I

103D CONGRESS

1ST SESSION H. R. 2350

To require depository institutions to offer basic financial services accounts,

and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

JUNE 9, 1993

Mr. TORRES introduced the following bill; which was referred to the

Committee on Banking, Finance and Urban Affairs

A BILL

To require depository institutions to offer basic financial

services accounts, 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 ‘‘Financial Services Ac5 cess Act of 1993’’.

6 SEC. 2. BASIC FINANCIAL SERVICES ACCOUNTS REQUIRED.

7 (a) IN GENERAL.—Each depository institution shall

8 offer a basic financial services account which, at the elec9 tion of the account holder, may be used to obtain—

10 (1) basic transaction account services; or
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1 (2) government check cashing account services.

2 (b) REQUIREMENTS FOR BASIC FINANCIAL SERVICES

3 ACCOUNTS.—A basic financial services account shall meet

4 the requirements of this Act. A basic financial services ac5 count does not meet the requirements of this Act if it—

6 (1) requires any other relationship with the de7 pository institution, except as provided in section 7;

8 (2) allows a depository institution to discrimi9 nate against low-income individuals on the basis of

10 race, color, national origin, sex, age, marital status,

11 receipt of public assistance, source of income, exer12 cise of any rights under consumer protection stat13 utes, employment status, or access to credit in order

14 to use such basic financial services account; or

15 (3) requires the account holder exclusively to

16 use direct deposit services, automated teller ma17 chines, or other nonteller services for such basic fi18 nancial services account.

19 (c) EXEMPTION FOR CERTAIN INDIVIDUALS.—A de20 pository institution is not required to provide a basic fi21 nancial services account to any individual who—

22 (1) has a deposit account relationship at the de23 pository institution or any other depository institu24 tion; or
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1 (2) has a government check cashing relation2 ship at the depository institution or any other depos3 itory institution.

4 (d) EXEMPTION FROM BASIC TRANSACTION SERV5 ICES REQUIREMENTS.—Any depository institution that on

6 the effective date of this Act offers basic transaction serv7 ices that are, from an account holder’s perspective, com8 parable to or more favorable than those services prescribed

9 in subsection (a)(1), shall be exempt from section 4 for

10 as long as it continues to offer comparable or more favor11 able basic transaction services.

12 (e) EXEMPTION FROM CHECK CASHING SERVICES

13 REQUIREMENTS.—Any depository institution that on the

14 effective date of this Act offers government check cashing

15 services that, from an account holder’s perspective, are

16 comparable to or more favorable than those services pre17 scribed in section 5, shall be exempt from subsection

18 (a)(2) for as long as it continues to offer comparable or

19 more favorable government check cashing services.

20 SEC. 3. ACCOUNT APPLICATIONS.

21 (a) IN GENERAL.—The Board shall develop a model

22 application form for the use of depository institutions in

23 offering a basic financial services account.
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1 (b) MINIMUM REQUIREMENTS.—The application

2 form developed by the Board, or a comparable form devel3 oped by a depository institution in lieu thereof, shall—

4 (1) be available at all the depository institu5 tion’s deposit taking offices that—

6 (A) open new accounts; and

7 (B) are staffed by individuals employed by

8 such depository institutions; and

9 (2) contain—

10 (A) the name, address, date of birth, hand11 written signature, and taxpayer identification

12 number or other identification number of the

13 applicant; and

14 (B) other information the Board reason15 ably determines to be necessary to provide basic

16 transaction account services and government

17 check cashing account services pursuant to this

18 section.

19 (c) IDENTIFICATION OF APPLICANT.—At the time of

20 application, an applicant may be required to present 2

21 forms of identification, 1 of which includes the signature

22 of the applicant and 1 of which either includes a photo23 graph or is the birth certificate of the applicant.

24 (d) OTHER SERVICES.—At the time of application,

25 an applicant may be required by the depository institution
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1 to sign a document in which the applicant states whether

2 he or she has, or has applied for, any other basic trans3 action services or government check cashing services.

