Freedom and Mobility in Consumer Banking Act

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Freedom and Mobility in Consumer 
Banking Act''.

SEC. 2. CONSUMER RIGHTS WITH RESPECT TO CLOSED ACCOUNTS.

    The Truth in Savings Act (12 U.S.C. 4301 et seq.) is amended--
            (1) by striking section 262 and inserting the following:

``SEC. 262. FINDINGS AND PURPOSES.

    ``(a) Findings.--Congress finds that--
            ``(1) economic stability would be enhanced, competition 
        between depository institutions would be improved, and the 
        ability of the consumer to make informed decisions regarding 
        deposit accounts, and to verify accounts, would be strengthened 
        if there were uniformity in the disclosure of terms and 
        conditions on which interest is paid and fees are assessed in 
        connection with such accounts; and
            ``(2) consumers lack meaningful choices for managing 
        household funds because--
                    ``(A) despite dissatisfaction with rising account 
                fees at some depository institutions, consumers often 
                find it too difficult to move their funds to new 
                deposit accounts;
                    ``(B) the process of moving funds to new deposit 
                accounts often involves several steps and substantial 
                time to complete, and it is not always clear what the 
                proper procedures are for closing an account at a given 
                depository institution;
                    ``(C) depository institutions have no obligation 
                and may lack the technical capabilities to help 
                consumers transfer automated deposits or debits from 
                old accounts to new accounts, causing delays and 
                confusion;
                    ``(D) depository institutions may charge fees to 
                close an account and withdraw available funds, which 
                can impede banking mobility for low-income consumers; 
                and
                    ``(E) some depository institutions have engaged in 
                the practice of reopening closed accounts without the 
                consent of the consumer.
    ``(b) Purposes.--The purposes of this Act are--
            ``(1) to allow consumers to make a meaningful comparison 
        between competing claims of depository institutions with regard 
        to deposit accounts by requiring the clear and uniform 
        disclosure of--
                    ``(A) the rates of interest that are payable on 
                deposit accounts by depository institutions; and
                    ``(B) the fees that are assessable against deposit 
                accounts; and
            ``(2) to protect rights of consumers by providing a 
        framework establishing the rights, liabilities, and 
        responsibilities of depository institutions and consumers in 
        closing procedures for certain types of consumer deposit 
        accounts.'';
            (2) by inserting after section 268 the following:

``SEC. 268A. CLOSURE OF COVERED ACCOUNTS.

