Title: Financial Institution Customer Protection Act of 2019
Policy area: Finance and Financial Sector

Summary:
Financial Institution Customer Protection Act of 2019
This bill specifies that a federal banking agency may not request or order a depository institution to terminate a customer account unless (1) the agency has a valid reason for doing so, and (2) that reason is not based solely on reputation risk.
Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.
A federal banking agency requesting a termination must provide the depository institution with notification and justification.
The bill also sets forth additional requirements for the Department of Justice when seeking subpoenas, summoning witnesses, or compelling document production in the course of conducting a civil investigation in contemplation of a civil proceeding involving certain banking laws.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 3003 Introduced in Senate (IS)]

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116th CONGRESS
  1st Session
                                S. 3003

 To provide requirements for the appropriate Federal banking agencies 
  when requesting or ordering a depository institution to terminate a 
   specific customer account, to provide for additional requirements 
 related to subpoenas issued under the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 10, 2019

Mr. Cruz (for himself, Mr. Crapo, Mr. Kennedy, Mr. Tillis, Mr. Inhofe, 
    Mr. Lee, Mrs. Hyde-Smith, Mr. Cornyn, Mr. Sasse, and Mr. Braun) 
introduced the following bill; which was read twice and referred to the 
            Committee on Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
 To provide requirements for the appropriate Federal banking agencies 
  when requesting or ordering a depository institution to terminate a 
   specific customer account, to provide for additional requirements 
 related to subpoenas issued under the Financial Institutions Reform, 
     Recovery, and Enforcement Act of 1989, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Financial Institution Customer 
Protection Act of 2019''.

SEC. 2. REQUIREMENTS FOR DEPOSIT ACCOUNT TERMINATION REQUESTS AND 
              ORDERS.

    (a) Definitions.--In this section--
            (1) the term ``appropriate Federal banking agency''--
                    (A) has the meaning given the term in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813); and
                    (B) in the case of an insured credit union, means 
                the National Credit Union Administration Board;
            (2) the term ``depository institution''--
                    (A) has the meaning given the term in section 3 of 
                the Federal Deposit Insurance Act (12 U.S.C. 1813); and
                    (B) includes an insured credit union; and
            (3) the term ``insured credit union'' has the meaning given 
        the term in section 101 of the Federal Credit Union Act (12 
        U.S.C. 1752).
    (b) Termination Requests or Orders Must Be Material.--
            (1) In general.--The appropriate Federal banking agency may 
        not formally or informally request or order a depository 
        institution to terminate a specific customer account or group 
        of customer accounts or to otherwise restrict or discourage a 
        depository institution from entering into or maintaining a 
        banking relationship with a specific customer or group of 
        customers unless--
                    (A) the agency has a material reason for the 
                request or order; and
                    (B) that reason is not based solely on reputation 
                risk to the depository institution.
            (2) Treatment of national security threats.--The 
        appropriate Federal banking agency shall satisfy the 
        requirement under paragraph (1) if the agency believes a 
        specific customer or group of customers is, or is acting as a 
        conduit for, an entity that--
                    (A) poses a threat to national security;
                    (B) is involved in terrorist financing;
                    (C) is an agency of the Government of Iran, North 
                Korea, Syria, or any country listed from time to time 
                on the state sponsor of terrorism list;
                    (D) is located in, or is subject to the 
                jurisdiction of, any country described in subparagraph 
                (C); or
                    (E) does business with any entity described in 
                subparagraph (C) or (D), unless the appropriate Federal 
                banking agency determines that the customer or group of 
                customers has used due diligence to avoid doing 
                business with any entity described in subparagraph (C) 
                or (D).
    (c) Notice Requirement.--
            (1) In general.--If the appropriate Federal banking agency 
        formally or informally requests or orders a depository 
        institution to terminate a specific customer account or a group 
        of customer accounts, the agency shall--
                    (A) provide the request or order to the institution 
                in writing; and
                    (B) include with the request or order a written 
                justification for why the termination is necessary, 
                including any specific law (including regulations), the 
                agency believes that the customer or group of customers 
                are violating.
            (2) Justification requirement.--A written justification 
        under paragraph (1)(B) may not be based solely on the 
        reputation risk to the depository institution.
    (d) Customer Notice.--
            (1) Notice required.--Except as provided in paragraph (2), 
        if the appropriate Federal banking agency orders a depository 
        institution to terminate a specific customer account or a group 
        of customer accounts, the depository institution shall inform 
        the customer or customers of the justification for the 
        termination of the account or accounts under subsection 
        (c)(1)(B).
            (2) Notice prohibited in cases of national security.--If 
        the appropriate Federal banking agency requests or orders a 
        depository institution to terminate a specific customer account 
        or a group of customer accounts based on a belief that the 
        customer or customers pose a threat to national security, or 
        are otherwise described in subsection (b)(2), neither the 
        depository institution nor the appropriate Federal banking 
        agency may inform the customer or customers of the 
        justification for the termination of the account or accounts.
    (e) Reporting Requirement.--Each appropriate Federal banking agency 
shall issue an annual report to Congress stating--
            (1) the aggregate number of specific customer accounts that 
        the agency requested or ordered a depository institution to 
        terminate during the 1-year period preceding the issuance of 
        the report;
            (2) the legal authority on which the agency relied in 
        making the requests and orders described in paragraph (1); and
            (3) the frequency with which the agency relied on each 
        authority described in paragraph (2).

SEC. 3. AMENDMENTS TO THE FINANCIAL INSTITUTIONS REFORM, RECOVERY, AND 
              ENFORCEMENT ACT OF 1989.

    Section 951 of the Financial Institutions Reform, Recovery, and 
Enforcement Act of 1989 (12 U.S.C. 1833a) is amended--
            (1) in subsection (c)(2)--
                    (A) by inserting a comma after ``1341''; and
                    (B) by striking ``affecting a federally insured 
                financial institution'' and inserting ``against a 
                federally insured financial institution or by a 
                federally insured financial institution against an 
                unaffiliated third person''; and
            (2) in subsection (g)--
                    (A) in the subsection heading, by striking 
                ``Subpoenas'' and inserting ``Investigations''; and
                    (B) by striking paragraph (1)(C) and inserting the 
                following:
                    ``(C) summon witnesses and require the production 
                of any books, papers, correspondence, memoranda, or 
                other records which the Attorney General deems relevant 
                or material to the inquiry, if the Attorney General--
                            ``(i) requests a court order from a court 
                        of competent jurisdiction for such actions and 
                        offers specific and articulable facts showing 
                        that there are reasonable grounds to believe 
                        that the information or testimony sought is 
                        relevant and material for conducting an 
                        investigation under this section; or
                            ``(ii) either personally or through 
                        delegation no lower than the Deputy Attorney 
                        General, issues and signs a subpoena for such 
                        actions and such subpoena is supported by 
                        specific and articulable facts showing that 
                        there are reasonable grounds to believe that 
                        the information or testimony sought is relevant 
                        for conducting an investigation under this 
                        section.''.
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