(10) Anti-money laundering deficiencies often 
reflect weaknesses in the management of a financial 
firm, which can in turn adversely affect the firm’s 
overall safety and soundness. Failure to account for 
management deficiencies in this context may perpet-
uate a false perception of the stability of financial 
firms. 
(11) Anti-money laundering examinations in re-
cent years at times failed to recognize the cumu-
lative effect of the violations they cited, instead nar-
rowly focusing their attention on individual banking 
units. The failure to review the cumulative effect of 
such violations permitted national banks to avoid 
and delay correcting problems, which allowed mas-
sive problems to occur before serious enforcement 
actions were taken. 
(12) Independent contractors often play a cen-
tral role in monitoring and auditing the overall ade-
quacy and effectiveness of a bank’s compliance pro-
gram under the Bank Secrecy Act. Any failure to 
hold these independent entities to the same standard 
as any other party who participates in the affairs of 
a bank may jeopardize the efficacy of a bank’s anti- 
money laundering program. 
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(13) Collaboration is an essential component of 
the U.S. strategy against money laundering, and is 
critical to our national security. U.S. law enforce-
ment agencies are most effective when they work to-
gether by sharing information, insight, and data. 
(14) The flow of information related to sus-
picious activity from financial institutions to law en-
forcement plays a key role in facilitating the disrup-
tion of terrorist networks that seek to harm the 
United States. The flow of such information depends 
on a high degree of certainty that financial institu-
tions will be protected from civil liability when shar-
ing such information with Federal law enforcement 
agencies. 
(15) Whistleblower rights and protections play 
an important role in helping to ensure corporate in-
tegrity. Robust protections for whistleblowers and 
enhanced rewards for informants will incentivize 
compliance with anti-money laundering rules and 
procedures, and encourage the provision of valuable 
information to regulators and law enforcement agen-
cies. 
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TITLE I—HOLDING EXECUTIVES 
RESPONSIBLE FOR VIOLATIONS 
SEC. 101. PENALTIES FOR VIOLATIONS OF THE BANK SE-
CRECY ACT. 
(a) CIVIL MONETARY PENALTIES FOR WILLFUL VIO-
LATIONS.—Section 5321(a) of title 31, United States 
Code, is amended— 
(1) by striking ‘‘(a)(1) A domestic financial in-
stitution’’ and inserting the following: 
‘‘(a) IN GENERAL.— 
‘‘(1) CIVIL MONETARY PENALTIES FOR WILL-
FUL VIOLATIONS.—A domestic financial institution’’; 
(2) in paragraph (1)— 
(A) by striking ‘‘willfully violating’’ each 
place such term appears and inserting ‘‘willfully 
violating, or willfully causing any violation of,’’; 
(B) by striking ‘‘the amount (not to exceed 
$100,000) involved in the transaction (if any) 
or $25,000’’ and inserting ‘‘10 times the 
amount (not to exceed $10,000,000) involved in 
the transaction (if any) or $250,000’’; and 
(C) by adding at the end the following: ‘‘In 
determining 
appropriate 
monetary 
penalty 
amounts under this paragraph, the Secretary 
has the authority to ensure that penalty 
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amounts are commensurate with the nature of 
the violations, any patterns of violations, and, 
with respect to a financial institution or non-
financial trade or business, the size, capitaliza-
tion and market share of such institution or 
trade or business.’’; and 
(3) in paragraph (4)(A), by inserting after 
‘‘who violates’’ the following: ‘‘, or causes any viola-
tion of,’’. 
(b) CIVIL MONETARY PENALTIES FOR NEGLIGENT 
VIOLATIONS.—Section 5321(a)(6) of title 31, United 
States Code, is amended to read as follows: 
‘‘(6) NEGLIGENCE.— 
‘‘(A) IN
GENERAL.—The Secretary of the 
Treasury may impose a civil money penalty, for neg-
ligent violations of any provision of this subchapter 
or any regulation prescribed under this subchapter, 
of not more than— 
‘‘(i) $50,000, with respect to a financial in-
stitution or nonfinancial trade or business; and 
‘‘(ii) $5,000, with respect to any partner, 
director, officer, or employee of an institution, 
trade, or business. 