    ``(a) In General.--A depository institution may not--
            ``(1) prohibit a consumer from closing a covered account at 
        the depository institution, regardless of whether the balance 
        in the covered account is positive, zero, or negative;
            ``(2) charge any fee to close a covered account; or
            ``(3) reopen a covered account that a consumer has 
        requested to be closed in accordance with this section to apply 
        subsequent debits, whether preauthorized or otherwise, or for 
        any other reason, unless the consumer expressly requests that 
        the covered account be reopened.
    ``(b) Disclosures Required.--A depository institution shall provide 
to any consumer that opens a covered account at the depository 
institution a description of the policies and procedures that the 
depository institution has in place to close a covered account--
            ``(1) at the time the consumer opens the covered account;
            ``(2) at any time, upon request of a consumer; and
            ``(3) on the website of the depository institution.
    ``(c) Regulations Relating to Closure of Covered Accounts.--
            ``(1) In general.--Not later than 1 year after the date of 
        enactment of this section, the Bureau, after consultation with 
        each agency referred to in section 270(a), and public notice 
        and opportunity for comment, shall prescribe final regulations 
        to carry out this section.
            ``(2) Content.--The regulations required by this subsection 
        shall--
                    ``(A) require that a depository institution close a 
                covered account not later than 5 business days after 
                the date on which a consumer makes a request to close 
                the covered account, except that the closure of the 
                covered account may be delayed--
                            ``(i) if a Federal or State law enforcement 
                        agency notifies the depository institution that 
                        the closure will interfere with a criminal 
                        investigation; or
                            ``(ii) pursuant to any other exception that 
                        the Bureau determines is appropriate;
                    ``(B) prescribe the methods by which a consumer may 
                make a request to a depository institution to close a 
                covered account, which, except as provided in 
                subparagraph (C), shall include requests made in 
                person, over the phone, or by other electronic or 
                remote means;
                    ``(C) allow a depository institution to require 
                that a request by a consumer to close a covered account 
                shall be made in person if the covered account contains 
                an amount on deposit exceeding a certain monetary 
                threshold, as determined and established by the Bureau;
                    ``(D) establish procedures that require a 
                depository institution to positively verify the 
                identity of a consumer requesting to close a covered 
                account before the depository institution closes the 
                covered account, including procedures for a depository 
                institution to follow if the depository institution is 
                unable to verify the identity of the consumer;
                    ``(E) establish procedures for a depository 
                institution to provide a consumer with the funds 
                contained in a covered account that the consumer has 
                requested to close, which shall include procedures--
                            ``(i) that ensure that the consumer whose 
                        identity has been positively verified by the 
                        depository institution has access to any funds 
                        available for withdrawal at the time the 
                        consumer makes a request to the depository 
                        institution to close the covered account;
                            ``(ii) that establish a reasonable amount 
                        of time for the depository institution to remit 
                        to the consumer the remainder of any funds in 
                        the closed covered account, including funds 
                        that are subject to a dispute between the 
                        depository institution and the consumer; and
                            ``(iii) that allow a consumer whose 
                        identity has been positively verified by the 
                        depository institution to receive available 
                        funds from a covered account that the consumer 
                        has requested to close in the form of--
                                    ``(I) a cashier's check provided to 
                                the consumer;
                                    ``(II) an electronic funds transfer 
                                to an account designated by the 
                                consumer;
                                    ``(III) any means offered by the 
                                depository institution that the 
                                consumer has requested; or
                                    ``(IV) any means that the Bureau 
                                determines appropriate;
                    ``(F) except as provided under subparagraph (G), 
                prohibit a depository institution from imposing any fee 
                or charge on a covered account at the depository 
                institution after the consumer has requested to close 
                the covered account;
                    ``(G) allow a depository institution to assess an 
                overdraft fee after a consumer has requested to close a 
                covered account, if such overdraft fee is associated 
                with a transaction that was initiated by the consumer 
                before the date on which the consumer made a request to 
                the depository institution to close the covered 
                account;
                    ``(H) not limit the ability of a consumer to earn 
                interest that a covered account had accrued before the 
                date on which the consumer made a request to the 
                depository institution to close the covered account;
                    ``(I) establish procedures for a depository 
                institution and a consumer to follow if a personal 
                check written by the consumer is deposited by a person 
                other than the consumer after the date on which the 
                consumer has closed a covered account;
                    ``(J) require the depository institution to provide 
                the consumer with certain information before the 
                depository institution closes a covered account of the 
                consumer, including--
                            ``(i) a list of any preauthorized 
                        transactions relating to the covered account 
                        that occurred within the 60 days preceding the 
                        date on which the consumer made a request to 
                        the depository institution to close the covered 
                        account;
                            ``(ii) a list of any preauthorized 
                        transactions scheduled to occur in the 60 days 
                        after the date on which the consumer made a 
                        request to the depository institution to close 
                        the covered account;
                            ``(iii) a list of any direct deposits into 
                        the covered account in the 60 days preceding 
                        the date on which the consumer made a request 
                        to the depository institution to close the 
                        covered account; and
                            ``(iv) any other information that the 
                        Bureau determines is necessary to provide 
                        consumers with adequate information about 
                        potential preauthorized activity relating to 
                        the covered account;
                    ``(K) prohibit a depository institution from 
                reporting an outstanding balance or any other adverse 
                information with respect to a covered account at the 
                depository institution to any consumer reporting 
                agency, as defined in section 603(f) of the Fair Credit 
                Reporting Act (15 U.S.C. 1681a), if--
                            ``(i) at the time the covered account is 
                        closed, the covered account has a negative 
                        balance resulting solely from any fee assessed 
                        by the depository institution; and
                            ``(ii) that information could be used to 
                        adversely affect the ability of the consumer to 
                        open an account at another depository 
                        institution;
                    ``(L) establish the terms under which a depository 
                institution may report that a covered account had a 
                negative balance at the time of the closure of the 
                covered account to a consumer reporting agency, as 
                defined in section 603(f) of the Fair Credit Reporting 
                Act (15 U.S.C. 1681a), if the depository institution--
                            ``(i) notifies the consumer of the negative 
                        balance; and
                            ``(ii) provides the consumer with a 
                        reasonable period of time, as determined and 
                        established by the Bureau, to repay the 
                        negative balance; and
                    ``(M) include any other provisions, guidance, or 
                exceptions that the Bureau determines are appropriate 
                in order to facilitate the purposes of this section.
    ``(d) Study; Rulemaking.--
            ``(1) Study.--
                    ``(A) In general.--The Comptroller General of the 
                United States shall conduct a study to determine 
                additional barriers that could limit the ability of a 
                consumer to close a covered account.
                    ``(B) Contents of study.--The study required under 
                paragraph (1) shall include, at a minimum, analysis 
                of--
                            ``(i) potential reforms to payment clearing 
                        and settlement systems that would enable 
                        depository institutions to notify consumers if 
                        a preauthorized recurring debit is directed to 
                        a covered account after the covered account has 
                        been closed;
                            ``(ii) potential reforms to payment 
                        clearing and settlement systems that would 
                        automatically transfer any direct deposit, 
                        preauthorized transaction, or other similar 
                        scheduled activity relating to a closed covered 
                        account to another account designated by the 
                        consumer;
                            ``(iii) other factors, including 
                        technological barriers, in payment clearing and 
                        scheduling systems that limit the ability of 
                        consumers to efficiently close a covered 
                        account and transfer funds to another account; 
                        and
                            ``(iv) recommendations to Congress and the 
                        appropriate Federal banking agencies, including 
                        steps that the appropriate Federal banking 
                        agencies could take through rulemaking to 
                        facilitate the automatic transfer of funds from 
                        a closed covered account to another account 
                        designated by the consumer.
                    ``(C) Report.--Not later than 1 year after the date 
                of enactment of this subsection, the Comptroller 
                General shall issue a report to the Congress and the 
                Bureau of Consumer Financial Protection on the study 
                required under subparagraph (A), including any findings 
                and determinations made by the Comptroller General in 
                carrying out such study.
            ``(2) Rulemaking.--Not later than 1 year after the Bureau 
        receives the report issued under paragraph (1)(C) the Bureau 
        shall--
                    ``(A) determine whether regulations should be 
                issued to remove barriers that limit the ability of a 
                consumer to close a covered account; and
                    ``(B) if the Bureau determines that such 
                regulations should be issued, the Bureau shall, in 
                consultation with each agency referred to in section 
                270(a), and after public notice and opportunity for 
                comment, issue such regulations.''; and
            (3) in section 274, by adding at the end the following:
            ``(9) Available for withdrawal.--The term `available for 
        withdrawal', with respect to funds deposited, means available 
        for all uses generally permitted to the customer for actually 
        and finally collected funds under the account agreement with 
        the depository institution or policies of the depository 
        institution, such as for payment of checks drawn on the 
        account, certification of checks drawn on the account, 
        electronic payments, withdrawals by cash, and transfers between 
        accounts.
            ``(10) Covered account.--The term `covered account' means 
        any checking, savings, or any other account that the Bureau may 
        include, by regulation.''.

