I 

109TH CONGRESS 

2D SESSION H. R. 5341 

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 

A BILL 

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, 

3 SECTION 1. SHORT TITLE. 

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

5 CTR Exemption Act of 2006’’. 


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1 SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION RE2 PORTS FOR SEASONED CUSTOMERS. 

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

4 (1) The completion of and filing of currency 

5 transaction reports under section 5313 of title 31, 

6 United States Code, poses a compliance burden on 

7 the financial industry. 

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

9 persons and entities conducting such transactions, 

10 some reports as currently filed may not be relevant 

11 to the detection, deterrence, or investigation of fi12 nancial crimes, including money laundering and the 

13 financing of terrorism. 

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

15 can provide valuable context for the analysis of other 

16 data derived pursuant to subchapter II of chapter 

17 53 of title 31, United States Code, as well as inves18 tigative data, which provide invaluable and indispen19 sable information supporting efforts to combat 

20 money laundering and other financial crimes. 

21 (4) An appropriate exemption process from the 

22 reporting requirements for certain currency trans23 actions that are of little or no value to ongoing ef24 forts of law enforcement agencies, financial regu25 latory agencies, and the financial services industry 

26 to investigate, detect, or deter financial crimes would 


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1 continue to fulfill the compelling need to produce 

2 and provide meaningful information to policy-mak3 ers, financial regulators, law enforcement, and intel4 ligence agencies, while potentially lowering the com5 pliance burden placed on financial institutions by the 

6 need to file such reports. 

7 (5) The Secretary of the Treasury has by regu8 lation, and in accordance with section 5313 of title 

9 31, United States Code, implemented a process by 

10 which institutions may seek exemptions from filing 

11 certain currency transaction reports based on appro12 priate circumstances; however, the financial industry 

13 has not taken full advantage of these provisions and 

14 has contended that they are unduly burdensome. 

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

16 of the Treasury of designations of exemption— 

17 (A) provides meaningful information to law 

18 enforcement officials on exempt customers and 

19 enables law enforcement to obtain account in20 formation through appropriate legal process; 

21 and 

22 (B) complements other sections of title 31, 

23 United States Code, whereby law enforcement 

24 can locate financial institutions with relevant 

25 records relating to a person of investigative inVerDate Aug 31 2005 04:21 May 13, 2006 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5341.IH H5341

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1 terest, such as information requests made pur2 suant to regulations implementing section 

3 314(a) of the USA PATRIOT Act of 2001. 

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

5 requirements for depository institutions to apply the 

6 full range of anti-money laundering controls required 

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

8 States Code, and related provisions of law, including 

9 the requirement to apply the customer identification 

10 program pursuant to section 5326 of such title, and 

11 the requirement to identify, monitor, and, if appro12 priate, report suspicious activity in accordance with 

13 section 5318(g) of such title. 

14 (8) The Federal banking agencies and the Fi15 nancial Crimes Enforcement Network have recently 

16 provided guidance through the Federal Financial In17 stitutions Examination Council Bank Secrecy Act/ 

18 Anti-Money Laundering Examination Manual on ap19 plying appropriate levels of due diligence and identi20 fying suspicious activity by the types of cash-inten21 sive businesses that generally will be subject to ex22 emption. 

23 (b) SEASONED CUSTOMER EXEMPTION.—Section 

24 5313(e) of title 31, United States Code, is amended to 

25 read as follows: 


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1 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 

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

3 day period beginning on the date of the enactment 

4 of the Seasoned Customer CTR Exemption Act of 

5 2006, the Secretary of the Treasury shall prescribe 

6 regulations that exempt any depository institution 

7 from filing a report pursuant to this section in a 

8 transaction for the payment, receipt, or transfer of 

9 United States coins or currency (or other monetary 

10 instruments the Secretary of the Treasury pre11 scribes) with a qualified customer of the depository 

12 institution. 

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

14 purposes of this section, the term ‘qualified cus15 tomer’, with respect to a depository institution, has 

16 such meaning as the Secretary of the Treasury shall 

17 prescribe, which shall include any person that— 

18 ‘‘(A) is incorporated or organized under 

19 the laws of the United States or any State, in20 cluding a sole proprietorship (as defined in 31 

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

22 10, 2006), or is registered as and eligible to do 

23 business within the United States or a State; 


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1 ‘‘(B) has maintained a deposit account 

2 with the depository institution for at least 12 

3 months; and 

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

5 multiple currency transactions that are subject 

6 to the reporting requirements of subsection (a). 

7 ‘‘(3) REGULATIONS.— 

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

9 Treasury shall prescribe regulations requiring a 

10 depository institution to file a 1-time notice of 

11 designation of exemption for each qualified cus12 tomer of the depository institution. 

13 ‘‘(B) FORM AND CONTENT OF EXEMPTION

14 NOTICE.—The Secretary shall by regulation 

15 prescribe the form, manner, content, and timing 

16 of the qualified customer exemption notice and 

17 such notice shall include information sufficient 

18 to identify the qualified customer and the ac19 counts of the customer. 

20 ‘‘(C) AUTHORITY OF SECRETARY.— 

21 ‘‘(i) IN GENERAL.—The Secretary 

22 may suspend, reject, or revoke any quali23 fied customer exemption notice, in accord24 ance with criteria prescribed by the Sec25 retary by regulation. 


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1 ‘‘(ii) CONDITIONS.—The Secretary 

2 may establish conditions, in accordance 

3 with criteria prescribed by regulation, 

4 under which exempt qualified customers of 

5 an insured depository institution that is 

6 merged with or acquired by another in7 sured depository institution will continue 

8 to be treated as designated exempt quali9 fied customers of the surviving or acquir10 ing institution.’’. 

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

12 of the 3-year period beginning on the date of the enact13 ment of this Act, the Secretary of the Treasury, in con14 sultation with the Attorney General, the Secretary of 

15 Homeland Security, the Federal banking agencies, the 

16 banking industry, and such other persons as the Secretary 

17 deems appropriate, shall evaluate the operations and effect 

18 of the provisions of the amendment made by subsection 

19 (a) and make recommendations to Congress as to any leg20 islative action with respect to such provision as the Sec21 retary may determine to be appropriate. 

Æ 


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