Title II — S. 2563 (Introduced in Senate)

Sec. 201 Annual reporting requirements

(a)

Annual report— Not later than 1 year after the date of enactment of this Act, and annually thereafter, the Attorney General, in consultation with Federal law enforcement agencies and the Director of National Intelligence, shall, to the extent practicable at the discretion of the Attorney General, provide to the Secretary statistics, metrics, and other information on the use of data derived from financial institutions reporting under this title, including—

(1)

the frequency with which such data contains actionable information that leads to further law enforcement procedures, including the use of a subpoena, warrant, or other legal process, or to actions taken by intelligence, defense, or homeland security agencies;

(2)

calculations of the time between when data is reported by a financial institution and when it is used by law enforcement, intelligence, defense, or homeland security agencies, whether through the use of a subpoena, warrant or other legal process, or actions;

(3)

the value of the transactions associated with such data, including whether the suspicious accounts were held by legal entities or natural persons, and whether there are trends and patterns in cross-border transactions to certain countries;

(4)

the number of legal and natural persons identified by such data;

(5)

information on the extent to which arrests, indictments, convictions, or criminal pleas, civil enforcement or forfeiture actions, or actions by intelligence, defense, or homeland security agencies result from the use of such data; and

(6)

data on the investigations carried out by State and Federal authorities.

(b)

Quinquennial report— Every 5 years after the date of enactment of this Act, the report described in subsection (a) shall include a section describing the use of data derived from financial institution reporting under this subchapter over the previous 5 years, including describing long-term trends and providing long-term statistics, metrics, and other information.

(c)

Trends, patterns, and threats— The report described in subsection (a) and the section described in subsection (b) shall contain a description of retrospective trends and emerging patterns and threats in money laundering and terrorist financing, including national and regional trends, patterns, and threats relevant to such classes of financial institutions that the Attorney General determines appropriate.

(d)

Use of report information— The Secretary shall use the information reported under subsections (a), (b), and (c)—

(1)

to help assess the usefulness of Bank Secrecy Act reporting to criminal and civil law enforcement and to intelligence, defense, and homeland security agencies;

(2)

to enhance feedback and communications with financial institutions and other entities subject to Bank Secrecy Act requirements, including through providing more detail in the reports produced under section 314(d) of the USA PATRIOT Act (31 U.S.C. 5311 note);

(3)

to assist FinCEN in considering revisions to the reporting requirements promulgated under section 314(d) of the USA PATRIOT Act (31 U.S.C. 5311 note); and

(4)

for any other purpose the Secretary determines is appropriate.

Sec. 202 Law enforcement feedback on suspicious activity reports

(a)

Feedback— The staff of FinCEN shall, to the extent practicable, periodically solicit feedback from individuals designated under section 5318(h)(1) of title 31, United States Code, from a variety of financial institutions representing a cross-section of the reporting industry to review the suspicious activity reports filed by the financial institutions and discuss trends in suspicious activity observed by FinCEN.

(1)

Feedback required— The staff of FinCEN shall disclose to the persons designated under section 5318(h)(1) of title 31, United States Code, what actions have been taken, if any, by Federal or State criminal or civil law enforcement or by defense or homeland security agencies with respect to the suspicious activity reports filed by the financial institution during the previous period.

(2)

Exception for ongoing investigations— FinCEN shall not be required to disclose to the financial institution any information under subsection (a)(1) that could jeopardize an ongoing investigation or national security.

(3)

Maintenance of statistics— FinCEN shall keep records of all such actions taken under paragraph (1) to assist with the production of the reports described in section 201 and for other purposes.

(b)

Coordination with Federal functional regulators and State bank supervisors— Any meeting described in subsection (a) shall be conducted in the presence of the Federal functional regulators or the State bank supervisor of the financial institution and, if applicable, during the regularly scheduled examination of the financial institution by the Federal functional regulator or State bank supervisor.

(c)

Coordination with department of justice— The information disclosed by FinCEN under subsection (a) shall include information from the Department of Justice regarding its review and use of suspicious activity reports filed by the financial institutions during the previous period and any trends in suspicious activity observed by the Department of Justice, and such information shall include information specifically relevant to reports filed by such financial institution in the previous period and other information tailored to such financial institution.

Sec. 203 Streamlining requirements for currency transaction reports and suspicious activity reports

(a)

Review— The Secretary, in consultation with the Attorney General, Federal law enforcement agencies, the Director of National Intelligence, the Secretary of Defense, the Secretary of Homeland Security, the Federal functional regulators, State bank supervisors, and other relevant stakeholders, shall undertake a formal review of the current financial institution reporting requirements, including the processes used to submit reports, under the Bank Secrecy Act, regulations implementing that Act, and related guidance, and make changes to them to reduce unnecessarily burdensome regulatory requirements and ensure that the information provided is highly useful to law enforcement, intelligence, or national security matters, as set forth in section 5311 of title 31, United States Code.

