Financial Institution Customer Protection Act of 2016

Bill: 114-hr-766
Sponsor: full_name: Rep. Luetkemeyer, Blaine [R-MO-3]
Introduced: 2015-02-05
Policy area: Finance and Financial Sector
Subjects: Administrative law and regulatory procedures

Asia

Bank accounts, deposits, capital

Banking and financial institutions regulation

Business records

Congressional oversight

Consumer affairs

Department of the Treasury

Evidence and witnesses

Federal Deposit Insurance Corporation (FDIC)

Federal Reserve System

Government information and archives

Iran

Judicial procedure and administration

Middle East

National Credit Union Administration

North Korea

Syria

Terrorism
Latest action: action_date: 2016-02-08
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2015-02-05
action_desc: Introduced in House
text: <p><b>Financial Institution Customer Protection Act of 2015</b></p> <p> Prohibits a federal banking agency from formally or informally suggesting, requesting, or ordering a depository institution to terminate either a specific customer account, or group of customer accounts, or otherwise restrict or discourage it from entering into or maintaining a banking relationship with a specific customer or group of customers, unless: (1) the agency has a material reason to do so, and (2) the reason is not based solely on reputation risk.</p> <p>Deems the &quot;material reason&quot; criterion satisfied if a federal banking agency believes that a specific customer or group of customers poses a threat to national security, including any belief that they are involved in terrorist financing. </p> <p>Prescribes notice requirements incumbent upon the federal banking agency to the depository institution regarding customer account restriction or termination, but states that the agency's notice to the customer is not required. </p> <p>Prohibits any notice to the customer if the federal banking agency requests or orders a depository institution to terminate a customer account (or a group of customer accounts) based upon a belief that customer or those customers pose a threat to national security.</p> <p>Amends the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to revise requirements for summoning witnesses and requiring production of books or other records the Attorney General deems relevant or material to a civil investigation in contemplation of a civil proceeding which may result in civil penalties for specified violations.</p>

action_date: 2016-01-28
action_desc: Reported to House without amendment
text: <p>(This measure has not been amended since it was introduced. The summary has been expanded because action occurred on the measure.)</p> <p><b>Financial Institution Customer Protection Act of 2015</b></p> <p> (Sec. 2) This bill prohibits a federal banking agency from formally or informally suggesting, requesting, or ordering a depository institution to terminate either a specific customer account, or group of customer accounts, or otherwise restrict or discourage it from entering into or maintaining a banking relationship with a specific customer or group of customers, unless: (1) the agency has a material reason to do so, and (2) the reason is not based solely on reputation risk.</p> <p>The &quot;material reason&quot; criterion shall be satisfied if a federal banking agency believes that a specific customer or group of customers poses a threat to national security, including any belief that they are involved in terrorist financing. </p>  <p>Nothing shall be construed as requiring a depository institution or an appropriate federal banking agency to inform a customer or customers of the justification for the customer's account termination.</p> <p>No notice may be given to the customer, furthermore, if the federal banking agency requests or orders a depository institution to terminate a customer account (or a group of customer accounts) based upon a belief that customer or those customers pose a threat to national security.</p> <p>(Sec. 3) The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended to revise requirements for summoning witnesses and requiring production of books or other records the Attorney General deems relevant or material to a civil investigation in contemplation of a civil proceeding which may result in civil penalties for specified violations.</p>

action_date: 2016-02-04
action_desc: Passed House amended
text: <p><b>Financial Institution Customer Protection Act of 2016</b></p> <p> (Sec. 2) This bill prohibits a federal banking agency from formally or informally suggesting, requesting, or ordering a depository institution to terminate either a specific customer account, or group of customer accounts, or otherwise restrict or discourage it from entering into or maintaining a banking relationship with a specific customer or group of customers, unless: (1) the agency has a material reason to do so, and (2) the reason is not based solely on reputation risk.</p> <p>The &quot;material reason&quot; criterion shall be satisfied if an agency believes that a specific customer or group of customers poses a threat to national security, including any belief that they are involved in terrorist financing. </p> <p>Unless the appropriate agency determines that the customer or group of customers has used due diligence to avoid doing business with any entity described below, the bill deems the criteria addressing &quot;material reason&quot; to be met if the agency believes a customer or group of customers is, or is acting as, a conduit for an entity which: </p> <ul> <li> poses a threat to national security; </li> <li> is involved in terrorist financing; </li> <li> is an agency of the government of Iran, North Korea, Syria, or any country listed from time to time on the State Sponsors of Terrorism list; </li> <li> is either located in, or subject to the jurisdiction of, any of such countries; or </li> <li> does business with any entity located in such countries.</li> </ul>  <p>If an 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.</p> <p>No notice may be given to the customer, however, if the agency requests or orders a depository institution to terminate a customer account (or a group of customer accounts) based upon a belief that customer or those customers pose a threat to national security or are otherwise described above.</p> <p>(Sec. 3) The Financial Institutions Reform, Recovery, and Enforcement Act of 1989 is amended to revise requirements for summoning witnesses and requiring production of books or other records the Attorney General deems relevant or material to a civil investigation in contemplation of a civil proceeding which may result in civil penalties for specified violations.</p>

