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 Ken-
tucky, 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 trans-
actions, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SEC. 1. SHORT TITLE. 
This Act may be cited as the ‘‘Seasoned Customer CTR 
Exemption Act of 2006’’. 
SEC. 2. EXCEPTION FROM CURRENCY TRANSACTION RE-
PORTS FOR SEASONED CUSTOMERS. 
(a) FINDINGS.—The Congress finds as follows: 
(1) The completion of and filing of currency 
transaction reports under section 5313 of title 31, 
United States Code, poses a compliance burden on the 
financial industry. 
(2) Due to the nature of the transactions or the 
persons and entities conducting such transactions, 
some reports as currently filed may not be relevant to 
the detection, deterrence, or investigation of financial 
crimes, including money laundering and the financ-
ing of terrorism. 
(3) However, the data contained in such reports 
can provide valuable context for the analysis of other 
data derived pursuant to subchapter II of chapter 53 
of title 31, United States Code, as well as investiga-
tive data, which provide invaluable and indispensable 
information supporting efforts to combat money laun-
dering and other financial crimes.
(4) An appropriate exemption process from the 
reporting requirements for certain currency trans-
actions that are of little or no value to ongoing efforts 
of law enforcement agencies, financial regulatory 
agencies, and the financial services industry to inves-
tigate, detect, or deter financial crimes would con-
tinue to fulfill the compelling need to produce and 
provide meaningful information to policy-makers, fi-
nancial regulators, law enforcement, and intelligence 
agencies, while potentially lowering the compliance 
burden placed on financial institutions by the need to 
file such reports. 
(5) The Secretary of the Treasury has by regula-
tion, and in accordance with section 5313 of title 31, 
United States Code, implemented a process by which 
institutions may seek exemptions from filing certain 
currency transaction reports based on appropriate 
circumstances; however, the financial industry has 
not taken full advantage of these provisions and has 
contended that they are unduly burdensome. 
(6) The act of providing notice to the Secretary 
of the Treasury of designations of exemption— 
(A) provides meaningful information to law 
enforcement officials on exempt customers and
enables law enforcement to obtain account infor-
mation through appropriate legal process; and 
(B) complements other sections of title 31, 
United States Code, whereby law enforcement 
can locate financial institutions with relevant 
records relating to a person of investigative in-
terest, such as information requests made pursu-
ant to regulations implementing section 314(a) 
of the USA PATRIOT Act of 2001. 
(7) A designation of exemption has no effect on 
requirements for depository institutions to apply the 
full range of anti-money laundering controls required 
under subchapter II of chapter 53 of title 31, United 
States Code, and related provisions of law, including 
the requirement to apply the customer identification 
program pursuant to section 5326 of such title, and 
the requirement to identify, monitor, and, if appro-
priate, report suspicious activity in accordance with 
section 5318(g) of such title. 
(8) The Federal banking agencies and the Finan-
cial Crimes Enforcement Network have recently pro-
vided guidance through the Federal Financial Institu-
tions Examination Council Bank Secrecy Act/Anti- 
Money Laundering Examination Manual on apply-
ing appropriate levels of due diligence and identi-
fying suspicious activity by the types of cash-inten-
sive businesses that generally will be subject to exemp-
tion. 
(b) 
SEASONED
CUSTOMER
EXEMPTION.—Section 
5313(e) of title 31, United States Code, is amended to read 
as follows: 
‘‘(e) QUALIFIED CUSTOMER EXEMPTION.— 
‘‘(1) IN GENERAL.—Before the end of the 270- 
day period beginning on the date of the enactment of 
the Seasoned Customer CTR Exemption Act of 2006, 
the Secretary of the Treasury shall prescribe regula-
tions that exempt any depository institution from fil-
ing a report pursuant to this section in a transaction 
for the payment, receipt, or transfer of United States 
coins or currency (or other monetary instruments the 
Secretary of the Treasury prescribes) with a qualified 
customer of the depository institution. 
