US Codex
Bill
Notes

H.R. 766 — what changed

Financial Institution Customer Protection Act of 2016

From Reported in House to Engrossed in House. 2 sections amended between Reported in House and Engrossed in House.

Section 1 Short title

changed This Act may be cited as the “Financial Institution Customer Protection Act of 2015”.2016”.

Sec. 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)
changed 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 is, or group of customers is involved in terrorist financing, such belief shall satisfy the materiality requirement under paragraph (1)(A).acting as a conduit for, an entity which—
(A)
added poses a threat to national security;
(B)
added is involved in terrorist financing;
(C)
added 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)
added is located in, or is subject to the jurisdiction of, any country specified in subparagraph (C); or
(E)
added 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),
(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)
changed Notice not required— Nothing in this section shall be construed Except as requiring a depository institution or provided under paragraph (2), if an appropriate Federal banking agency orders a depository institution to inform 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)
changed 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.