Financial Institution Customer Protection Act of 2017

Bill: 115-hr-2706
Sponsor: full_name: Rep. Luetkemeyer, Blaine [R-MO-3]
Introduced: 2017-05-25
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: 2017-12-12
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2017-05-25
action_desc: Introduced in House
text: <p><strong>Financial Institution Customer Protection Act of 2017</strong></p> <p>This bill specifies that a&nbsp;federal banking agency may not request or order a depository institution to terminate a customer account unless: (1) the agency has a material reason for doing so, and (2) that reason is not based solely on reputation risk.</p> <p>In addition, the bill amends&nbsp;the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 to: (1) apply civil penalties to specified&nbsp;violations by a financial institution against an unaffiliated third person, and (2) modify provisions related to administrative subpoenas.</p>

action_date: 2017-11-16
action_desc: Reported to House with amendment(s)
text: <p><strong>Financial Institution Customer Protection Act of 2017</strong></p> <p>(Sec. 2) This bill specifies that a&nbsp;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.</p> <p>Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.</p> <p>A federal banking agency requesting a termination must provide the depository institution with notification and justification. </p>

action_date: 2017-12-11
action_desc: Passed House amended
text: <p><strong>Financial Institution Customer Protection Act of 2017</strong></p> <p>(Sec. 2) This bill specifies that a&nbsp;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.</p> <p>Valid reasons for terminating an account include threats to national security and involvement in terrorist financing, including state sponsorship of terrorism.</p> <p>A federal banking agency requesting a termination must provide the depository institution with notification and justification. </p>

tv_txt: I 115th CONGRESS 1st Session H. R. 2706 IN THE HOUSE OF REPRESENTATIVES May 25, 2017 Mr. Luetkemeyer (for himself, Mr. Rothfus , Mr. Sessions , Mr. Budd , Mr. Stivers , Mr. Pittenger , Mr. Tipton , Mr. Williams , Mr. Lucas , Mr. Hollingsworth , Mr. Hultgren , Mr. MacArthur , and Ms. Tenney ) 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 2017 . 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. .

tv_txt: IB Union Calendar No. 306 115th CONGRESS 1st Session H. R. 2706 [Report No. 115–414] IN THE HOUSE OF REPRESENTATIVES May 25, 2017 Mr. Luetkemeyer (for himself, Mr. Rothfus , Mr. Sessions , Mr. Budd , Mr. Stivers , Mr. Pittenger , Mr. Tipton , Mr. Williams , Mr. Lucas , Mr. Hollingsworth , Mr. Hultgren , Mr. MacArthur , and Ms. Tenney ) introduced the following bill; which was referred to the Committee on Financial Services November 16, 2017 Additional sponsors: Mr. Rodney Davis of Illinois , Mr. Ross , Mr. Loudermilk , Mr. Emmer , Mr. Graves of Missouri , Mr. Latta , and Mr. Faso November 16, 2017 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed Strike out all after the enacting clause and insert the part printed in italic For text of introduced bill, see copy of bill as introduced on May 25, 2017 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 2017 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be valid (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 valid 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.

November 16, 2017 Reported with an amendment, committed to the Committee of the Whole House on the State of the Union, and ordered to be printed

tv_txt: I 115th CONGRESS 1st Session H. R. 2706 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 2017 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be valid (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 valid 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) or as otherwise prohibited from being disclosed by law, 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 specific customer or group of customers of the justification for the customer’s account termination described under subsection (b). (2) Notice prohibited (A) 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. (B) Notice prohibited in other cases If an appropriate Federal banking agency determines that the notice required under paragraph (1) may interfere with an authorized criminal investigation, neither the depository institution nor the appropriate Federal banking agency may inform the specific customer or group of 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.

Passed the House of Representatives December 11, 2017. Karen L. Haas, Clerk.

tv_txt: IIB 115th CONGRESS 1st Session H. R. 2706 IN THE SENATE OF THE UNITED STATES December 12, 2017 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 2017 . 2. Requirements for deposit account termination requests and orders (a) Termination requests or orders must be valid (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 valid 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) or as otherwise prohibited from being disclosed by law, 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 specific customer or group of customers of the justification for the customer’s account termination described under subsection (b). (2) Notice prohibited (A) 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. (B) Notice prohibited in other cases If an appropriate Federal banking agency determines that the notice required under paragraph (1) may interfere with an authorized criminal investigation, neither the depository institution nor the appropriate Federal banking agency may inform the specific customer or group of 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.

Passed the House of Representatives December 11, 2017. Karen L. Haas, Clerk