4 (e) COPY PROVIDED.—The depository institution

5 shall provide the applicant a copy of the completed appli6 cation form demonstrating the fact that the application

7 has been received and filed with the depository institution

8 within 7 days after filing.

9 (f) REJECTION FOR FRAUD OR INTENTIONAL MATE10 RIAL MISREPRESENTATION.—

11 (1) IN GENERAL.—If, after review in good faith

12 of the application, a depository institution has rea13 son to believe that an applicant has committed or at14 tempted to commit fraud against a depository insti15 tution, has made an intentional material misrepre16 sentation in applying for a basic financial services

17 account, or has had an account closed pursuant to

18 section 4(a)(10), the depository institution may deny

19 service to the applicant.

20 (2) REQUIREMENTS.—A depository institution

21 which denies service to an applicant shall—

22 (A) provide the applicant with timely writ23 ten notice setting forth the reasons supporting

24 the depository institution’s denial of service and
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1 the procedures available to the applicant for fil2 ing a complaint, as provided in section 10; and

3 (B) maintain records and files with regard

4 to each denial made pursuant to this subsection

5 for a minimum period of 2 years from the date

6 of denial.

7 (3) FORM.—The Board shall develop a model

8 form for the use of depository institutions in notify9 ing applicants of a denial of service pursuant to this

10 subsection.

11 (g) INITIAL WAITING PERIOD.—The depository insti12 tution may impose a waiting period of not more than 7

13 days from the date of application before providing an ap14 plicant with a basic transaction services account or a gov15 ernment check cashing services account.

16 (h) IDENTIFICATION CARD.—If a depository institu17 tion issues an identification card to approved applicants,

18 it may assess a reasonable, cost-based charge for replace19 ment of a lost or stolen card.

20 SEC. 4. BASIC TRANSACTION SERVICES ACCOUNT RE21 QUIREMENTS.

22 (a) IN GENERAL.—An account is a basic transaction

23 services account for the purpose of section 2 if it is a

24 transaction account that—
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1 (1) is available to account holders who maintain

2 an average balance of not more than $750 during

3 each monthly period;

4 (2) does not require a minimum initial deposit

5 of more than $25 or minimum balance requirement

6 of more than $1;

7 (3) does not provide for the imposition of fees

8 other than—

9 (A) a monthly maintenance fee or service

10 charge that does not exceed the real, direct, and

11 demonstrable costs of providing the account (in12 cluding fraud losses and deposit insurance pre13 miums), as certified by the depository institu14 tion, plus a modest profit not to exceed 10 per15 cent of such costs;

16 (B) a reasonable, cost-based fee for check

17 printing;

18 (C) a reasonable, cost-based fee for proc19 essing checks returned for lack of sufficient

20 funds; and

21 (D) a reasonable, cost-based fee for trans22 actions in excess of the minimum number of al23 lowable transactions described in paragraph (5);

24 (4) permits checks, share drafts, electronic, or

25 other debit instruments to be drawn on the account
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1 for purposes of making payments or other transfers

2 to third parties;

3 (5) permits at least 10 withdrawals per month,

4 including withdrawals described in paragraph (4),

5 whether by check, share draft, in person, proprietary

6 automatic teller machines, or other means;

7 (6) provides the account holder with—

8 (A) a detailed periodic statement listing all

9 transactions for the period involved; or

10 (B) a passbook in which the depository in11 stitution enters all transactions for such ac12 count;

13 (7) does not require the depository institution

14 to pay interest on deposited funds;

15 (8) at the election of the account holder, allows

16 regularly recurring payments to the account holder

17 to be made by a pay or directly to the depository in18 stitution for direct deposit into the account of the

19 account holder, if the depository institution offers di20 rect deposit services to account holders;

21 (9) allows the depository institution—

22 (A) to market direct deposit services; and

23 (B) to offer cost-based discounts to ac24 count holders who elect to rely wholly or par-
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1 tially on direct deposit or automatic teller ma2 chines in conjunction with the account; and

3 (10) is subject to closure upon notice to the ac4 count holder due to—

5 (A) overdrafts, returned checks, or rejected

6 electronic debits with respect to an account on

7 3 distinct occasions within any 6-month period;

8 (B) fraudulent activity involving the ac9 count of such account holder; or

10 (C) failure by the account holder to abide

11 by the terms of the account, as provided in

12 paragraphs (1) through (3) of subsection (a).

