I 

110TH CONGRESS 

1ST SESSION H. R. 1447 

To amend sections 5313 and 5318 of title 31, United States Code, to 

reform certain requirements for reporting cash transactions, and for 

other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 9, 2007 

Mr. JONES of North Carolina introduced the following bill; which was referred 

to the Committee on Financial Services 

A BILL 

To amend sections 5313 and 5318 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 ‘‘CTR Modernization 

5 Act’’. 

6 SEC. 2. PURPOSES. 

7 The purposes of this Act are as follows: 


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1 (1) To improve the quality and usefulness of 

2 currency transaction reports in criminal, tax, and 

3 regulatory investigations or proceedings. 

4 (2) To eliminate filing currency transaction re5 ports related to many innocent, infrequent, or idio6 syncratic deposit activities. 

7 (3) To further focus anti-money laundering in8 vestigations and prosecutions by reducing the num9 ber of spurious, duplicative, and innocent currency 

10 transaction reports and increasing the usefulness of 

11 suspicious activity reports. 

12 (4) To maintain the high degree of usefulness 

13 of currency transaction reports and adjust for infla14 tion and current financial practices the threshold for 

15 currency transaction reports to a level consistent 

16 with the amount established pursuant to Public Law 

17 91–508 upon the enactment of such Public Law in 

18 1970. 

19 (5) To increase the usefulness of data collected 

20 through currency transaction reports and suspicious 

21 activity reports and for other purposes. 

22 SEC. 3. MODIFICATION OF CURRENCY TRANSACTION RE23 PORTING THRESHOLD. 

24 (a) THRESHOLD.— 


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1 (1) NONDEPOSITORY INSTITUTIONS.—The 1st 

2 sentence of section 5313(a) of title 31, United 

3 States Code, is amended by inserting ‘‘, other than 

4 a depository institution,’’ after ‘‘domestic financial 

5 institution’’. 

6 (2) DEPOSITORY INSTITUTIONS.—Subsection 

7 (a) of section 5313 of title 31, United States Code, 

8 is amended by inserting after the 1st sentence (as 

9 amended by paragraph (1) of this subsection) the 

10 following new sentence: ‘‘When a depository institu11 tion is involved in a transaction for the payment, re12 ceipt, or transfer of United States coins or currency 

13 (or other monetary instruments the Secretary of the 

14 Treasury prescribes), in an amount, denomination, 

15 or amount and denomination of not less than 

16 $30,000 and under circumstances the Secretary pre17 scribes by regulation, the depository institution and 

18 any other participant in the transaction the Sec19 retary may prescribe shall file a report on the trans20 action at the time and in the way the Secretary pre21 scribes.’’. 

22 (b) REGULATION.—After the end of the 270-day pe23 riod beginning on the date of the enactment of the CTR 

24 Modernization Act, the Secretary of the Treasury shall not 

25 require a depository institution to file a currency transVerDate Aug 31 2005 23:15 Mar 10, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1447.IH H1447

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1 action report when the transaction involves the transfer 

2 of currency of an amount and denomination of less than 

3 $30,000. 

4 (c) TECHNICAL AND CONFORMING AMENDMENT.— 

5 Subsection (c) of section 5312 of title 31, United States 

6 Code, is amended by adding at the end the following new 

7 paragraph: 

8 ‘‘(2) DEPOSITORY INSTITUTION.—The term ‘de9 pository institution’ means any insured depository 

10 institution (as defined in section 3 of the Federal 

11 Deposit Insurance Act) and any insured credit union 

12 (as defined in section 101(7) of the Federal Credit 

13 Union Act).’’. 

14 SEC. 4. PERIODIC REVIEW OF REPORTING THRESHOLD 

15 AND ADJUSTMENT FOR INFLATION. 

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

17 amended by adding at the end the following new sub18 section: 

19 ‘‘(o) PERIODIC REVIEW OF REPORTING THRESHOLD

20 AND ADJUSTMENT FOR INFLATION.— 

21 ‘‘(1) IN GENERAL.—Before the end of the 5- 

22 year period beginning on the date of the enactment 

23 of the CTR Modernization Act and at least every 5 

24 years after the expiration of such period, the Sec25 retary of the Treasury shall— 


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1 ‘‘(A) solicit and review public comments 

2 about the appropriateness, relevance, and utility 

3 of the then-current threshold amount or de4 nomination established by the Secretary; 

5 ‘‘(B) review the continuing appropriate6 ness, relevance, and utility of each threshold 

7 amount or denomination established by the Sec8 retary, in the Secretary’s discretion, for any re9 port required by the Secretary under this sub10 chapter; and 

11 ‘‘(C) adjust such amount, at such time and 

12 in such manner as the Secretary considers ap13 propriate but in no case later than 365 days 

14 following the expiration of the public comment 

15 period, for any inflation that the Secretary of 

16 the Treasury determines has occurred since the 

17 date any such amount was established or last 

18 adjusted, except that the Secretary of the 

19 Treasury shall not reduce such amount to an 

20 amount and denomination of less than $30,000. 

21 ‘‘(2) REPORT.—Before the end of the 365-day 

22 period beginning upon the completion of any review 

23 by the Secretary of the Treasury under paragraph 

24 (1), the Secretary shall submit a report to the Con25 gress containing the findings and conclusions of the 


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1 Secretary in connection with such review, together 

2 with an explanation for any adjustment, or lack of 

3 adjustment, of any threshold amount or denomina4 tion by the Secretary as a result of such review, in5 cluding the adjustment for inflation.’’. 