‘‘(B) VIOLATIONS
OF
THE
REQUIREMENT
TO 
MAINTAIN PROCEDURES TO ENSURE COMPLIANCE.— 
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For a violation of a regulation prescribed under sec-
tion 5318(a)(2), a separate violation occurs for each 
day the violation continues and at each office, 
branch, or place of business at which a violation oc-
curs or continues. 
‘‘(C) DETERMINATION OF PENALTY AMOUNT.— 
In 
determining 
appropriate 
monetary 
penalty 
amounts under this paragraph, the Secretary has 
the authority to ensure that penalty amounts are 
commensurate with the nature of the violations, any 
patterns of violations, and, with respect to a finan-
cial institution or nonfinancial trade or business, the 
size, capitalization and market share of such institu-
tion or trade or business.’’. 
SEC. 102. CRIMINAL PENALTIES. 
(a) IN GENERAL.—Section 5322 of title 31, United 
States Code, is amended— 
(1) by redesignating subsections (c) and (d) as 
subsections (d) and (e), respectively; 
(2) by inserting after subsection (b) the fol-
lowing: 
‘‘(c) FACILITATING EVASION.—In the case of a per-
son described under subsection (a) or (b) who additionally 
takes steps to facilitate evasion of a program or controls 
under a regulation prescribed or order issued under this 
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subchapter (except section 5315 or 5324 of this title or 
a regulation prescribed under section 5315 or 5324), sec-
tion 21 of the Federal Deposit Insurance Act, or section 
123 of Public Law 91–508, the maximum prison terms 
under such subsections shall be treated as 20 years.’’; and 
(3) by adding at the end the following: 
‘‘(f) REPORT.—In any case in which the Department 
of Justice settles a case with an individual or institution 
for violations under the this subchapter in exchange for 
a monetary penalty, the Department shall report to the 
Congress on why it did or did not pursue prison sentences 
in conjunction with the monetary penalty.’’. 
(b) GAO REVIEW OF BANK SECRECY ACT CRIMINAL 
SENTENCES AND MANDATORY MINIMUM SENTENCING.— 
(1) STUDY.—The Comptroller General of the 
United States shall carry out a study of the manda-
tory minimum sentencing laws and guidelines for 
narcotics-related offenses and the prosecutorial dis-
cretion provided to the Department of Justice in de-
termining criminal penalties for persons found guilty 
of violating Federal anti-money laundering laws. In 
carrying out such study, the Comptroller General 
shall compare and contrast the severity of the two 
sets of felonies. 
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(2) REPORT.—Not later than the end of the 6- 
month period following the date of the enactment of 
this Act, the Comptroller General shall issue a re-
port to the Congress containing all findings and de-
terminations made in carrying out the study re-
quired by subsection (a), including any disparities 
identified in the appropriateness of the differing sen-
tencing procedures and recommendations for estab-
lishing a more balanced sentencing system for Fed-
eral felonious acts. 
SEC. 103. STRENGTHENING CIVIL INJUNCTIVE AUTHORITY. 
Section 5320 of title 31, United States Code, is 
amended— 
(1) by striking ‘‘When the Secretary’’ and in-
serting the following: 
‘‘(a) IN GENERAL.—When the Secretary’’; 
(2) by inserting after ‘‘will violate’’ the fol-
lowing: ‘‘or has caused, is causing, or will cause a 
violation of’’; and 
(3) by inserting at the end the following: 
‘‘(b) PROHIBITION ON CERTAIN INDIVIDUALS.—In 
any proceeding under subsection (a), the court may pro-
hibit, conditionally or unconditionally, and permanently or 
for such period of time as it shall determine, any indi-
vidual who violated this subchapter, or a regulation pre-
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scribed or order issued under this subchapter, from acting 
as an officer or director of a financial institution if the 
person’s conduct demonstrates unfitness to serve as an of-
ficer or director of a financial institution.’’. 
SEC. 104. CLARIFICATION OF REMOVAL AND PROHIBITION 
AUTHORITY UNDER THE FDIA. 