‘‘(2) QUALIFIED CUSTOMER DEFINED.—For pur-
poses of this section, the term ‘qualified customer’, 
with respect to a depository institution, has such 
meaning as the Secretary of the Treasury shall pre-
scribe, which shall include any person that— 
‘‘(A) is incorporated or organized under the 
laws of the United States or any State, includ-
ing a sole proprietorship (as defined in 31
C.F.R. 103.22(d)(6)(vii), as in effect on May 10, 
2006), or is registered as and eligible to do busi-
ness within the United States or a State; 
‘‘(B) has maintained a deposit account with 
the depository institution for at least 12 months; 
and 
‘‘(C) has engaged, using such account, in 
multiple currency transactions that are subject 
to the reporting requirements of subsection (a). 
‘‘(3) REGULATIONS.— 
‘‘(A) IN
GENERAL.—The Secretary of the 
Treasury shall prescribe regulations requiring a 
depository institution to file a 1-time notice of 
designation of exemption for each qualified cus-
tomer of the depository institution. 
‘‘(B) FORM AND CONTENT OF EXEMPTION 
NOTICE.—The Secretary shall by regulation pre-
scribe the form, manner, content, and timing of 
the qualified customer exemption notice and such 
notice shall include information sufficient to 
identify the qualified customer and the accounts 
of the customer. 
‘‘(C) AUTHORITY OF SECRETARY.— 
‘‘(i) IN GENERAL.—The Secretary may 
suspend, reject, or revoke any qualified cus-
tomer exemption notice, in accordance with 
criteria prescribed by the Secretary by regu-
lation. 
‘‘(ii) 
CONDITIONS.—The 
Secretary 
may establish conditions, in accordance 
with criteria prescribed by regulation, 
under which exempt qualified customers of 
an insured depository institution that is 
merged with or acquired by another insured 
depository institution will continue to be 
treated as designated exempt qualified cus-
tomers of the surviving or acquiring institu-
tion.’’. 
(c) 3-YEAR REVIEW AND REPORT.—Before the end of 
the 3-year period beginning on the date of the enactment 
of this Act, the Secretary of the Treasury, in consultation 
with the Attorney General, the Secretary of Homeland Se-
curity, the Federal banking agencies, the banking industry, 
and such other persons as the Secretary deems appropriate, 
shall evaluate the operations and effect of the provisions of 
the amendment made by subsection (a) and make rec-
ommendations to Congress as to any legislative action with 
respect to such provision as the Secretary may determine 
to be appropriate.
SEC. 3. PERIODIC REVIEW OF REPORTING THRESHOLD AND 
ADJUSTMENT FOR INFLATION. 
Section 5318 of title 31, United States Code, is amend-
ed by adding at the end the following new subsection: 
‘‘(o) PERIODIC REVIEW OF REPORTING THRESHOLD 
AND ADJUSTMENT FOR INFLATION.— 
‘‘(1) IN GENERAL.—Before the end of the 90-day 
period beginning on the date of the enactment of the 
Seasoned Customer CTR Exemption Act of 2006 and 
at least every 5 years after the end of such period, the 
Secretary of the Treasury shall— 
‘‘(A) review the continuing appropriateness, 
relevance, and utility of each threshold amount 
or denomination established by the Secretary, in 
the Secretary’s discretion, for any report re-
quired by the Secretary under this subchapter; 
and 
‘‘(B) adjust each such amount, at such time 
and in such manner as the Secretary considers 
appropriate, for any inflation that the Secretary 
determines has occurred since the date any such 
amount was established or last adjusted, as the 
case may be. 
‘‘(2) REPORT.—Before the end of the 60-day pe-
riod beginning upon the completion of any review by 
the Secretary of the Treasury under paragraph (1),
the Secretary shall submit a report to the Congress 
containing the findings and conclusions of the Sec-
retary in connection with such review, together with 
an explanation for any adjustment, or lack of adjust-
ment, of any threshold amount or denomination by 
the Secretary as a result of such review, including the 
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 
Code, to reform certain requirements for report-
ing cash transactions, and for other purposes. 
JUNE 19, 2006 
Reported with an amendment, committed to the Com-
mittee of the Whole House on the State of the Union, 
and ordered to be printed