13 (b) COST ANALYSIS.—For the purpose of subsection

14 (a)(3)(A), the depository institution shall base the month15 ly maintenance fee or service charge either on its own

16 study of costs (actual time and actual net processing

17 costs) or on functional cost analysis (actual time and ac18 tual net processing cost) studies of various types of deposi19 tory institutions performed by the Board.

20 SEC. 5. GOVERNMENT CHECK CASHING SERVICES AC21 COUNT REQUIREMENTS.

22 (a) IN GENERAL.—An account is a government check

23 cashing services account for the purpose of section 2 if

24 it—
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1 (1) Notwithstanding the Expedited Funds

2 Availability Act (12 U.S.C. 4001 et seq.), permits

3 the account holder immediately to cash government

4 checks in amounts of as much as $1,500, if—

5 (A) the account holder presents the check

6 and is the person to whom the check has been

7 issued; and

8 (B) the individual has applied to the de9 pository institution for government check cash10 ing services under section 3;

11 (2) does not require the account holder to pay

12 a monthly service charge or maintenance fee for

13 check cashing services;

14 (3) does not require the account holder to pay

15 a fee for the establishment of a check cashing ac16 count;

17 (4) does not have check cashing fees that ex18 ceed the real, direct, and demonstrable costs of pro19 viding check cashing account services (including

20 fraud losses), as certified by the depository institu21 tion, plus a modest profit not to exceed 10 percent

22 of such costs;

23 (5) allows the account holder to designate at

24 least 3 offices of the depository institution at which

25 to cash government checks, if such offices—
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1 (A) take deposits;

2 (B) open new accounts; and

3 (C) are staffed by individuals employed by

4 such depository institution;

5 unless the depository institution has fewer than 3 of6 fices which meet the requirements of subparagraphs

7 (A), (B), and (C); and

8 (6) permits the depository institution to require,

9 prior to cashing any government check, the account

10 holder to present—

11 (A) any identification described in section

12 3(c) or section 3(h); and

13 (B) the account holder’s government check

14 cashing services account number.

15 (b) COST ANALYSIS.—For the purpose of subsection

16 (a)(4), the depository institution shall base such check

17 cashing fees either on its own study of costs (actual time

18 and actual net processing cost) or on functional analysis

19 (actual time and actual net processing cost) studies of var20 ious types of depository institutions performed by the

21 Board.

22 SEC. 6. INFORMATION ON ACCOUNTS.

23 (a) DISPLAY.—

24 (1) IN GENERAL.—A depository institution shall

25 conspicuously display in its lobby and other public
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1 areas of the institution brochures, pamphlets, or

2 other written information that inform account hold3 ers and potential account holders that basic financial

4 services accounts are available.

5 (2) INFORMATION.—Such brochures, pam6 phlets, or other written information shall—

7 (A) clearly explain the material features

8 and limitations of basic transaction and govern9 ment check cashing services, including the costs

10 of utilizing basic transaction account services;

11 (B) state that further information concern12 ing such services is available from the deposi13 tory institution upon request; and

14 (C) include information concerning an ac15 count holder’s right to complain regarding non16 compliance with this Act.

17 (3) AVAILABILITY.—A depository institution

18 shall provide the information described in paragraph

19 (2) to any individual upon request.

