115
‘‘(I) the authority of the Cor-
poration under section 10(c) to con-
duct investigations; and 
‘‘(II) the enforcement authority 
of the Corporation under subsections 
(b), (c), (d) and (i) of section 8, 
as if such person were a state nonmember in-
sured bank. 
‘‘(D) OTHER
ACTIONS
PRESERVED.—No 
provision of this paragraph shall be construed 
as barring any action otherwise available, under 
the laws of the United States or any State, to 
any Federal or State law enforcement agency or 
individual.’’. 
(b) ENFORCEMENT ORDERS.—Section 8(c) of the 
Federal Deposit Insurance Act (12 U.S.C. 1818(c)) is 
amended by adding at the end the following new para-
graph: 
‘‘(4) FALSE
ADVERTISING
OR
MISUSE
OF 
NAMES TO INDICATE INSURED STATUS.—
‘‘(A) TEMPORARY ORDER.—
‘‘(i) IN
GENERAL.—If a notice of 
charges served under subsection (b)(1) of 
this section specifies on the basis of par-
ticular facts that any person is engaged in
116
conduct described in section 18(a)(4), the 
Corporation may issue a temporary order 
requiring—
‘‘(I) the immediate cessation of 
any activity or practice described, 
which gave rise to the notice of 
charges; and 
‘‘(II) affirmative action to pre-
vent any further, or to remedy any ex-
isting, violation. 
‘‘(ii) EFFECT OF ORDER.—Any tem-
porary order issued under this subpara-
graph shall take effect upon service. 
‘‘(B) EFFECTIVE PERIOD OF TEMPORARY 
ORDER.—A temporary order issued under sub-
paragraph (A) shall remain effective and en-
forceable, pending the completion of an admin-
istrative proceeding pursuant to subsection 
(b)(1) in connection with the notice of 
charges—
‘‘(i) until such time as the Corpora-
tion shall dismiss the charges specified in 
such notice; or
117
‘‘(ii) if a cease-and-desist order is 
issued against such person, until the effec-
tive date of such order. 
‘‘(C) CIVIL MONEY PENALTIES.—Violations 
of section 18(a)(4) shall be subject to civil 
money penalties as set forth in subsection (i) in 
an amount not to exceed $1,000,000 for each 
day during which the violation occurs or con-
tinues.’’. 
(c) TECHNICAL AND CONFORMING AMENDMENTS.—
(1) Section 18(a)(3) of the Federal Deposit In-
surance Act (12 U.S.C. 1828(a)) is amended—
(A) in the 1st sentence by striking ‘‘of this 
subsection’’ and inserting ‘‘of paragraphs (1) 
and (2)’’; 
(B) by striking the 2nd sentence; and 
(C) in the 3rd sentence, by striking ‘‘of 
this subsection’’ and inserting ‘‘of paragraphs 
(1) and (2)’’. 
(2) The heading for subsection (a) of section 18 
of the Federal Deposit Insurance Act (12 U.S.C. 
1828(a)) is amended by striking ‘‘INSURANCE 
LOGO.—’’ and inserting ‘‘REPRESENTATIONS
OF 
DEPOSIT INSURANCE.—’’.
118
SEC. 616. CHANGES REQUIRED TO SMALL BANK HOLDING 
COMPANY POLICY STATEMENT ON ASSESS-
MENT OF FINANCIAL AND MANAGERIAL FAC-
TORS. 
(a) SMALL
BANK
HOLDING
COMPANY
POLICY 
STATEMENT ON ASSESSMENT OF FINANCIAL AND MANA-
GERIAL FACTORS.—
(1) IN GENERAL.—Before the end of the 6-
month period beginning on the date of the enact-
ment of this Act, the Board of Governors of the 
Federal Reserve System shall publish in the Federal 
Register proposed revisions to the Small Bank Hold-
ing Company Policy Statement on Assessment of Fi-
nancial and Managerial Factors (12 C.F.R. part 
225—appendix C) that provide that the policy shall 
apply to a bank holding company which has pro 
forma 
consolidated 
assets 
of 
less 
than 
$1,000,000,000 and that—
(A) is not engaged in any nonbanking ac-
tivities involving significant leverage; and 
(B) does not have a significant amount of 
outstanding debt that is held by the general 
public. 
