5313(e) of title 31, United States Code, is amended to 

5 read as follows: 

6 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 

7 ‘‘(1) IN GENERAL.—Before the end of the 270- 

8 day period beginning on the date of the enactment 

9 of the Seasoned Customer CTR Exemption Act of 

10 2006, the Secretary of the Treasury shall prescribe 

11 regulations that exempt any depository institution 

12 from filing a report pursuant to this section in a 

13 transaction for the payment, receipt, or transfer of 

14 United States coins or currency (or other monetary 

15 instruments the Secretary of the Treasury pre16 scribes) with a qualified customer of the depository 

17 institution. 

18 ‘‘(2) QUALIFIED CUSTOMER DEFINED.—For 

19 purposes of this section, the term ‘qualified cus20 tomer’, with respect to a depository institution, has 

21 such meaning as the Secretary of the Treasury shall 

22 prescribe, which shall include any person that— 

23 ‘‘(A) is incorporated or organized under 

24 the laws of the United States or any State, in25 cluding a sole proprietorship (as defined in 31 


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1 C.F.R. 103.22(d)(6)(vii), as in effect on May 

2 10, 2006), or is registered as and eligible to do 

3 business within the United States or a State; 

4 ‘‘(B) has maintained a deposit account 

5 with the depository institution for at least 12 

6 months; and 

7 ‘‘(C) has engaged, using such account, in 

8 multiple currency transactions that are subject 

9 to the reporting requirements of subsection (a). 

10 ‘‘(3) REGULATIONS.— 

11 ‘‘(A) IN GENERAL.—The Secretary of the 

12 Treasury shall prescribe regulations requiring a 

13 depository institution to file a 1-time notice of 

14 designation of exemption for each qualified cus15 tomer of the depository institution. 

16 ‘‘(B) FORM AND CONTENT OF EXEMPTION

17 NOTICE.—The Secretary shall by regulation 

18 prescribe the form, manner, content, and timing 

19 of the qualified customer exemption notice and 

20 such notice shall include information sufficient 

21 to identify the qualified customer and the ac22 counts of the customer. 

23 ‘‘(C) AUTHORITY OF SECRETARY.— 

24 ‘‘(i) IN GENERAL.—The Secretary 

25 may suspend, reject, or revoke any qualiVerDate Aug 31 2005 22:50 Jun 28, 2006 Jkt 049200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5341.RFS H5341

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1 fied customer exemption notice, in accord2 ance with criteria prescribed by the Sec3 retary by regulation. 

4 ‘‘(ii) CONDITIONS.—The Secretary 

5 may establish conditions, in accordance 

6 with criteria prescribed by regulation, 

7 under which exempt qualified customers of 

8 an insured depository institution that is 

9 merged with or acquired by another in10 sured depository institution will continue 

11 to be treated as designated exempt quali12 fied customers of the surviving or acquir13 ing institution.’’. 

14 (c) 3-YEAR REVIEW AND REPORT.—Before the end 

15 of the 3-year period beginning on the date of the enact16 ment of this Act, the Secretary of the Treasury, in con17 sultation with the Attorney General, the Secretary of 

18 Homeland Security, the Federal banking agencies, the 

19 banking industry, and such other persons as the Secretary 

20 deems appropriate, shall evaluate the operations and effect 

21 of the provisions of the amendment made by subsection 

22 (a) and make recommendations to Congress as to any leg23 islative action with respect to such provision as the Sec24 retary may determine to be appropriate. 


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1 SEC. 3. PERIODIC REVIEW OF REPORTING THRESHOLD 

2 AND ADJUSTMENT FOR INFLATION. 

3 Section 5318 of title 31, United States Code, is 

4 amended by adding at the end the following new sub5 section: 

6 ‘‘(o) PERIODIC REVIEW OF REPORTING THRESHOLD

7 AND ADJUSTMENT FOR INFLATION.— 

8 ‘‘(1) IN GENERAL.—Before the end of the 90- 

9 day period beginning on the date of the enactment 

10 of the Seasoned Customer CTR Exemption Act of 

11 2006 and at least every 5 years after the end of 

12 such period, the Secretary of the Treasury shall— 

13 ‘‘(A) review the continuing appropriate14 ness, relevance, and utility of each threshold 

15 amount or denomination established by the Sec16 retary, in the Secretary’s discretion, for any re17 port required by the Secretary under this sub18 chapter; and 

19 ‘‘(B) adjust each such amount, at such 

20 time and in such manner as the Secretary con21 siders appropriate, for any inflation that the 

22 Secretary determines has occurred since the 

23 date any such amount was established or last 

24 adjusted, as the case may be. 

25 ‘‘(2) REPORT.—Before the end of the 60-day 

26 period beginning upon the completion of any review 


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1 by the Secretary of the Treasury under paragraph 

2 (1), the Secretary shall submit a report to the Con3 gress containing the findings and conclusions of the 

4 Secretary in connection with such review, together 

5 with an explanation for any adjustment, or lack of 

6 adjustment, of any threshold amount or denomina7 tion by the Secretary as a result of such review, in8 cluding the adjustment for inflation.’’. 

Passed the House of Representatives June 27, 2006. 

Attest: KAREN L. HAAS, 

Clerk. 


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