20 (b) PUBLIC SERVICE ANNOUNCEMENTS AND MULTI

21 LANGUAGE NOTICES.—For the purpose of obtaining the

22 widest possible dissemination of information concerning

23 basic banking accounts available pursuant to this Act, par24 ticularly with respect to individuals whose ability to read

25 the English language is limited, the Board—
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1 (1) shall prepare public service announcements

2 describing the basic banking accounts available pur3 suant to this Act and make such announcements

4 available free of charge to broadcast or electronic

5 media;

6 (2) may prescribe regulations requiring deposi7 tory institutions to include a brief description of the

8 basic banking accounts available at such institution

9 in any advertisement by such institution in any

10 broadcast or electronic medium; and

11 (3) shall prescribe regulations which require

12 that, in the case of any branch or office (of a deposi13 tory institution) which is located in an area in which

14 more than an insignificant number of the residents

15 have a limited English proficiency, the information

16 required to be made available under subsection (a)

17 by such branch or office be written in any language

18 which is predominant among such residents (in addi19 tion to English).

20 SEC. 7. SPECIAL RULES FOR CREDIT UNIONS.

21 (a) BASIC TRANSACTION SERVICES.—Any credit

22 union which, in the ordinary course of business, offers

23 share draft accounts to its own members shall provide

24 basic transaction services pursuant to this Act to any indi25 vidual who is or becomes a member of such credit union
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1 if the individual complies with the requirements of this

2 Act.

3 (b) GOVERNMENT CHECK CASHING SERVICES.—Any

4 credit union which, in the ordinary course of business,

5 cashes share drafts or government checks for its own

6 members shall provide government check cashing services

7 pursuant to this Act to any individual who is or becomes

8 a member of such credit union if the individual complies

9 with the requirements of this Act.

10 SEC. 8. SPECIAL RULES FOR CERTAIN DEPOSITORY INSTI11 TUTIONS.

12 (a) INSTITUTIONS THAT DO NOT OFFER TRANS13 ACTION ACCOUNTS.—A depository institution, other than

14 a credit union, which does not, in the ordinary course of

15 business, offer transaction accounts to the general public,

16 is not required to provide basic transaction services.

17 (b) INSTITUTIONS THAT DO NOT CASH CHECKS.—

18 A depository institution which does not, in the ordinary

19 course of business, cash checks is not required to provide

20 government check cashing services.

21 SEC. 9. PREVENTING FRAUD LOSSES.

22 (a) IN GENERAL.—The Board may, upon petition by

23 any individual depository institution, suspend, by regula24 tion or order, any government check cashing services ac25 count requirement under this Act if the Board determines
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1 that the depository institution is experiencing an unac2 ceptable level of losses due to check-related fraud in pro3 viding such account services.

4 (b) SUSPENSION OF REQUIREMENTS.—The Board

5 may, by regulation or order, suspend any government

6 check cashing services account requirement imposed by

7 this Act for any class of checks if the Board determines

8 that—

9 (1) depository institutions are experiencing an

10 unacceptable level of losses due to check-related

11 fraud with respect to such class of checks; or

12 (2) there is reasonable cause to believe that

13 such class of checks is being used in a scheme to de14 fraud.

15 (c) REPORT.—Within 10 days of issuing any order

16 or prescribing any regulation under subsections (a) and

17 (b) of this section, the Board shall submit a report to the

18 Committee on Banking, Finance and Urban Affairs of the

19 House of Representatives and the Committee on Banking,

20 Housing, and Urban Affairs of the Senate, explaining the

21 reason for the order or regulation and the evidence consid22 ered in making the determination to issue an order or pre23 scribe a regulation.

24 (d) EXEMPTIONS.—This Act does not apply with re25 spect to any government check presented for cashing to
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1 a depository institution if the depository institution has

2 reason to believe that—

3 (1) such check is fraudulent, is being fraudu4 lently presented, or has been altered or forged;

5 (2) the individual presenting the check is mis6 representing or has misrepresented his or her iden7 tity;

8 (3) any form of identification that is presented

9 in connection with cashing such check has been al10 tered or forged; or

11 (4) the check will not be honored by the check12 issuing governmental authority.

13 For purposes of this subsection, a reasonable belief re14 quires the existence of facts which would give rise to a

15 well-grounded belief in the mind of a reasonable person.

