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“COOPERATE WITH LAW ENFORCEMENT AGENCIES AND WATCH ACT OF 2019” mentioning the U.S. Dept of State was published in the House of Representatives section on pages H2623-H2625 on March 11, 2019.
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COOPERATE WITH LAW ENFORCEMENT AGENCIES AND WATCH ACT OF 2019
Ms. WATERS. Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 758) to provide a safe harbor for financial institutions that maintain a customer account or customer transaction at the request of a Federal or State law enforcement agency, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 758
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Cooperate with Law Enforcement Agencies and Watch Act of 2019''.
SEC. 2. SAFE HARBOR WITH RESPECT TO KEEP OPEN LETTERS.
(a) In General.--Subchapter II of chapter 53 of title 31, United States Code, is amended by adding at the end the following:
``Sec. 5333. Safe harbor with respect to keep open letters
``(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, the financial institution to keep such account or transaction open--
``(1) the financial institution shall not be liable under this subchapter for maintaining such 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 such account or transaction consistent with the parameters of the request.
``(b) Rule of Construction.--Nothing in this section may be construed--
``(1) from preventing a Federal or State department or agency from verifying the validity of a written request described under subsection (a) with the Federal, State, Tribal, or local law enforcement agency making the 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 purposes of this section, any written request described under subsection (a) shall include a termination date after which such request shall no longer apply.''.
(b) Clerical Amendment.--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:
``5333. Safe harbor with respect to keep open letters.''.
SEC. 3. DETERMINATION OF BUDGETARY EFFECTS.
The budgetary effects of this Act, 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.
The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from California (Ms. Waters) and the gentleman from Arkansas (Mr. Hill) each will control 20 minutes.
The Chair recognizes the gentlewoman from California.
General Leave
Ms. WATERS. Mr. Speaker, I ask unanimous consent that all Members have 5 legislative days within which to revise and extend their remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the gentlewoman from California?
There was no objection.
Ms. WATERS. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, H.R. 758 would strengthen cooperation between financial institutions and law enforcement agencies to better detect, deter, and combat terrorism and financial crimes.
With respect to the Bank Secrecy Act anti-money laundering, referred to as BSA/AML, supervisory actions, this bill would carve out a narrow safe harbor for financial institutions to keep a customer's account open at the written request of a law enforcement agency, including those at the Federal, State, local, and Tribal levels.
This cooperation will enable law enforcement agencies to follow the money in the bank accounts of terrorists, human traffickers, corrupt officials, and those involved with organized crime.
Of equal importance, the legislation provides an assurance to financial institutions, clarifying that they will not be held liable for their cooperation and collaboration with law enforcement in helping to thwart illicit finance.
I will note that law enforcement agencies are currently expected to provide a written notice to financial institutions, requesting that the accounts of bad actors remain open to monitor transactions and build stronger criminal cases. However, this practice does not always happen and exposes financial institutions to enforcement actions from their banking regulators. Banks should not be put in a position to choose whether or not to help law enforcement out of concern about regulatory consequences.
We simply cannot allow bad actors to launder money and finance terror through our banks. H.R. 758 will encourage financial institutions to maintain a strong partnership with law enforcement.
In the 115th Congress, this bill was unanimously approved by the Financial Services Committee. The House passed the bill by a vote of 379-4.
I thank the gentleman from Arkansas (Mr. Hill) and the gentleman from Illinois (Mr. Foster) for introducing this bipartisan piece of legislation. This bill is one example of our committee's efforts to fight terrorism, corruption, and financial crime. I urge all Members to vote ``yes'' on H.R. 758. I reserve the balance of my time.
Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, first, let me thank Chairwoman Waters for her work on this bill. I am delighted the House is considering this important bill, H.R. 758, which I have had the pleasure to work on over the past year with my good friend from Illinois, Congressman Foster.
As a former community banker, I have dealt with the conflict of wanting to help law enforcement agencies when receiving a keep open letter, but not being able to because of the need to comply with the requirements set forth by a regulator, frequently and often in the middle of a bank exam.