(2) ADJUSTMENT OF AMOUNT.—The Board of 
Governors of the Federal Reserve System shall an-
nually adjust the dollar amount referred to in para-
119
graph (1) in the Small Bank Holding Company Pol-
icy Statement on Assessment of Financial and Man-
agerial Factors by an amount equal to the percent-
age increase, for the most recent year, in total assets 
held by all insured depository institutions, as deter-
mined by the Board. 
(b) INCREASE IN DEBT-TO-EQUITY RATIO OF SMALL 
BANK HOLDING COMPANY.—Before the end of the 6-
month period beginning on the date of the enactment of 
this Act, the Board of Governors of the Federal Reserve 
System shall publish in the Federal Register proposed re-
visions to the Small Bank Holding Company Policy State-
ment on Assessment of Financial and Managerial Factors 
(12 C.F.R. part 225—appendix C) such that the debt-to-
equity ratio allowable for a small bank holding company 
in order to remain eligible to pay a corporate dividend and 
to remain eligible for expedited processing procedures 
under Regulation Y of the Board of Governors of the Fed-
eral Reserve System would increase from 1:1 to 3:1. 
SEC. 617. EXCEPTION TO ANNUAL PRIVACY NOTICE RE-
QUIREMENT UNDER THE GRAMM-LEACH-BLI-
LEY ACT. 
Section 503 of the Gramm-Leach-Bliley Act (15 
U.S.C. 6803) is amended by adding the following new sub-
sections:
120
‘‘(c) EXCEPTION
TO ANNUAL NOTICE REQUIRE-
MENT.—A financial institution that—
‘‘(1) provides nonpublic personal information 
only in accordance with the provisions of subsection 
(b)(2) or (e) of section 502 or regulations prescribed 
under section 504(b); 
‘‘(2) does not share information with affiliates 
under section 603(d)(2)(A) of the Fair Credit Re-
porting Act; and 
‘‘(3) has not changed its policies and practices 
with regard to disclosing nonpublic personal infor-
mation from the policies and practices that were dis-
closed in the most recent disclosure sent to con-
sumers in accordance with this subsection, 
shall not be required to provide an annual disclosure under 
this subsection until such time as the financial institution 
fails to comply with any criteria described in paragraph 
(1), (2), or (3). 
‘‘(d) EXCEPTION TO NOTICE REQUIREMENT.—A fi-
nancial institution shall not be required to provide any dis-
closure under this section if—
‘‘(1) the financial institution is licensed by a 
State and is subject to existing regulation of con-
sumer confidentiality that prohibits disclosure of 
nonpublic personal information without knowing and
121
expressed consent of the consumer in the form of 
laws, rules, or regulation of professional conduct or 
ethics promulgated either by the court of highest ap-
pellate authority or by the principal legislative body 
or regulatory agency or body of any State of the 
United States, the District of Columbia, any terri-
tory of the United States, Puerto Rico, Guam, 
American Samoa, the Trust Territory of the Pacific 
Islands, the Virgin Islands, or the Northern Mariana 
Islands; or 
‘‘(2) the financial institution is licensed by a 
State and becomes subject to future regulation of 
consumer confidentiality that prohibits disclosure of 
nonpublic personal information without knowing and 
expressed consent of the consumer in the form of 
laws, rules, or regulation of professional conduct or 
ethics promulgated either by the court of highest ap-
pellate authority or by the principal legislative body 
or regulatory agency or body of any State of the 
United States, the District of Columbia, any terri-
tory of the United States, Puerto Rico, Guam, 
American Samoa, the Trust Territory of the Pacific 
Islands, the Virgin Islands, or the Northern Mariana 
Islands.’’.
122
SEC. 618. BIENNIAL REPORTS ON THE STATUS OF AGENCY 
EMPLOYMENT OF MINORITIES AND WOMEN. 
(a) IN GENERAL.—Before December 31, 2005, and 
the end of each 2-year period beginning after such date, 
each Federal banking agency shall submit a report to the 
Congress on the status of the employment by the agency 
of minority individuals and women. 