16 SEC. 10. ADMINISTRATIVE ENFORCEMENT.

17 (a) IN GENERAL.—Compliance with the requirements

18 imposed under this Act shall be enforced under—

19 (1) section 8 of the Federal Deposit Insurance

20 Act—

21 (A) by the Office of the Comptroller of the

22 Currency with respect to national banks, and

23 Federal branches and Federal agencies of for24 eign banks;
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1 (B) by the Board of Governors of the Fed2 eral Reserve System with respect to member

3 banks of the Federal Reserve System (other

4 than national banks), and offices, branches, and

5 agencies of foreign banks located in the United

6 States (other than Federal branches, Federal

7 agencies, and insured State branches of foreign

8 banks);

9 (C) by the Board of Directors of the Fed10 eral Deposit Insurance Corporation with respect

11 to banks the deposits of which are insured by

12 the Federal Deposit Insurance Corporation

13 (other than members of the Federal Reserve

14 System) and insured State branches of foreign

15 banks; and

16 (D) by the Office of Thrift Supervision

17 with respect to Federal savings associations and

18 Federal savings banks; and

19 (2) section 206 of the Federal Credit Union

20 Act, by the National Credit Union Administration

21 Board, with respect to any insured credit union.

22 The terms used in paragraph (1) that are not defined in

23 this Act or otherwise defined in section 3(s) of the Federal

24 Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the
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1 meaning given to them in section 1(b) of the International

2 Banking Act of 1978 (12 U.S.C. 3101).

3 (b) ADDITIONAL ENFORCEMENT POWERS.—

4 (1) VIOLATION OF THIS SUBTITLE TREATED AS

5 VIOLATION OF OTHER ACTS.—For purposes of the

6 exercise by the appropriate Federal banking agency

7 of any such agency’s powers under any Act referred

8 to in subsection (a), a violation of a requirement im9 posed under this Act is deemed to be a violation of

10 a requirement imposed under that Act.

11 (2) ENFORCEMENT AUTHORITY UNDER OTHER

12 ACTS.—In addition to the appropriate Federal bank13 ing agency’s powers under any provision of law re14 ferred to in subsection (a), each such agency may

15 exercise, for purposes of enforcing this Act, any

16 other authority conferred on such agency by any

17 other law.

18 (c) COMPLAINTS BY INDIVIDUALS.—

19 (1) IN GENERAL.—The Board shall develop a

20 complaint form for individuals to use to report pos21 sible violations of this Act. Each appropriate Federal

22 banking agency that receives a complaint shall con23 duct an investigation as such agency deems nec24 essary. If such complaint is verified by an investiga25 tion, the agency shall carry out proper enforcement
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1 actions according to the authority conferred by this

2 subtitle. The agency shall provide the results of such

3 investigation and any enforcement actions in writing

4 to the complainant and the depository institution

5 that was investigated.

6 (2) TIME LIMIT ON FILING OF CERTAIN COM7 PLAINTS.—An agency shall not consider any com8 plaint that alleges the denial of an application for a

9 basic financial services account in violation of this

10 Act, if the complaint is filed more than 1 year after

11 the institution’s denial of the application.

12 SEC. 11. CIVIL LIABILITY.

13 (a) IN GENERAL.—Except as otherwise provided in

14 this section, any depository institution that fails to comply

15 with any requirement imposed under this Act with respect

16 to any person is liable to such person in an amount equal

17 to the sum of—

18 (1) any actual damage sustained by such person

19 as a result of the failure;

20 (2)(A) in the case of an individual action, such

21 amount as the court may allow, except that the li22 ability under this subparagraph shall not be less

23 than $100 nor greater than $1,000; or

24 (B) in the case of a class action, such amount

25 as the court may allow, except that as to each mem-
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1 ber of the class no minimum recovery shall be appli2 cable, and the total recovery under this subpara3 graph in any class action or series of class actions

4 arising out of the same failure to comply by the

5 same depository institution shall not be more than

6 the lesser of $500,000 or 1 percent of the net worth

7 of the depository institution; and

8 (3) in the case of any successful action to en9 force the foregoing liability, the costs of the action,

10 together with a reasonable attorney’s fee as deter11 mined by the court.