Section 8(e)(2)(A) of the Federal Deposit Insurance 
Act (12 U.S.C. 1818(e)(2)(A)) is amended— 
(1) in clause (i), by striking ‘‘was not inad-
vertent or unintentional’’ and inserting ‘‘involved a 
reckless disregard for the law or any applicable regu-
lations or prior order of the appropriate Federal 
banking agency’’; and 
(2) in clause (ii), by striking ‘‘has knowledge’’ 
and inserting ‘‘knew, or should have known,’’. 
SEC. 105. INDEPENDENT LITIGATION AUTHORITY FOR 
FINCEN. 
Section 310 of title 31, United States Code, is 
amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) INDEPENDENT
LITIGATION
AUTHORITY.— 
FinCEN may act in its own name and through its own 
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attorneys in enforcing any provision of subchapter II of 
chapter 53, section 21 of the Federal Deposit Insurance 
Act, section 123 of Public Law 91–508, any rules there-
under, or any other law or regulation, or in any action, 
suit, or proceeding relating to such laws or regulations to 
which the Financial Crimes Enforcement Network is a 
party.’’. 
SEC. 106. TREATMENT OF EXECUTIVE COMPENSATION AND 
PERSONAL LIABILITY. 
(a) CERTAIN EXECUTIVE COMPENSATION INCEN-
TIVES BARRED.—The appropriate Federal banking agen-
cies, the Securities and Exchange Commission, the Com-
modities Futures Trading Commission, and the Financial 
Crimes Enforcement Network shall issue regulations pro-
hibiting financial institutions that are subject to an anti- 
money laundering program requirement under chapter X 
of title 31, Code of Federal Regulations, from providing 
executive compensation based on any criteria that could 
undermine compliance by individuals with the require-
ments of subchapter II of chapter 53 of title 31, United 
States Code, section 21 of the Federal Deposit Insurance 
Act (12 U.S.C. 1829b), or section 123 of Public Law 91– 
508. 
(b) NO AVOIDANCE OF PERSONAL LIABILITY.— 
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(1) IN
GENERAL.—An officer, director, em-
ployee, or other institution-affiliated party of a fi-
nancial institution that is subject to an anti-money 
laundering program requirement under chapter X of 
title 31, Code of Federal Regulations, who is re-
quired by a Federal bank secrecy law that provides 
for personal liability, or any rule or order promul-
gated by an appropriate Federal banking agency, the 
Securities and Exchange Commission, the Com-
modity Futures Trading Commission, or the Finan-
cial Crimes Enforcement Network thereunder, to 
repay previously earned executive compensation or 
pay a civil money penalty— 
(A) shall be personally liable for the 
amounts so owed; and 
(B) may not, directly or indirectly, insure 
or hedge against, or otherwise transfer the risks 
associated with, personal liability for the 
amounts so owed. 
(2) RULE OF CONSTRUCTION.—Paragraph (1) 
shall not preclude a person from being provided 
funds necessary to defend against an action to re-
cover previously earned executive compensation or a 
civil money penalty described under paragraph (1)— 
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(A) from the relevant financial institution 
subject to an anti-money laundering program 
under chapter X of title 31, Code of Federal 
Regulations; 
(B) under an insurance policy; or 
(C) pursuant to court order. 
(c) DEFINITIONS.—For purposes of this section: 
(1) APPROPRIATE
FEDERAL
BANKING
AGEN-
CY.—The term ‘‘appropriate Federal banking agen-
cy’’ has the meaning given such term under section 
3 of the Federal Deposit Insurance Act (12 U.S.C. 
1813). 
(2) EXECUTIVE
COMPENSATION.—The term 
‘‘executive compensation’’ means anything of value, 
regardless of the form in which provided, that is 
given by any institution subject to subsection (a) or 
its parent company to an officer, director, employee, 
or other institution-affiliated party in return for that 
individual’s service to such entity. 
(3) FEDERAL BANK SECRECY LAW.—The term 
‘‘Federal bank secrecy law’’ means— 
(A) the reporting requirements set forth in 
section 21 of the Federal Deposit Insurance Act 
(12 U.S.C. 1829b); 
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(B) section 123 of Public Law 91–508; 
and 
(C) subchapter II of chapter 53 of title 31, 
United States Code. 
