IB 

Union Calendar No. 282 

109TH CONGRESS 

2D SESSION H. R. 5341 

[Report No. 109–506] 

To amend section 5313 of title 31, United States Code, to reform certain 

requirements for reporting cash transactions, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MAY 10, 2006 

Mr. BACHUS (for himself, Mr. FRANK of Massachusetts, Mr. HENSARLING, 

Mr. MOORE of Kansas, Mr. RENZI, Mrs. MALONEY, Mr. DAVIS of Kentucky, Mr. DAVIS of Alabama, Mr. SHAYS, Ms. HOOLEY, Mr. JONES of 

North Carolina, Mr. MATHESON, Mrs. BIGGERT, Mr. HINOJOSA, Mr. 

GARRETT of New Jersey, Ms. WASSERMAN SCHULTZ, Mr. NEUGEBAUER, 

Mr. CLAY, and Mrs. MCCARTHY) introduced the following bill; which was 

referred to the Committee on Financial Services 

JUNE 19, 2006 

Additional sponsors: Mr. FEENEY, Mr. PAUL, Mr. MCHENRY, and Mr. ISRAEL

JUNE 19, 2006 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on May 10, 2006] 

A BILL 

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

to reform certain requirements for reporting cash transactions, and for other purposes. 
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1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SEC. 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Seasoned Customer CTR 

5 Exemption Act of 2006’’. 

6 SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION RE7 PORTS FOR SEASONED CUSTOMERS. 

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

9 (1) The completion of and filing of currency 

10 transaction reports under section 5313 of title 31, 

11 United States Code, poses a compliance burden on the 

12 financial industry. 

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

14 persons and entities conducting such transactions, 

15 some reports as currently filed may not be relevant to 

16 the detection, deterrence, or investigation of financial 

17 crimes, including money laundering and the financ18 ing of terrorism. 

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

20 can provide valuable context for the analysis of other 

21 data derived pursuant to subchapter II of chapter 53 

22 of title 31, United States Code, as well as investiga23 tive data, which provide invaluable and indispensable 

24 information supporting efforts to combat money laun25 dering and other financial crimes. 
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1 (4) An appropriate exemption process from the 

2 reporting requirements for certain currency trans3 actions that are of little or no value to ongoing efforts 

4 of law enforcement agencies, financial regulatory 

5 agencies, and the financial services industry to inves6 tigate, detect, or deter financial crimes would con7 tinue to fulfill the compelling need to produce and 

8 provide meaningful information to policy-makers, fi9 nancial regulators, law enforcement, and intelligence 

10 agencies, while potentially lowering the compliance 

11 burden placed on financial institutions by the need to 

12 file such reports. 

13 (5) The Secretary of the Treasury has by regula14 tion, and in accordance with section 5313 of title 31, 

15 United States Code, implemented a process by which 

16 institutions may seek exemptions from filing certain 

17 currency transaction reports based on appropriate 

18 circumstances; however, the financial industry has 

19 not taken full advantage of these provisions and has 

20 contended that they are unduly burdensome. 

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

22 of the Treasury of designations of exemption— 

23 (A) provides meaningful information to law 

24 enforcement officials on exempt customers and 
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1 enables law enforcement to obtain account infor2 mation through appropriate legal process; and 

3 (B) complements other sections of title 31, 

4 United States Code, whereby law enforcement 

5 can locate financial institutions with relevant 

6 records relating to a person of investigative in7 terest, such as information requests made pursu8 ant to regulations implementing section 314(a) 

9 of the USA PATRIOT Act of 2001. 

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

11 requirements for depository institutions to apply the 

12 full range of anti-money laundering controls required 

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

14 States Code, and related provisions of law, including 

15 the requirement to apply the customer identification 

16 program pursuant to section 5326 of such title, and 

17 the requirement to identify, monitor, and, if appro18 priate, report suspicious activity in accordance with 

19 section 5318(g) of such title. 

20 (8) The Federal banking agencies and the Finan21 cial Crimes Enforcement Network have recently pro22 vided guidance through the Federal Financial Institu23 tions Examination Council Bank Secrecy Act/Anti24 Money Laundering Examination Manual on apply25 ing appropriate levels of due diligence and identi-
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1 fying suspicious activity by the types of cash-inten2 sive businesses that generally will be subject to exemp3 tion. 