(b)

Contents— The review required under subsection (a) shall include a study of—

(1)

whether the circumstances under which a financial institution determines whether to file a continuing suspicious activity report, including insider abuse, or the processes followed by a financial institution in determining whether to file a continuing suspicious activity report, or both, should be adjusted;

(2)

whether different thresholds should apply to different categories of activities;

(3)

the fields designated as critical on the suspicious activity report form and whether the number or nature of the fields should be adjusted;

(4)

the categories, types, and characteristics of suspicious activity reports and currency transaction reports that are of the greatest value to, and that best support, investigative priorities of law enforcement and national security personnel;

(5)

the increased use or expansion of exemption provisions to reduce currency transaction reports that are of little or no value to law enforcement efforts;

(6)

the most appropriate ways to promote financial inclusion and address the adverse consequences of financial institutions de-risking entire categories of high-risk relationships, including charities, embassy accounts, and money service businesses, as defined in section 1010.100(ff) of title 31, Code of Federal Regulations, and certain groups of correspondent banks;

(7)

the current financial institution reporting requirements under the Bank Secrecy Act and regulations and guidance implementing that Act;

(8)

whether the process for the electronic submission of reports could be improved for both financial institutions and law enforcement, including by allowing greater integration between financial institution systems and the electronic filing system to allow for automatic population of report fields and the automatic submission of transaction data for suspicious transactions;

(9)

the appropriate confidentiality of personal information;

(10)

how to improve the cross-referencing of individuals or entities operating at multiple financial institutions and across international borders; and

(11)

any other item the Secretary determines is appropriate.

(c)

Public comment— The Secretary shall solicit public comment as part of the review contemplated in subsection (a).

(d)

Report— Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary, in consultation with law enforcement, shall submit to Congress a report that contains all findings and determinations made in carrying out the review required under subsection (a) and propose rulemakings to implement their findings.

Sec. 204 Currency transaction report and suspicious activity report thresholds review

(a)

Review of thresholds for certain currency transaction and suspicious activity reports— The Secretary, in consultation with the Attorney General and the Director of National Intelligence, the Secretary of Defense, and the Secretary of Homeland Security, shall study and determine whether the dollar thresholds, including aggregate thresholds, contained in sections 5313, 5331, and 5318(g) of title 31, United States Code, including regulations issued thereunder, should be adjusted.

(b)

Considerations— In making the determinations described in subsection (a), the Secretary and the Attorney General shall consider—

(1)

the effects on law enforcement, intelligence, defense, and homeland security, from adjusting the thresholds;

(2)

the costs likely to be incurred or saved by financial institutions;

(3)

the conformance of the United States with international norms and standards to counter money laundering and the financing of terrorism; and

(4)

any other factor the Secretary, Director of National Intelligence, and the Attorney General considers relevant.

(c)

Public comment— The Secretary shall solicit public comment as part of the review contemplated in subsection (a).

(d)

Report and rulemakings— Not later than the end of the 1-year period beginning on the date of enactment of this Act, the Secretary, in consultation with the Attorney General, the intelligence community, the Secretary of Defense, and the Secretary of Homeland Security, shall publish a report of the findings from the review described in subsection (a) and recommend rulemakings to implement the findings.

Sec. 205 Review of regulations and guidance

(a)

In general— The Secretary and the Federal functional regulators, in consultation with Federal financial regulators, the Federal Financial Institutions Examination Council, the Attorney General, Federal law enforcement agencies, the Director of National Intelligence, the Secretary of Defense, the Secretary of Homeland Security, and the Commissioner of the Internal Revenue Service, shall each undertake a formal review of the regulations implementing the Bank Secrecy Act, and guidance related to that Act, to identify those regulations and guidance that may be outdated, redundant, unnecessarily burdensome, or otherwise do not promote a risk-based anti-money-laundering compliance and countering-the-financing-of-terrorism regime for financial institutions, or that do not conform with the commitments of the United States to meet international standards to combat money laundering, financing of terrorism, or tax evasion, and make appropriate changes to those regulations and guidance.

(b)

Public comment— The Secretary shall solicit public comment as part of the review required under subsection (a).

(c)

Report— Not later than the end of the 1-year period beginning on the date of the enactment of this Act, the Secretary, the Federal functional regulators, the Federal Financial Institutions Examination Council, and the Internal Revenue Service shall submit to Congress one or more reports that contain all findings and determinations made in carrying out the review required under subsection (a).

Sec. 206 Penalty coordination

(a)

Coordination on penalties— Prior to any Federal functional regulator, FinCEN, or the Department of Justice, including any organizational unit thereof, issuing a fine or civil money penalty, with respect to an entity to address any actual or alleged violation of any provision of the Bank Secrecy Act or section 8(s) of the Federal Deposit Insurance Act (12 U.S.C. 1818(s)) or any unsafe or unsound practice that resulted in any such actual or alleged violation, such Federal department or agency shall endeavor to coordinate its penalty with all relevant Federal departments and agencies and State law enforcement and financial regulators contemplating a penalty with respect to the same or similar conduct and attempt to develop a comprehensive or coordinated penalty or set of penalties to avoid duplicative fines, penalties, and other orders or actions.

