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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 United States ef-
forts to combat money laundering and other forms 
of illicit finance; 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. 
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SEC. 306. DISCRETIONARY SURPLUS FUNDS. 
(a) IN
GENERAL.—The dollar amount specified 
under section 7(a)(3)(A) of the Federal Reserve Act (12 
U.S.C. 289(a)(3)(A)) is reduced by $27,000,000. 
(b) EFFECTIVE DATE.—The amendment made by 
subsection (a) shall take effect on September 30, 2029. 
Passed the House of Representatives October 28, 
2019. 
Attest: 
CHERYL L. JOHNSON, 
Clerk. 
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