(b) FACTORS TO BE INCLUDED.—The report shall 
include a detailed assessment of each of the following: 
(1) The extent of hiring of minority individuals 
and women by the agency as of the time the report 
is prepared. 
(2) The successes achieved and challenges faced 
by the agency in operating minority and women out-
reach programs. 
(3) Challenges the agency may face in finding 
qualified minority individual and women applicants. 
(4) Such other information, findings, and con-
clusions, and recommendations for legislative or 
agency action, as the agency may determine to be 
appropriate to include in the report. 
(c) DEFINITIONS.—For purposes of this section, the 
following definitions shall apply: 
(1) FEDERAL
BANKING
AGENCY.—The term 
‘‘Federal banking agency’’—
123
(A) has the same meaning as in section 
3(z) of the Federal Deposit Insurance Act; and 
(B) includes the National Credit Union 
Administration. 
(2) MINORITY.—The term ‘‘minority’’ has the 
same meaning as in section 1204(c)(3) of the Finan-
cial Institutions Reform, Recovery, and Enforcement 
Act of 1989. 
SEC. 619. COORDINATION OF STATE EXAMINATION AU-
THORITY. 
Section 10(h) of the Federal Deposit Insurance Act 
(12 U.S.C. 1820(h)) is amended to read as follows: 
‘‘(h) COORDINATION
OF EXAMINATION AUTHOR-
ITY.—
‘‘(1) STATE BANK SUPERVISORS OF HOME AND 
HOST STATES.—
‘‘(A) HOME STATE OF BANK.—The appro-
priate State bank supervisor of the home State 
of an insured State bank has authority to ex-
amine and supervise the bank. 
‘‘(B) HOST STATE BRANCHES.—The State 
bank supervisor of the home State of an in-
sured State bank and any State bank super-
visor of an appropriate host State shall exercise 
their respective authority to supervise and ex-
124
amine the branches of the bank in a host State 
in accordance with the terms of any applicable 
cooperative agreement between the home State 
bank supervisor and the State bank supervisor 
of the relevant host State. 
‘‘(C) SUPERVISORY FEES.—Except as ex-
pressly provided in a cooperative agreement be-
tween the State bank supervisors of the home 
State and any host State of an insured State 
bank, only the State bank supervisor of the 
home State of an insured State bank may levy 
or charge State supervisory fees on the bank. 
‘‘(2) HOST STATE EXAMINATION.—
‘‘(A) IN
GENERAL.—With respect to a 
branch operated in a host State by an out-of-
State insured State bank that resulted from an 
interstate merger transaction approved under 
section 44 or that was established in such State 
pursuant to section 5155(g) of the Revised 
Statutes, the third undesignated paragraph of 
section 9 of the Federal Reserve Act or section 
18(d)(4) of this Act, the appropriate State bank 
supervisor of such host State may—
‘‘(i) with written notice to the State 
bank supervisor of the bank’s home State
125
and subject to the terms of any applicable 
cooperative agreement with the State bank 
supervisor of such home State, examine 
such branch for the purpose of determining 
compliance with host State laws that are 
applicable pursuant to section 24(j) of this 
Act, including those that govern commu-
nity reinvestment, fair lending, and con-
sumer protection; and 
‘‘(ii) if expressly permitted under and 
subject to the terms of a cooperative agree-
ment with the State bank supervisor of the 
bank’s home State or if such out-of-State 
insured State bank has been determined to 
be in a troubled condition by either the 
State bank supervisor of the bank’s home 
State or the bank’s appropriate Federal 
banking agency, participate in the exam-
ination of the bank by the State bank su-
pervisor of the bank’s home State to ascer-
tain that the activities of the branch in 
such host State are not conducted in an 
unsafe or unsound manner. 
‘‘(B) NOTICE OF DETERMINATION.—
126
‘‘(i) IN
GENERAL.—The State bank 
supervisor of the home State of an insured 
State bank should notify the State bank 
supervisor of each host State of the bank 
if there has been a final determination that 
the bank is in a troubled condition. 
