II 113th CONGRESS 1st Session S. 1534 IN THE SENATE OF THE UNITED STATES September 19, 2013 Mr. Harkin introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide a framework establishing the rights, liabilities, and responsibilities of participants in closing procedures for certain types of consumer deposit accounts, to protect individual consumer rights, and for other purposes.

1. Short title This Act may be cited as the Freedom and Mobility in Consumer Banking Act . 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: 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: 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 required (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 subparagraph (A) 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 Congress and the Bureau on the study required under subparagraph (A), including any findings and determinations made by the Comptroller General in carrying out the 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. .