6 SEC. 5. MODIFICATION OF EXEMPTION PROCESS. 

7 (a) SEASONED CUSTOMER EXEMPTION.—Subsection 

8 (e) of section 5313 of title 31, United States Code, is 

9 amended to read as follows: 

10 ‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 

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

12 day period beginning on the date of the enactment 

13 of the CTR Modernization Act, the Secretary of the 

14 Treasury shall prescribe regulations that exempt any 

15 depository institution from filing a report pursuant 

16 to this section in a transaction for the payment, re17 ceipt, or transfer of United States coins or currency 

18 (or other monetary instruments the Secretary of the 

19 Treasury prescribes) with a qualified customer of 

20 the depository institution. 

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

22 purposes of this section, the term ‘qualified cus23 tomer’, with respect to a depository institution, has 

24 such meaning as the Secretary of the Treasury shall 

25 prescribe, which shall include any person that— 


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1 ‘‘(A) is incorporated or organized under 

2 the laws of the United States or any State, in3 cluding a sole proprietorship (as defined in 31 

4 Code of Federal Regulations 103.22(d)(6)(vii), 

5 as in effect on May 10, 2006), or is registered 

6 as and eligible to do business within the United 

7 States or a State; 

8 ‘‘(B) has maintained a deposit account 

9 with the depository institution for at least 12 

10 months; and 

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

12 multiple currency transactions that are subject 

13 to the reporting requirements of subsection (a). 

14 ‘‘(3) REGULATIONS.— 

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

16 Treasury shall prescribe regulations requiring a 

17 depository institution to file a 1-time notice of 

18 designation of exemption for each qualified cus19 tomer of the depository institution. 

20 ‘‘(B) FORM AND CONTENT OF EXEMPTION

21 NOTICE.—The Secretary shall by regulation 

22 prescribe the form, manner, content, and timing 

23 of the qualified customer exemption notice and 

24 such notice shall include information sufficient 


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1 to identify the qualified customer and the ac2 counts of the customer. 

3 ‘‘(C) AUTHORITY OF SECRETARY.— 

4 ‘‘(i) IN GENERAL.—The Secretary 

5 may suspend, reject, or revoke any quali6 fied customer exemption notice, in accord7 ance with criteria prescribed by the Sec8 retary by regulation. 

9 ‘‘(ii) CONDITIONS.—The Secretary 

10 may establish conditions, in accordance 

11 with criteria prescribed by regulation, 

12 under which exempt qualified customers of 

13 an insured depository institution that is 

14 merged with or acquired by another in15 sured depository institution will continue 

16 to be treated as designated exempt quali17 fied customers of the surviving or acquir18 ing institution.’’. 

19 (b) 3-YEAR REVIEW AND REPORT.—Before the end 

20 of the 3-year period beginning on the date of the enact21 ment of this Act, the Secretary of the Treasury, in con22 sultation with the Attorney General, the Secretary of 

23 Homeland Security, the Federal banking agencies, the 

24 banking industry, and such other persons as the Secretary 

25 deems appropriate, shall evaluate the operations and effect 


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1 of the provisions of the amendment made by subsection 

2 (a) and make recommendations to the Congress as to any 

3 legislative action with respect to such provision as the Sec4 retary may determine to be appropriate. 

5 SEC. 6. IDENTIFYING SUSPICIOUS ACTIVITY. 

6 Subsection 5318(g) of title 31, United States Code, 

7 is amended by adding at the end the following new para8 graph: 

9 ‘‘(5) GUIDANCE ON WHEN TO FILE A RE10 PORT.—Before the end of the 270-day period begin11 ning on the date of the enactment of the CTR Mod12 ernization Act, the Secretary of the Treasury shall 

13 prescribe regulations that provide guidance on exam14 ples of transactions that— 

15 ‘‘(A) involved funds derived from illegal ac16 tivities; 

17 ‘‘(B) were designed to evade any require18 ments under this subchapter, chapter 2 of title 

19 I of Public Law 91–508, or the Internal Rev20 enue Code of 1986; and 

21 ‘‘(C) have no business or apparent lawful 

22 purpose.’’. 


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1 SEC. 7. PROVIDING GENERAL INFORMATION REGARDING 

2 SUSPICIOUS ACTIVITY REPORT REQUIRE3 MENTS. 

4 Subsection 5318(g) of title 31, United States Code, 

5 is amended by inserting after paragraph (5) (as added by 

6 section 6 of this Act) the following new paragraph: 

7 ‘‘(6) GENERAL NOTIFICATION TO CUS8 TOMERS.— 

9 ‘‘(A) IN GENERAL.—Before the end of the 

10 270-day period beginning on the date of the en11 actment of the CTR Modernization Act, the 

12 Secretary of the Treasury shall prescribe regu13 lations that create a list of information that 

14 may be disclosed to customers prior to the re15 porting of suspicious activity. 

16 ‘‘(B) RULE OF CONSTRUCTION.—Subpara17 graph (A) of this paragraph shall not be con18 strued as creating any immunity from the noti19 fication prohibition under paragraph (2).’’. 

Æ 


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