‘‘(ii) TIMING OF NOTICE.—The State 
bank supervisor of the home State of an 
insured State bank should provide notice 
under clause (i) as soon as reasonably pos-
sible but in all cases within 15 business 
days after the State bank supervisor has 
made such final determination or has re-
ceived written notification of such final de-
termination. 
‘‘(3) HOST STATE ENFORCEMENT.—If the State 
bank supervisor of a host State determines that a 
branch of an out-of-State State insured State bank 
is violating any law of the host State that is applica-
ble to such branch pursuant to section 24(j) of this 
Act, including a law that governs community rein-
vestment, fair lending, or consumer protection, the 
State bank supervisor of the host State or, to the ex-
tent authorized by the law of the host State, a host 
State law enforcement officer may, with written no-
127
tice to the State bank supervisor of the bank’s home 
State and subject to the terms of any applicable co-
operative agreement with the State bank supervisor 
of the bank’s home State, undertake such enforce-
ment actions and proceedings as would be permitted 
under the law of the host State as if the branch 
were a bank chartered by that host State. 
‘‘(4) COOPERATIVE AGREEMENT.—
‘‘(A) IN GENERAL.—The State bank super-
visors from 2 or more States may enter into co-
operative agreements to facilitate State regu-
latory supervision of State banks, including co-
operative agreements relating to the coordina-
tion of examinations and joint participation in 
examinations. For purposes of this subsection 
(h), the term ‘cooperative agreement’ means a 
written agreement that is signed by the home 
State bank supervisor and host State bank su-
pervisor to facilitate State regulatory super-
vision of State banks and includes nationwide 
or multi-state cooperative agreements and coop-
erative agreements solely between the home 
State and host State. 
‘‘(B) RULE
OF
CONSTRUCTION.—Except 
for State bank supervisors, no provision of this
128
subsection relating to such cooperative agree-
ments shall be construed as limiting in any way 
the authority of home and host State law en-
forcement officers, regulatory supervisors, or 
other officials that have not signed such cooper-
ative agreements to enforce host State laws that 
are applicable to a branch of an out-of-State in-
sured State bank located in the host State pur-
suant to section 24(j) of this Act. 
‘‘(5) FEDERAL REGULATORY AUTHORITY.—No 
provision of this subsection shall be construed as 
limiting in any way the authority of any Federal 
banking agency. 
‘‘(6) STATE
TAXATION
AUTHORITY
NOT
AF-
FECTED.—No provision of this subsection (h) shall 
be construed as affecting the authority of any State 
or political subdivision of any State to adopt, apply, 
or administer any tax or method of taxation to any 
bank, bank holding company, or foreign bank, or 
any affiliate of any bank, bank holding company, or 
foreign bank, to the extent such tax or tax method 
is otherwise permissible by or under the Constitution 
of the United States or other Federal law. 
‘‘(7) DEFINITIONS.—For purpose of this sec-
tion, the following definition shall apply:
129
‘‘(A) HOST STATE, HOME STATE, OUT-OF-
STATE BANK.—The terms ‘host State’, ‘home 
State’, and ‘out-of-State bank’ have the same 
meanings as in section 44(g). 
‘‘(B) STATE
SUPERVISORY
FEES.—The 
term ‘State supervisory fees’ means assess-
ments, examination fees, branch fees, license 
fees, and all other fees that are levied or 
charged by a State bank supervisor directly 
upon an insured State bank or upon branches 
of an insured State bank. 
‘‘(C) TROUBLED
CONDITION.—Solely for 
purposes of subparagraph (2)(B) of this sub-
section (h), an insured State bank has been de-
termined to be in ‘troubled condition’ if the 
bank—
‘‘(i) has a composite rating, as deter-
mined in its most recent report of exam-
ination, of 4 or 5 under the Uniform Fi-
nancial 
Institutions 
Ratings 
System 
(UFIRS); or 
‘‘(ii) is subject to a proceeding initi-
ated by the Corporation for termination or 
suspension of deposit insurance; or
130
‘‘(iii) is subject to a proceeding initi-
ated by the State bank supervisor of the 
bank’s home State to vacate, revoke, or 
terminate the charter of the bank, or to 
liquidate the bank, or to appoint a receiver 
for the bank. 