(4) 
INSTITUTION-AFFILIATED
PARTY.—The 
term ‘‘institution-affiliated party’’— 
(A) has the meaning given such term 
under subsection (u) of section 3 of the Federal 
Deposit Insurance Act (12 U.S.C. 1813); and 
(B) shall apply with respect to an institu-
tion subject to subsection (a) and its parent 
company to the same extent as such subsection 
applies to an insured depository institution. 
SEC. 107. CORPORATE GOVERNANCE AND THE LEGAL RE-
SPONSIBILITIES. 
(a) IN GENERAL.—Chapter 53 of title 31, United 
States Code, is amended— 
(1) by inserting after section 5322, the fol-
lowing: 
‘‘§ 5322A. Corporate governance and the legal respon-
sibility of officers and employees 
‘‘(a) ENSURING COMPLIANCE.—The Secretary of the 
Treasury, in consultation with the appropriate Federal 
banking agencies, the Securities and Exchange Commis-
sion, and the Commodities Futures Trading Commission, 
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shall issue regulations requiring each financial institution 
that is subject to an anti-money laundering program re-
quirement under chapter X of title 31, Code of Federal 
Regulations, to ensure compliance with the anti-money 
laundering program requirements described under section 
5318(h) by establishing written policies, procedures, and 
risk management standards for ensuring compliance with 
the requirements of this subtitle that— 
‘‘(1) require the head of compliance for each 
business line of such institution to make regular re-
ports directly to the board of directors and the chief 
executive officer of such institution on the business 
line’s compliance activities; 
‘‘(2) require the board to certify each report re-
ceived pursuant to paragraph (1); 
‘‘(3) ensure adequate staffing and funding for 
entities within the institution responsible for compli-
ance with the requirements of this subtitle; and 
‘‘(4) periodically test the effectiveness of the in-
stitution’s programs for compliance with the require-
ments of this subtitle. 
‘‘(b) LEGAL RESPONSIBILITY OF CERTAIN OFFICERS 
AND EMPLOYEES.—With respect to any violation of this 
subtitle by each financial institution that is subject to an 
anti-money laundering program requirement under chap-
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ter X of title 31, Code of Federal Regulations, any officer 
or other employee who was in a position that would have 
enabled such officer or employee to materially affect com-
pliance with the requirements of this subtitle shall also 
be in violation of this subtitle, if such officer or other em-
ployee knew, or should have known, that such violation 
was being committed and did not take meaningful steps 
to stop such violation. 
‘‘(c) CLAWBACK EMPLOYMENT PROVISION.—Each fi-
nancial institution that is subject to an anti-money laun-
dering program requirement under chapter X of title 31, 
Code of Federal Regulations, shall, in each employment 
agreement entered into by such institution, include a pro-
vision that gives the institution the right to require the 
repayment of any bonus or other compensation paid to the 
employee in any case where such employee was violating 
a provision of this subchapter and knew, or should have 
known, of such violation. 
‘‘(d) DEFINITION.—For purposes of this section, the 
term ‘appropriate Federal banking agency’ has the mean-
ing given such term under section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813).’’; and 
(2) in the table of contents for such chapter, by 
inserting after the item relating to section 5322 the 
following new item: 
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‘‘5322A. Corporate governance and the legal responsibility of officers and em-
ployees.’’. 
(b) EFFECTIVE DATE.—The amendments made by 
subsection (a) shall apply to a financial institution (as 
such term is defined under section 5312 of title 31, United 
States Code) after the end of the 6-month period begin-
ning on the date of the enactment of this Act. 
TITLE II—STRENGTHENING OF 
REGULATORY 
OVERSIGHT 
AND ACCOUNTABILITY 
SEC. 201. REPORTING AND OVERSIGHT OF BANK SECRECY 
ACT-RELATED ENFORCEMENT ACTIONS. 