12 In determining the amount of award in any class action,

13 the court shall consider, among other relevant factors, the

14 amount of any actual damages awarded, the frequency

15 and persistence of failures of compliance by the depository

16 institution, the resources of the depository institution, the

17 number of persons adversely affected, and the extent to

18 which the depository institution’s failure of compliance

19 was intentional.

20 (b) LIMITATION ON LIABILITY.—A depository insti21 tution may not be held liable in any action brought under

22 this section for a violation of this Act if the depository

23 institution shows by a preponderance of evidence that the

24 violation was not intentional and resulted from a bona fide

25 error notwithstanding the maintenance of procedures rea-
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1 sonably adapted to avoid any such error. Examples of a

2 bona fide error include clerical, calculation, computer mal3 function and programing, and printing errors, except that

4 an error of legal judgment with respect to a person’s obli5 gations under this Act is not a bona fide error.

6 (c) JURISDICTION.—Any action under this section

7 may be brought in any United States district court, or

8 in any other court of competent jurisdiction, within one

9 year after the date of the occurrence of the violation.

10 (d) LIMITATION OF APPLICABILITY.—No provision of

11 this section imposing any liability shall apply to any act

12 done or omitted in good faith in conformity with any rule,

13 regulation, or interpretation thereof by the Board or in

14 conformity with any interpretation or approval by an offi15 cial or employee of the Federal Reserve System duly au16 thorized by the Board to issue such interpretations or ap17 provals under such procedures as the Board may prescribe

18 therefore, notwithstanding that after such act or omission

19 has occurred, such rule, regulation, interpretation, or ap20 proval is amended, rescinded, or determined by judicial or

21 other authority to be invalid for any reason.

22 SEC. 12. DEFINITIONS.

23 For the purposes of this Act—

24 (1) APPROPRIATE FEDERAL BANKING AGEN25 CY.—The term ‘‘appropriate Federal banking agen-
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1 cy’’ has the same meaning given such term by sec2 tion 3 of the Federal Deposit Insurance Act.

3 (2) BOARD.—The term ‘‘Board’’ means the

4 Board of Governors of the Federal Reserve System.

5 (3) DEPOSITORY INSTITUTION.—The term ‘‘de6 pository institution’’ means any federally insured de7 pository institution described in clauses (i) through

8 (vi) of section 19(b)(1)(A) of the Federal Reserve

9 Act.

10 (4) GOVERNMENT CHECK.—

11 (A) IN GENERAL.—The term ‘‘government

12 check’’ means any check that is issued by—

13 (i) the United States or any agency of

14 the United States;

15 (ii) any State or any agency of any

16 State, and that is presented for cashing

17 purposes within the State in which the

18 check was issued; or

19 (iii) any unit of local government or

20 any agency of any unit of local govern21 ment, including local government public as22 sistance payments, and that is presented

23 for cashing purposes within the unit of

24 local government in which the check was

25 issued.
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1 (B) EXCEPTIONS.—The term ‘‘government

2 check’’ does not include—

3 (i) State-issued payment warrants; or

4 (ii) checks issued by local government

5 special purpose districts or units.

6 (5) GOVERNMENT CHECK CASHING RELATION7 SHIP.—The term ‘‘government check cashing rela8 tionship’’ means an account relationship between an

9 individual and a depository institution under which

10 a government check cashing services account is pro11 vided pursuant to section 5 of this Act.

12 (6) STATE.—The term ‘‘State’’ has the mean13 ing given to such term in section 3(a) of the Federal

14 Deposit Insurance Act.

15 (7) TRANSACTION ACCOUNT.—The term ‘‘trans16 action account’’ has the meaning given such term by

17 section 19(b)(1)(C) of the Federal Reserve Act.

18 SEC. 13. EFFECTIVE DATE.

19 This Act shall become effective 12 months after the

20 date of enactment of this Act.

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