‘‘(D) FINAL
DETERMINATION.—For the 
purposes of paragraph (2)(B), the term ‘final 
determination’ means the transmittal of a re-
port of examination to the bank or transmittal 
of official notice of proceedings to the bank.’’. 
SEC. 620. NONWAIVER OF PRIVILEGES. 
(a) INSURED DEPOSITORY INSTITUTIONS.—Section 
18 of the Federal Deposit Insurance Act (12 U.S.C. 1828) 
is amended by adding at the end the following new sub-
section: 
‘‘(x) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO 
BANKING AGENCY OR SUPERVISOR.—
‘‘(1) IN GENERAL.—The submission by any per-
son of any information to any Federal banking agen-
cy, State bank supervisor, or foreign banking au-
thority for any purpose in the course of any super-
visory or regulatory process of such agency, super-
visor, or authority shall not be construed as waiving, 
destroying, or otherwise affecting any privilege such
131
person may claim with respect to such information 
under Federal or State law as to any person or enti-
ty other than such agency, supervisor, or authority. 
‘‘(2) RULE OF CONSTRUCTION.—No provision 
of paragraph (1) may be construed as implying or 
establishing that—
‘‘(A) any person waives any privilege appli-
cable to information that is submitted or trans-
ferred under any circumstance to which para-
graph (1) does not apply; or 
‘‘(B) any person would waive any privilege 
applicable to any information by submitting the 
information to any Federal banking agency, 
State bank supervisor, or foreign banking au-
thority, but for this subsection.’’. 
(b) INSURED CREDIT UNIONS.—Section 205 of the 
Federal Credit Union Act (12 U.S.C.1785) is amended by 
adding at the end the following new subsection: 
‘‘(j) PRIVILEGES NOT AFFECTED BY DISCLOSURE TO 
BANKING AGENCY OR SUPERVISOR.—
‘‘(1) IN GENERAL.—The submission by any per-
son of any information to the Administration, any 
State credit union supervisor, or foreign banking au-
thority for any purpose in the course of any super-
visory or regulatory process of such Board, super-
132
visor, or authority shall not be construed as waiving, 
destroying, or otherwise affecting any privilege such 
person may claim with respect to such information 
under Federal or State law as to any person or enti-
ty other than such Board, supervisor, or authority. 
‘‘(2) RULE OF CONSTRUCTION.—No provision 
of paragraph (1) may be construed as implying or 
establishing that—
‘‘(A) any person waives any privilege appli-
cable to information that is submitted or trans-
ferred under any circumstance to which para-
graph (1) does not apply; or 
‘‘(B) any person would waive any privilege 
applicable to any information by submitting the 
information to the Administration, any State 
credit union supervisor, or foreign banking au-
thority, but for this subsection.’’. 
SEC. 621. RIGHT TO FINANCIAL PRIVACY ACT OF 1978 
AMENDMENT. 
Paragraph (1) of section 1101 of the Right to Finan-
cial Privacy Act of 1978 (12 U.S.C. 3401) is amended 
by inserting ‘‘(including any lender who advances funds 
on pledges of personal property)’’ after ‘‘consumer finance 
institution’’.
133
SEC. 622. DEPUTY DIRECTOR; SUCCESSION AUTHORITY 
FOR DIRECTOR OF THE OFFICE OF THRIFT 
SUPERVISION. 
(a) ESTABLISHMENT OF POSITION OF DEPUTY DI-
RECTOR.—Section 3(c)(5) of the Home Owners’ Loan Act 
(12 U.S.C. 1462a(c)(5)) is amended to read as follows: 
‘‘(5) DEPUTY DIRECTOR.—
‘‘(A) IN GENERAL.—The Secretary of the 
Treasury shall appoint a Deputy Director and 
may appoint up to 3 additional Deputy Direc-
tors. 
‘‘(B) FIRST
DEPUTY
DIRECTOR.—If the 
Secretary of the Treasury appoints more than 
1 Deputy Director of the Office, the Secretary 
shall designate one such appointee as the First 
Deputy Director. 