tv_txt: I 114th CONGRESS 1st Session H. R. 766 IN THE HOUSE OF REPRESENTATIVES February 5, 2015 Mr. Luetkemeyer (for himself, Mr. Hastings , and Mr. Stivers ) introduced the following bill; which was referred to the Committee on Financial Services 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.

1. Short title This Act may be cited as the Financial Institution Customer Protection Act of 2015 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be material (1) In general An 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 such request or order; and (B) such reason is not based solely on reputation risk. (2) Treatment of national security threats If an appropriate Federal banking agency believes a specific customer or group of customers poses a threat to national security, including any belief that such customer or group of customers is involved in terrorist financing, such belief shall satisfy the materiality requirement under paragraph (1)(A). (b) Notice requirement (1) In general If an 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 such request or order to the institution in writing; and (B) accompany such request or order with a written justification for why such termination is needed, including any specific laws or regulations the agency believes are being violated by the customer or group of customers, if any. (2) Justification requirement A justification described under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution. (c) Customer notice (1) Notice not required Nothing in this section shall be construed as requiring a depository institution or an appropriate Federal banking agency to inform a customer or customers of the justification for the customer’s account termination described under subsection (b). (2) Notice prohibited in cases of national security If an 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, neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the customer’s account termination. (d) Reporting requirement Each appropriate Federal banking agency shall issue an annual report to the Congress stating— (1) the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year; and (2) the legal authority on which the agency relied in making such requests and orders and the frequency on which the agency relied on each such authority. (e) Definitions For purposes of this section: (1) Appropriate Federal banking agency The term appropriate Federal banking agency means— (A) the appropriate Federal banking agency, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) the National Credit Union Administration, in the case of an insured credit union. (2) Depository institution The term depository institution means— (A) a depository institution, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) an insured credit union. 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), 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 header, by striking subpoenas and inserting investigations ; and (B) by amending paragraph (1)(C) to read as follows: (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. .

tv_txt: IB Union Calendar No. 305 114th CONGRESS 2d Session H. R. 766 [Report No. 114–402] IN THE HOUSE OF REPRESENTATIVES February 5, 2015 Mr. Luetkemeyer (for himself, Mr. Hastings , and Mr. Stivers ) introduced the following bill; which was referred to the Committee on Financial Services January 28, 2016 Additional sponsors: Mr. Mulvaney , Mr. Cárdenas , Mr. Murphy of Florida , Mr. Gosar , Mrs. Blackburn , Mr. Latta , Mr. Ross , Mr. Stutzman , Mr. Sessions , Mr. Farenthold , Mr. Upton , Mr. Curbelo of Florida , Mr. Fincher , Mr. Neugebauer , Mr. Emmer of Minnesota , Mr. Tipton , Mr. Posey , Mr. Williams , Mr. Barr , Mr. Rothfus , Mr. Hultgren , Mr. Pearce , Ms. Jenkins of Kansas , Mr. Jolly , Mr. DesJarlais , Mr. Graves of Missouri , Mr. Rodney Davis of Illinois , and Mr. Messer January 28, 2016 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed 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.

1. Short title This Act may be cited as the Financial Institution Customer Protection Act of 2015 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be material (1) In general An 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 such request or order; and (B) such reason is not based solely on reputation risk. (2) Treatment of national security threats If an appropriate Federal banking agency believes a specific customer or group of customers poses a threat to national security, including any belief that such customer or group of customers is involved in terrorist financing, such belief shall satisfy the materiality requirement under paragraph (1)(A). (b) Notice requirement (1) In general If an 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 such request or order to the institution in writing; and (B) accompany such request or order with a written justification for why such termination is needed, including any specific laws or regulations the agency believes are being violated by the customer or group of customers, if any. (2) Justification requirement A justification described under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution. (c) Customer notice (1) Notice not required Nothing in this section shall be construed as requiring a depository institution or an appropriate Federal banking agency to inform a customer or customers of the justification for the customer’s account termination described under subsection (b). (2) Notice prohibited in cases of national security If an 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, neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the customer’s account termination. (d) Reporting requirement Each appropriate Federal banking agency shall issue an annual report to the Congress stating— (1) the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year; and (2) the legal authority on which the agency relied in making such requests and orders and the frequency on which the agency relied on each such authority. (e) Definitions For purposes of this section: (1) Appropriate Federal banking agency The term appropriate Federal banking agency means— (A) the appropriate Federal banking agency, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) the National Credit Union Administration, in the case of an insured credit union. (2) Depository institution The term depository institution means— (A) a depository institution, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) an insured credit union. 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), 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 header, by striking subpoenas and inserting investigations ; and (B) by amending paragraph (1)(C) to read as follows: (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. .

