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respect to innovation and new technologies that may 
be used to comply with the requirements of the 
Bank Secrecy Act; 
‘‘(2) to support the implementation of respon-
sible innovation and new technology, in a manner 
that complies with the requirements of the Bank Se-
crecy Act; 
‘‘(3) to explore opportunities for public-private 
partnerships; and 
‘‘(4) to develop metrics of success. 
‘‘(d) FINCEN LAB.—The Innovation Lab established 
under subsection (a) within the Department of the Treas-
ury shall be a lab within the Financial Crimes Enforce-
ment Network. 
‘‘(e) FEDERAL
FUNCTIONAL
REGULATOR
DE-
FINED.—In this subsection, the term ‘Federal functional 
regulator’ means the Board of Governors of the Federal 
Reserve System, the Comptroller of the Currency, the 
Federal Deposit Insurance Corporation, the National 
Credit Union Administration, the Securities and Exchange 
Commission, and the Commodity Futures Trading Com-
mission.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
for subchapter II of chapter 53 of title 31, United States 
Code, is amended by adding at the end the following: 
‘‘5333. Innovation Labs.’’. 
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SEC. 303. INNOVATION COUNCIL. 
(a) IN GENERAL.—Subchapter II of chapter 53 of 
Title 31, United States Code, as amended by section 302, 
is further amended by adding at the end the following: 
‘‘§ 5334. Innovation Council 
‘‘(a) ESTABLISHMENT.—There is established the In-
novation Council (hereinafter in this section referred to 
as the ‘Council’), which shall consist of each Director of 
an Innovation Lab established under section 5334 and the 
Director of the Financial Crimes Enforcement Network. 
‘‘(b) CHAIR.—The Director of the Innovation Lab of 
the Department of the Treasury shall serve as the Chair 
of the Council. 
‘‘(c) DUTY.—The members of the Council shall co-
ordinate on activities related to innovation under the Bank 
Secrecy Act, but may not supplant individual agency de-
terminations on innovation. 
‘‘(d) MEETINGS.—The meetings of the Council— 
‘‘(1) shall be at the call of the Chair, but in no 
case may the Council meet less than semi-annually; 
‘‘(2) may include open and closed sessions, as 
determined necessary by the Council; and 
‘‘(3) shall include participation by public and 
private entities and law enforcement agencies. 
‘‘(e) REPORT.—The Council shall issue an annual re-
port, for each of the 7 years beginning on the date of en-
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actment of this section, to the Secretary of the Treasury 
on the activities of the Council during the previous year, 
including the success of programs as measured by metrics 
of success developed pursuant to section 5334(c)(4), and 
any regulatory or legislative recommendations that the 
Council may have.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
for subchapter II of chapter 53 of title 31, United States 
Code, is amended by adding the end the following: 
‘‘5334. Innovation Council.’’. 
SEC. 304. TESTING METHODS RULEMAKING. 
(a) IN GENERAL.—Section 5318 of title 31, United 
States Code, as amended by section 301, is further amend-
ed by adding at the end the following: 
‘‘(q) TESTING.— 
‘‘(1) IN
GENERAL.—The Secretary of the 
Treasury, in consultation with the head of each 
agency to which the Secretary has delegated duties 
or powers under subsection (a), shall issue a rule to 
specify— 
‘‘(A) with respect to technology and related 
technology-internal processes (‘new technology’) 
designed to facilitate compliance with the Bank 
Secrecy Act requirements, the standards by 
which financial institutions are to test new 
technology; and 
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‘‘(B) in what instances or under what cir-
cumstance and criteria a financial institution 
may replace or terminate legacy technology and 
processes for any examinable technology or 
process without the replacement or termination 
being determined an examination deficiency. 
‘‘(2) STANDARDS.—The standards described 
under paragraph (1) may include— 
‘‘(A) an emphasis on using innovative ap-
proaches, such as machine learning, rather than 
rules-based systems; 
‘‘(B) risk-based back-testing of the regime 
to facilitate calibration of relevant systems; 
‘‘(C) requirements for appropriate data 
privacy and security; and 
‘‘(D) a requirement that the algorithms 
used by the regime be disclosed to the Financial 
Crimes Enforcement Network, upon request. 