‘‘(C) DUTIES.—Each Deputy Director ap-
pointed under this paragraph shall take an oath 
of office and perform such duties as the Direc-
tor shall direct. 
‘‘(D) COMPENSATION
AND
BENEFITS.—
The Director shall fix the compensation and 
benefits for each Deputy Director in accordance 
with this Act.’’.
134
(b) SERVICE OF DEPUTY DIRECTOR AS ACTING DI-
RECTOR.—Section 3(c)(3) of the Home Owners’ Loan Act 
(12 U.S.C. 1462a(c)(3)) is amended—
(1) by striking ‘‘VACANCY.—A vacancy in the 
position of Director’’ and inserting ‘‘VACANCY.—
‘‘(A) IN GENERAL.—A vacancy in the posi-
tion of Director’’; and 
(2) by adding at the end the following new sub-
paragraphs: 
‘‘(B) ACTING DIRECTOR.—
‘‘(i) IN GENERAL.—In the event of a 
vacancy in the position of Director or dur-
ing the absence or disability of the Direc-
tor, the Deputy Director shall serve as 
Acting Director. 
‘‘(ii) SUCCESSION IN CASE OF 2 OR 
MORE DEPUTY DIRECTORS.—If there are 2 
or more Deputy Directors serving at the 
time a vacancy in the position of Director 
occurs or the absence or disability of the 
Director commences, the First Deputy Di-
rector shall serve as Acting Director under 
clause (i) followed by such other Deputy 
Directors under any order of succession 
the Director may establish.
135
‘‘(iii) AUTHORITY OF ACTING DIREC-
TOR.—Any Deputy Director, while serving 
as Acting Director under this subpara-
graph, shall be vested with all authority, 
duties, and privileges of the Director under 
this Act and any other provision of Federal 
law.’’. 
SEC. 623. LIMITATION ON SCOPE OF NEW AGENCY GUIDE-
LINES. 
(a) IN GENERAL.—The provisions of the multi-agen-
cy guidance Numbered 2003–1 issued by the Comptroller 
of the Currency, the Board of Governors of the Federal 
Reserve System, the Federal Deposit Insurance Corpora-
tion, and the Director of the Office of Thrift Supervision 
that relate to minimum credit card payments and negative 
amortization—
(1) shall only apply to new credit card accounts 
established by a creditor for a consumer after the 
date of the enactment of this Act under an open end 
consumer credit plan; and 
(2) shall not apply to any outstanding balance 
on any credit card account under an open end con-
sumer credit plan as of such date of enactment. 
(b) DEFINITIONS.—For purposes of this section, the 
terms ‘‘credit’’, ‘‘credit card’’, ‘‘creditor’’, ‘‘consumer’’ and
136
‘‘open end credit plan’’ have the same meanings as in sec-
tion 103 of the Truth in Lending Act. 
(c) SUNSET PROVISION.—This section shall not apply 
after the end of the 3-year period beginning on the date 
of the enactment of this Act . 
TITLE VII—‘‘BSA’’ COMPLIANCE 
BURDEN REDUCTION 
SEC. 701. 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, 
certain such reports as currently filed do not appear 
to be relevant to the detection, deterrence, or inves-
tigation of financial crimes, including money laun-
dering and the financing 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 inves-
tigative data, which provides invaluable and indis-
137
pensable information supporting efforts to combat 
money laundering and other financial crimes. 
(4) An exemption from the reporting require-
ments for certain currency transactions that are of 
little or no value to ongoing efforts of law enforce-
ment agencies, financial regulatory agencies, and the 
financial services industry to investigate, detect, or 
deter financial crimes would serve to balance the 
burden placed on members of the financial services 
industry with the compelling need to produce and 
provide meaningful information to policy-makers, fi-
nancial regulators, law enforcement, and intelligence 
agencies. 
(5) The Secretary of the Treasury has by regu-
lation, 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 appro-
priate circumstances; however, the existing exemp-
tion process has not adequately balanced the burden 
on the financial industry with the Government’s 
need for data to support its efforts in combating fi-
nancial crime. 