January 28, 2016 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed

tv_txt: I 114th CONGRESS 2d Session H. R. 766 IN THE HOUSE OF REPRESENTATIVES AN ACT 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.

1. Short title This Act may be cited as the Financial Institution Customer Protection Act of 2016 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be material (1) In general An 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 such request or order; and (B) such reason is not based solely on reputation risk. (2) Treatment of national security threats If an appropriate Federal banking agency believes a specific customer or group of customers is, or is acting as a conduit for, an entity which— (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 Sponsors of Terrorism list; (D) is located in, or is subject to the jurisdiction of, any country specified 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), such belief shall satisfy the requirement under paragraph (1). (b) Notice requirement (1) In general If an 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 such request or order to the institution in writing; and (B) accompany such request or order with a written justification for why such termination is needed, including any specific laws or regulations the agency believes are being violated by the customer or group of customers, if any. (2) Justification requirement A justification described under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution. (c) Customer notice (1) Notice required Except as provided under paragraph (2), if an 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 customer’s account termination described under subsection (b). (2) Notice prohibited in cases of national security If an 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 under subsection (a)(2), neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the customer’s account termination. (d) Reporting requirement Each appropriate Federal banking agency shall issue an annual report to the Congress stating— (1) the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year; and (2) the legal authority on which the agency relied in making such requests and orders and the frequency on which the agency relied on each such authority. (e) Definitions For purposes of this section: (1) Appropriate Federal banking agency The term appropriate Federal banking agency means— (A) the appropriate Federal banking agency, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) the National Credit Union Administration, in the case of an insured credit union. (2) Depository institution The term depository institution means— (A) a depository institution, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) an insured credit union. 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), 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 header, by striking subpoenas and inserting investigations ; and (B) by amending paragraph (1)(C) to read as follows: (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. .

Passed the House of Representatives February 4, 2016. Karen L. Haas, Clerk.

tv_txt: IIB 114th CONGRESS 2d Session H. R. 766 IN THE SENATE OF THE UNITED STATES February 8, 2016 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT 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.

1. Short title This Act may be cited as the Financial Institution Customer Protection Act of 2016 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be material (1) In general An 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 such request or order; and (B) such reason is not based solely on reputation risk. (2) Treatment of national security threats If an appropriate Federal banking agency believes a specific customer or group of customers is, or is acting as a conduit for, an entity which— (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 Sponsors of Terrorism list; (D) is located in, or is subject to the jurisdiction of, any country specified 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), such belief shall satisfy the requirement under paragraph (1). (b) Notice requirement (1) In general If an 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 such request or order to the institution in writing; and (B) accompany such request or order with a written justification for why such termination is needed, including any specific laws or regulations the agency believes are being violated by the customer or group of customers, if any. (2) Justification requirement A justification described under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution. (c) Customer notice (1) Notice required Except as provided under paragraph (2), if an 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 customer’s account termination described under subsection (b). (2) Notice prohibited in cases of national security If an 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 under subsection (a)(2), neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the customer’s account termination. (d) Reporting requirement Each appropriate Federal banking agency shall issue an annual report to the Congress stating— (1) the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the previous year; and (2) the legal authority on which the agency relied in making such requests and orders and the frequency on which the agency relied on each such authority. (e) Definitions For purposes of this section: (1) Appropriate Federal banking agency The term appropriate Federal banking agency means— (A) the appropriate Federal banking agency, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) the National Credit Union Administration, in the case of an insured credit union. (2) Depository institution The term depository institution means— (A) a depository institution, as defined under section 3 of the Federal Deposit Insurance Act ( 12 U.S.C. 1813 ); and (B) an insured credit union. 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), 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 header, by striking subpoenas and inserting investigations ; and (B) by amending paragraph (1)(C) to read as follows: (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. .

Passed the House of Representatives February 4, 2016. Karen L. Haas, Clerk