4 (b) SEASONED CUSTOMER EXEMPTION.—Section 

5 5313(e) of title 31, United States Code, is amended to read 

6 as follows: 

7 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 

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

9 day period beginning on the date of the enactment of 

10 the Seasoned Customer CTR Exemption Act of 2006, 

11 the Secretary of the Treasury shall prescribe regula12 tions that exempt any depository institution from fil13 ing a report pursuant to this section in a transaction 

14 for the payment, receipt, or transfer of United States 

15 coins or currency (or other monetary instruments the 

16 Secretary of the Treasury prescribes) with a qualified 

17 customer of the depository institution. 

18 ‘‘(2) QUALIFIED CUSTOMER DEFINED.—For pur19 poses of this section, the term ‘qualified customer’, 

20 with respect to a depository institution, has such 

21 meaning as the Secretary of the Treasury shall pre22 scribe, which shall include any person that— 

23 ‘‘(A) is incorporated or organized under the 

24 laws of the United States or any State, includ25 ing 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 10, 

2 2006), or is registered as and eligible to do busi3 ness within the United States or a State; 

4 ‘‘(B) has maintained a deposit account with 

5 the depository institution for at least 12 months; 

6 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 pre18 scribe the form, manner, content, and timing of 

19 the qualified customer exemption notice and such 

20 notice shall include information sufficient to 

21 identify the qualified customer and the accounts 

22 of the customer. 

23 ‘‘(C) AUTHORITY OF SECRETARY.— 

24 ‘‘(i) IN GENERAL.—The Secretary may 

25 suspend, reject, or revoke any qualified cus-
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1 tomer exemption notice, in accordance with 

2 criteria prescribed by the Secretary by regu3 lation. 

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 insured 

10 depository institution will continue to be 

11 treated as designated exempt qualified cus12 tomers of the surviving or acquiring institu13 tion.’’. 

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

15 the 3-year period beginning on the date of the enactment 

16 of this Act, the Secretary of the Treasury, in consultation 

17 with the Attorney General, the Secretary of Homeland Se18 curity, the Federal banking agencies, the banking industry, 

19 and such other persons as the Secretary deems appropriate, 

20 shall evaluate the operations and effect of the provisions of 

21 the amendment made by subsection (a) and make rec22 ommendations to Congress as to any legislative action with 

23 respect to such provision as the Secretary may determine 

24 to be appropriate. 
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1 SEC. 3. PERIODIC REVIEW OF REPORTING THRESHOLD AND 

2 ADJUSTMENT FOR INFLATION. 

3 Section 5318 of title 31, United States Code, is amend4 ed by adding at the end the following new subsection: 

5 ‘‘(o) PERIODIC REVIEW OF REPORTING THRESHOLD

6 AND ADJUSTMENT FOR INFLATION.— 

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

8 period beginning on the date of the enactment of the 

9 Seasoned Customer CTR Exemption Act of 2006 and 

10 at least every 5 years after the end of such period, the 

11 Secretary of the Treasury shall— 

12 ‘‘(A) review the continuing appropriateness, 

13 relevance, and utility of each threshold amount 

14 or denomination established by the Secretary, in 

15 the Secretary’s discretion, for any report re16 quired by the Secretary under this subchapter; 

17 and 

18 ‘‘(B) adjust each such amount, at such time 

19 and in such manner as the Secretary considers 

20 appropriate, for any inflation that the Secretary 

21 determines has occurred since the date any such 

22 amount was established or last adjusted, as the 

23 case may be. 

24 ‘‘(2) REPORT.—Before the end of the 60-day pe25 riod beginning upon the completion of any review by 

26 the Secretary of the Treasury under paragraph (1), 
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1 the Secretary shall submit a report to the Congress 

2 containing the findings and conclusions of the Sec3 retary in connection with such review, together with 

4 an explanation for any adjustment, or lack of adjust5 ment, of any threshold amount or denomination by 

6 the Secretary as a result of such review, including the 

7 adjustment for inflation.’’. 
Union Calendar No. 282 

109TH CONGRESS 

2D SESSION H. R. 5341 

[Report No. 109–506] 

A BILL 

To amend section 5313 of title 31, United States 

ing cash transactions, and for other purposes. Code, to reform certain requirements for reportJUNE 19, 2006 

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,