Summary: Freedom and Mobility in Consumer Banking Act - Amends the Truth in Savings Act to prohibit depository institutions from: (1) prohibiting a consumer from closing a covered account (a checking, savings, or any other account that the Bureau of Consumer Financial Protection [CFPB] may include), regardless of whether the balance is positive, zero, or negative; (2) charging any fee to close such account; or (3) reopening such an account to apply subsequent debits after a consumer has requested the account to be closed, unless the consumer requests that the account be reopened. Requires depository institutions to provide consumers with a description of the policies and procedures in place to close such accounts at the time the account is opened, upon request, and on the websites of such institutions. Directs the CFPB to prescribe regulations relating to the closure of such accounts, including: (1) allowing consumers to receive available funds from a closed account in the form of a cashier's check, electronic funds transfer, or any other means offered by the institution or determined appropriate by the CFPB; (2) requiring depository institutions to provide consumers with certain information regarding any preauthorized transactions or direct deposits associated with an account before it is closed; (3) prohibiting a depository institution from reporting adverse information regarding such account to any consumer reporting agency if, at the time the account is closed, the account has a negative balance resulting solely from any fee assessed by the depository institution; and (4) establishing the terms under which a depository institution may report to a consumer reporting agency that an account had a negative closing balance, provided that the institution notifies the consumer and provides a reasonable period for repayment of the balance.  Directs the Comptroller General (GAO) to report to Congress and the CFPB regarding additional barriers that could limit the ability of a consumer to close a covered account. Requires the CFPB, after receiving such report, to determine whether regulations should be issued to remove such barriers.