(a) IN GENERAL.—Chapter 53 of title 31, United 
States Code, is amended— 
(1) by inserting after section 5326 the fol-
lowing: 
‘‘§ 5327. Oversight of examination and enforcement 
activities 
‘‘(a) REPORTING OF ENFORCEMENT ACTIVITIES TO 
FINCEN.—Each appropriate Federal banking agency, the 
Securities and Exchange Commission, and the Commodity 
Futures Trading Commission shall report to FinCEN on 
each formal and informal enforcement or supervisory ac-
tion, including each matter requiring attention, and each 
matter requiring immediate attention, related to a viola-
tion of this subchapter or anti-money laundering defi-
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ciency, taken by such agency to enforce the requirements 
of this subchapter, including, for each such action— 
‘‘(1) the type of violation or deficiency with re-
spect to which the enforcement or supervisory action 
was taken; and 
‘‘(2) the specific type of formal or informal en-
forcement or supervisory action taken. 
‘‘(b) REVIEW OF REPORTS BY FINCEN.— 
‘‘(1) IN GENERAL.—FinCEN shall review all re-
ports submitted by agencies under subsection (a) to 
identify systemic or repeated instances of non-com-
pliance and, if FinCEN determines that an agency 
has failed to adequately or appropriately carry out 
the agency’s enforcement responsibilities with re-
spect to the requirements of this subchapter, 
FinCEN shall issue a report to such agency con-
taining an explanation of FinCEN’s determination. 
‘‘(2) REPORT
TO
THE
CONGRESS.—FinCEN 
shall issue an annual report to the Congress con-
taining— 
‘‘(A) a summary of all formal and informal 
enforcement or supervisory actions for which 
FinCEN received notification from the agencies 
under subsection (a), but without any privileged 
or confidential information contained in such 
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report, as identified by the agency submitting 
the report; and 
‘‘(B) 
any 
recommendations 
made 
by 
FinCEN to such agencies in response to a de-
termination by FinCEN that the agency failed 
to adequately or appropriately carry out the 
agency’s enforcement or supervisory responsi-
bility or failed to take adequate or appropriate 
corrective action in response to any individual 
violation or pattern of violations. 
‘‘(c) INSPECTOR
GENERAL
REVIEW
OF
PROCE-
DURES.—The Inspector General of each appropriate Fed-
eral banking agency shall— 
‘‘(1) carry out at least one review each year of 
the agency’s examination and enforcement activities 
with respect to ensuring compliance with the re-
quirements of this subchapter and ensuring ade-
quate resources are being devoted to such enforce-
ment; and 
‘‘(2) make such reviews available to the public, 
including on the website of the Inspector General. 
‘‘(d) DEFINITIONS.—For purposes of this section: 
‘‘(1) FINCEN.—The term ‘FinCEN’ means the 
Financial Crimes Enforcement Network. 
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‘‘(2) OTHER TERMS.—The terms ‘appropriate 
Federal banking agency’ and ‘insured depository in-
stitution’ have the meaning given those terms, re-
spectively, under section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813).’’; and 
(2) in the table of contents for such chapter, by 
inserting after the item relating to section 5326 the 
following new item: 
‘‘5327. Oversight of examination and enforcement activities.’’. 
(b) CONFIDENTIALITY OF INFORMATION SUBMITTED 
TO FINCEN.—Section 310 of title 31, United States 
Code, is amended— 
(1) by redesignating subsection (d) as sub-
section (e); and 
(2) by inserting after subsection (c) the fol-
lowing: 
‘‘(d) CONFIDENTIALITY
OF
INFORMATION
SUB-
MITTED TO FINCEN.—The submission by any appro-
priate Federal banking agency (as such term is defined 
under section 3 of the Federal Deposit Insurance Act) of 
any information to FinCEN for any purpose in the course 
of any supervisory or regulatory process of such agency 
shall not be construed as waiving, destroying, or otherwise 
affecting any privilege, including confidentiality of super-
visory information, that any agency or person may claim 
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with respect to such information under Federal or State 
law.’’. 
SEC. 202. CONSIDERATION OF BSA COMPLIANCE IN MAN-
AGEMENT RATINGS. 
(a) IN GENERAL.—To the extent there are ratings 
of a depository institution’s management and internal con-
trols, the appropriate Federal banking agencies shall con-
sider the extent to which the institution complies with the 
requirements of the Bank Secrecy Act. 
(b) DEFINITIONS.— 
(1) BANK SECRECY ACT.—The term ‘‘Bank Se-
crecy Act’’ has the meaning given the term ‘‘Federal 
bank secrecy law’’ under section 106(c)(5). 