‘‘(3) CONFIDENTIALITY OF ALGORITHMS.—If a 
financial institution or any director, officer, em-
ployee, or agent of any financial institution, volun-
tarily or pursuant to this subsection or any other au-
thority, discloses the institution’s algorithms to a 
Government agency, such algorithms and any mate-
rials associated with the creation of such algorithms 
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shall be considered confidential and not subject to 
public disclosure.’’. 
(b) UPDATE OF MANUAL.—The Financial Institu-
tions Examination Council shall ensure— 
(1) that any manual prepared by the Council is 
updated to reflect the rulemaking required by the 
amendment made by subsection (a); and 
(2) that financial institutions are not penalized 
for the decisions based on such rulemaking to re-
place or terminate technology used for compliance 
with the Bank Secrecy Act (as defined under section 
5312 of title 31, United States Code) or other anti- 
money laundering laws. 
SEC. 305. FINCEN STUDY ON USE OF EMERGING TECH-
NOLOGIES. 
(a) STUDY.— 
(1) IN GENERAL.—The Director of the Finan-
cial Crimes Enforcement Network (‘‘FinCEN’’) shall 
carry out a study on— 
(A) the status of implementation and in-
ternal use of emerging technologies, including 
artificial intelligence (‘‘AI’’), digital identity 
technologies, blockchain technologies, and other 
innovative technologies within FinCEN; 
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(B) whether AI, digital identity tech-
nologies, blockchain technologies, and other in-
novative technologies can be further leveraged 
to make FinCEN’s data analysis more efficient 
and effective; and 
(C) how FinCEN could better utilize AI, 
digital identity technologies, blockchain tech-
nologies, and other innovative technologies to 
more actively analyze and disseminate the infor-
mation it collects and stores to provide inves-
tigative leads to Federal, State, Tribal, and 
local law enforcement, and other Federal agen-
cies (collective, ‘‘Agencies’’), and better support 
its ongoing investigations when referring a case 
to the Agencies. 
(2) INCLUSION OF GTO DATA.—The study re-
quired under this subsection shall include data col-
lected through the Geographic Targeting Orders 
(‘‘GTO’’) program. 
(3) CONSULTATION.—In conducting the study 
required under this subsection, FinCEN shall con-
sult with the Directors of the Innovations Labs es-
tablished in section 302. 
(b) REPORT.—Not later than the end of the 6-month 
period beginning on the date of the enactment of this Act, 
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the Director shall issue a report to the Committee on 
Banking, Housing, and Urban Affairs of the Senate and 
the Committee on Financial Services of the House of Rep-
resentatives containing— 
(1) all findings and determinations made in car-
rying out the study required under subsection (a); 
(2) with respect to each of subparagraphs (A), 
(B) and (C) of subsection (a)(1), any best practices 
or significant concerns identified by the Director, 
and their applicability to AI, digital identity tech-
nologies, blockchain technologies, and other innova-
tive technologies with respect to U.S. efforts to com-
bat money laundering and other forms of illicit fi-
nance; and 
(3) any policy recommendations that could fa-
cilitate and improve communication and coordination 
between the private sector, FinCEN, and Agencies 
through the implementation of innovative ap-
proaches, in order to meet their Bank Secrecy Act 
(as defined under section 5312 of title 31, United 
States Code) and anti-money laundering compliance 
obligations. 
SEC. 306. DISCRETIONARY SURPLUS FUNDS. 
(a) IN GENERAL.—Section 7(a)(3)(A) of the Federal 
Reserve Act (12 U.S.C. 289(a)(3)(A)) is amended by 
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striking 
‘‘$6,825,000,000’’ 
and 
inserting 
‘‘$6,798,000,000’’. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on September 30, 2029. 
Passed the House of Representatives October 22, 
2019. 
Attest: 
CHERYL L. JOHNSON, 
Clerk. 
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