(6) The act of providing notice to the Secretary 
of the Treasury of designations of exemption pro-
138
vides meaningful information to law enforcement of-
ficials on exempt customers and enables law enforce-
ment to obtain account information through appro-
priate legal process; the act of providing notice of 
designations of exemption complements other sec-
tions of title 31, United States Code, whereby law 
enforcement can locate financial institutions with 
relevant records relating to a person of investigative 
interest, 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 as set 
forth in subchapter II of chapter 53 of title 31, 
United States Code, including the requirement to 
apply the customer identification program pursuant 
to Section 5326 of subchapter II of chapter 53 of 
title 31, United States Code, and the requirement to 
identify, monitor, and, if appropriate, report sus-
picious activity in accordance with section 5318(g) 
of title 31, United States Code. 
(8) The Federal banking agencies and the Fi-
nancial Crimes Enforcement Network have recently 
provided guidance through the Federal Financial In-
139
stitutions Examination Council Bank Secrecy Act/
Anti-Money Laundering Examination Manual on ap-
plying appropriate levels of due diligence and identi-
fying suspicious activity by the types of cash-inten-
sive businesses that generally will be subject to ex-
emption. 
(b) SEASONED CUSTOMER EXEMPTION.—
(1) IN GENERAL.—Section 5313(e) of title 31, 
United States Code, is amended to read as follows: 
‘‘(e) QUALIFIED CUSTOMER EXEMPTION.—
‘‘(1) IN
GENERAL.—The Secretary of the 
Treasury shall prescribe regulations within 270 days 
of the enactment of the Financial Services Regu-
latory Relief Act of 2005 that exempt any depository 
institution from filing a report pursuant to this sec-
tion 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 deposi-
tory institution. 
‘‘(2) QUALIFIED
CUSTOMER
DEFINED.—For 
purposes of this section, the term ‘qualified cus-
tomer’, with respect to a depository institution, has 
such meaning as the Secretary of the Treasury shall 
prescribe, which shall include any person that—
140
‘‘(A) is incorporated or organized under 
the laws of the United States or any State, in-
cluding a sole proprietorship, or is registered as 
and eligible to do business 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 
prescribe the form, manner, content, and timing 
of the qualified customer exemption notice; such 
notice shall include information sufficient to 
identify the qualified customer and its accounts. 
‘‘(C) AUTHORITY OF SECRETARY.—
141
‘‘(i) IN
GENERAL.—The Secretary 
may suspend, reject or revoke any qualified 
customer exemption notice, in accordance 
with criteria prescribed by the Secretary by 
regulation. 
‘‘(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 in-
sured depository institution will continue 
to be treated as designated exempt quali-
fied customers of the surviving or acquir-
ing institution.’’. 
(c) 3-YEAR REVIEW AND REPORT.—Before the end 
of the 3-year period beginning on the date of the enact-
ment of this Act, the Secretary of the Treasury, in con-
sultation with the Attorney General, the Secretary of the 
Department of Homeland Security, the Federal banking 
agencies, the banking industry, and such other persons as 
the Secretary deems appropriate, shall evaluate the oper-
ations and effect of this provision and make recommenda-
tions to Congress as to any legislative action with respect
142
to this provision as the Secretary may determine to be ap-
propriate. 
SEC. 702. REDUCTION IN INCONSISTENCIES IN MONETARY 
TRANSACTION 
RECORDKEEPING 
AND 
RE-
PORTING ENFORCEMENT AND EXAMINATION 
REQUIREMENTS. 
(a) SENSE OF THE CONGRESS.—It is the sense of the 
Congress that inconsistencies and redundancies among 
regulations implementing monetary transaction record-
keeping and reporting enforcement programs under sec-
tion 8 of the Federal Deposit Insurance Act, section 
206(q) of the Federal Credit Union Act, and chapter II 
of chapter 53 of title 31, United States Code by the Sec-
retary of the Treasury and the Federal banking agen-
cies—
(1) increase the difficulty depository institutions 
have in complying with congressional intent in cre-
ating such enforcement programs, 
(2) reduce the transparency and clarity of the 
regulatory regime; 
(3) increase the potential for conflict among the 
various regulations in the future; and 
(4) contribute to the perception that various 
agencies involved in the enforcement of the monetary