(2) OTHER DEFINITIONS.—The terms ‘‘appro-
priate Federal banking agency’’ and ‘‘depository in-
stitution’’ have the meaning given those terms, re-
spectively, under section 3 of the Federal Deposit 
Insurance Act (12 U.S.C. 1813). 
TITLE III—CLARIFICATION OF 
SAFE HARBOR PROTECTIONS 
SEC. 301. SAFE HARBOR PROTECTIONS. 
(a) DISCLOSURE TO GOVERNMENT AGENCIES.—Sec-
tion 5318(g)(3)(B) of title 31, United States Code, is 
amended— 
(1) in clause (i), by striking ‘‘or’’ at the end; 
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(2) in clause (ii), by striking the period and in-
serting ‘‘; or’’; and 
(3) by adding at the end the following: 
‘‘(iii) any duty or requirement of a fi-
nancial institution or any director, officer, 
employee, or agent of such institution to 
demonstrate that a disclosure described in 
subparagraph (A) is made in good faith.’’. 
(b) DISCLOSURE
TO FINANCIAL INSTITUTIONS.— 
Section 314 of the USA PATRIOT Act (31 U.S.C. 5311 
note) is amended— 
(1) in subsection (b)— 
(A) by striking ‘‘terrorist or money laun-
dering activities’’ and inserting ‘‘terrorist or 
money laundering activities or a specified un-
lawful activity (as defined in section 1956(c)(7) 
of title 18, United States Code)’’; and 
(B) by striking ‘‘terrorist acts or money 
laundering activities’’ and inserting ‘‘such acts 
or activities’’; and 
(2) in subsection (c), by striking ‘‘terrorist acts 
or money laundering activities’’ and inserting ‘‘ter-
rorist or money laundering activities or a specified 
unlawful activity (as defined in section 1956(c)(7) of 
title 18, United States Code)’’. 
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TITLE IV—STRENGTHENING RE-
QUIREMENTS AND CLOSING 
LOOPHOLES 
SEC. 401. EXPANDING THE CRIMES THAT CAN BE A PREDI-
CATE OFFENSE TO MONEY LAUNDERING. 
Section 1956(c)(7) of title 18, United States Code, 
is amended to read as follows: 
‘‘(7) the term ‘specified unlawful activity’ 
means any act or activity constituting an offense in 
violation of the laws of the United States punishable 
by imprisonment for a term exceeding 1 year;’’. 
SEC. 402. CLOSING LOOPHOLES IN BANK SECRECY ACT RE-
PORTING. 
(a) REPORT TO CONGRESS ON THE STATUS OF THE 
TEMPORARY EXEMPTIONS.—FinCEN shall issue a report 
to Congress on the status of the temporary exemptions 
under section 1010.205(b) of title 31, Code of Federal 
Regulations, including any reviews, studies, or proposed 
or notice of a rulemaking that FinCEN has undertaken 
with regard to each financial institution that is exempted 
from the requirement concerning the establishment of 
anti-money laundering programs. The report shall also in-
clude a justification for the exemption of each category 
of financial institution exempted under the regulation. 
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provide to the whistleblower a statement of reasons 
that includes findings of fact and conclusions of law 
for all material issues. 
‘‘(d) REPRESENTATION.— 
‘‘(1) 
PERMITTED
REPRESENTATION.—Any 
whistleblower who makes a claim for an award under 
subsection (b) may be represented by counsel. 
‘‘(2) REQUIRED REPRESENTATION.— 
‘‘(A) IN
GENERAL.—Any whistleblower 
who anonymously makes a claim for an award 
under subsection (b) shall be represented by 
counsel if the whistleblower anonymously sub-
mits the information upon which the claim is 
based. 
‘‘(B) DISCLOSURE OF IDENTITY.—Prior to 
the payment of an award, a whistleblower shall 
disclose their identity and provide such other 
information as FinCEN may require, directly or 
through counsel for the whistleblower. 
‘‘(e) APPEALS.—Any determination made under this 
section, including whether, to whom, or in what amount 
to make awards, shall be in the discretion of FinCEN. 
Any such determination, except the determination of the 
amount of an award if the award was made in accordance 
with subsection (b), may be appealed to the appropriate 
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