(b)

Exception— Subsection (a) shall not apply if—

(1)

a Federal or State financial regulator determines that complying with subsection (a) is impractical for safety or soundness reasons; or

(2)

a Federal law enforcement or a national security agency determines that complying with subsection (a) is impractical for Federal law enforcement or national security reasons or for purposes related to the administration of the Bank Secrecy Act.

(c)

Rule of construction— Nothing in this section shall be construed as limiting the amount of a fine or the type of penalty that may be issued by any Federal or State entity with authority to issue a fine or penalty.

(d)

No rights— Nothing in this section provides persons with any rights or privileges, including a private right of action or an affirmative defense, and no determination or failure to make a determination by any Federal entity or officer under this section shall be reviewable by a court of law.

Sec. 207 Cooperation with law enforcement

(a)

Safe harbor with respect to keep open directives—

(1)

In general—

(A)

Amendment to title 31— Subchapter II of chapter 53 of title 31, United States Code, is amended by adding at the end the following:

“5333. Safe harbor with respect to keep open directives

“(a) In general—With respect to a customer account or customer transaction of a financial institution, if a Federal, State, Tribal, or local law enforcement agency requests, in writing, that the financial institution keep that account or transaction open—

“(1) the financial institution shall not be liable under this subchapter for maintaining that account or transaction consistent with the parameters of the request; and

“(2) no Federal or State department or agency may take any adverse supervisory action under this subchapter with respect to the financial institution for maintaining that account or transaction consistent with the parameters of the request.

“(b) Rule of construction—Nothing in this section may be construed—

“(1) to prevent a Federal or State department or agency from verifying the validity of a written request described in subsection (a) with the Federal, State, Tribal, or local law enforcement agency making that written request; or

“(2) to relieve a financial institution from complying with any reporting requirements, including the reporting of suspicious transactions under section 5318(g).

“(c) Letter termination date—For the purposes of this section, any written request described in subsection (a) shall include a termination date after which that request shall no longer apply.”

(B)

Amendment to Public Law 91–508— Chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.) is amended by adding at the end the following:

“130. Safe harbor with respect to keep open directives

“(a) Definition—In this section, the term financial institution has the meaning given the term in section 123(b).

“(b) Safe harbor—With respect to a customer account or customer transaction of a financial institution, if a Federal, State, Tribal, or local law enforcement agency requests, in writing, the financial institution to keep that account or transaction open—

“(1) the financial institution shall not be liable under this chapter for maintaining that account or transaction consistent with the parameters of the request; and

“(2) no Federal or State department or agency may take any adverse supervisory action under this chapter with respect to the financial institution for maintaining that account or transaction consistent with the parameters of the request.

“(c) Rule of construction—Nothing in this section may be construed—

“(1) as preventing a Federal or State department or agency from verifying the validity of a written request described in subsection (b) with the Federal, State, Tribal, or local law enforcement agency making that written request; or

“(2) to relieve a financial institution from complying with any reporting requirements, including the reporting of suspicious transactions under section 5318(g) of title 31, United States Code.

“(d) Letter termination date—For the purposes of this section, any written request described in subsection (b) shall include a termination date after which that request shall no longer apply.”

(2)

Clerical amendments—

(A)

Title 31— The table of contents for chapter 53 of title 31, United States Code, is amended by inserting after the item relating to section 5332 the following:

(B)

Public Law 91–508— The table of contents for chapter 2 of title I of Public Law 91–508 (12 U.S.C. 1951 et seq.) is amended by adding at the end the following:

(b)

Determination of Budgetary Effects— The budgetary effects of this section, for the purpose of complying with the Statutory Pay-As-You-Go Act of 2010, shall be determined by reference to the latest statement titled “Budgetary Effects of PAYGO Legislation” for this Act, submitted for printing in the Congressional Record by the Chairman of the House Budget Committee, provided that such statement has been submitted prior to the vote on passage.

Sec. 208 Additional damages for repeat Bank Secrecy Act violators

Section 5321 of title 31, United States Code, is amended by adding at the end the following:

“(f) Additional damages for repeat violators—In addition to any other fines permitted by this section and section 5322, with respect to a person who has previously violated a provision of (or rule issued under) this subchapter, section 21 of the Federal Deposit Insurance Act (12 U.S.C. 1829b), or section 123 of Public Law 91–508, the Secretary of the Treasury may impose an additional civil penalty against such person for each additional such violation in an amount equal to up to three times the profit gained or loss avoided by such person as a result of the violation.”

Sec. 209 Encouraging information sharing and public-private partnerships

(a)

In general— FinCEN shall convene a supervisory team of relevant Federal agencies, private sector experts in banking, national security and law enforcement, and other stakeholders as FinCEN deems appropriate to examine strategies to increase public-private sector cooperation for purposes of countering proliferation finance and sanctions evasion.

(b)

Meetings— The supervisory team shall meet periodically to advise on strategies to combat proliferation financing risk.

Title II — Improving AML-CFT communication, oversight, and processes

II Improving AML-CFT communication, oversight, and processes