Today, the overall purpose of this bill is to support law enforcement and reduce money laundering and terrorist financing through our banking system. That is why, along with my friend Mr. Foster, I was pleased to introduce this, as the chairwoman said, narrow, commonsense bill, which enables partnerships without repercussions between law enforcement and our local financial institutions.
This legislation allows law enforcement to monitor cash flows associated with criminal investigations at financial institutions. Under the Bank Secrecy Act and anti-money laundering regulations, banks face strict rules for managing accounts so that they cannot facilitate money laundering, terrorism financing, drug running, and other illegal activities.
Sometimes, banks receive notices from law enforcement agencies known as keep open letters to encourage them to keep an account open so that law enforcement can monitor what they think to be and suspect to be criminal activity and track the payments for better monitoring.
I have heard recently from banks that they are seeing an increase in the number of keep open letters, many of which can be attributable to new human trafficking investigations. Allowing banks to keep these accounts open will help stop these terrible criminal actions.
Currently, if banks help law enforcement and comply with the keep open letter request, they face the risk of being penalized by someone from the same regulatory agency. This commonsense bill supports those efforts by law enforcement by allowing financial institutions to comply with such requests to maintain a suspicious account without being penalized in the middle of a bank exam. Under this bill, no Federal department or agency may take an adverse supervisory action with respect to the financial institution that is keeping the account open.
As the chairwoman said, last Congress, this legislation unanimously passed out of our House Financial Services Committee and passed under the suspension of the rules. The legislation was also included as a provision last Congress in the JOBS 3.0 package.
Chairman Waters and former Chairman Hensarling made fighting illicit finance a priority for our committee. Given the strong bipartisanship, I urge my colleagues on both sides of the aisle to support this measure. It will give law enforcement the tools it needs to prosecute bad actors who are exploiting our financial system.
I reserve the balance of my time.
Ms. WATERS. Mr. Speaker, I yield 3 minutes to the gentleman from Illinois (Mr. Foster).
{time} 1645
Mr. FOSTER. Mr. Speaker, I thank Chairwoman Waters for yielding.
Mr. Speaker, I would like to start by thanking the chairwoman for bringing up this bipartisan bill today and for maintaining bipartisan momentum in the areas where bipartisan agreement is achievable. Chairwoman Waters and her staff were instrumental in passing this bill in the last Congress and including it in JOBS 3.0.
I would also like to thank my friend, Congressman Hill, for working on the Cooperate with Law Enforcement Agencies and Watch Act, the CLAW Act, with me.
I am proud to support this bill, which passed with very strong bipartisan support in the last Congress, a 55-0 vote in the Financial Services Committee, a 379-4 vote on the House floor.
This bill creates a commonsense safe harbor from Bank Secrecy Act liability for a bank that keeps an account open at the request of law enforcement. For background, law enforcement agencies sometimes send what are called keep open letters to financial institutions so that they can obtain critical evidence in investigations by following the money.
While following these law enforcement requests is optional, agreeing to them does, in fact, create a technical violation of the Bank Secrecy Act. This complicates the decision for a financial institution that should be simple. This could, in fact, undermine our efforts to prevent illicit finance or money laundering.
This bill will enhance the ability of the law enforcement community to track funds in a criminal investigation, leading to better evidence and, hopefully, conviction of criminals higher up in the hierarchy. To be clear, nothing in this bill takes away from financial regulators' safety and soundness powers, and financial institutions still have to file SARs when they have a keep open letter.
In addition, this bill requires that the keep open letters have a definite duration but does not preclude law enforcement from sending subsequent letters to extend the period, should the investigation continue.
This bill is a great example of how Democrats and Republicans can come together on a number of issues of common interest.
In a world in which criminals and criminal organizations have access to increasingly sophisticated tools and technologies to carry out their criminal activities, we should help financial institutions in leveling the playing field to bring these criminals to justice.
This bill follows other commonsense, bipartisan efforts that I have supported to modernize our Nation's ability to confront dangerous criminals and criminal organizations. I recently introduced with Congressman Kustoff the CONFRONT Act, which would require the Treasury Department to develop a national strategy to combat the financial crimes of transnational criminal organizations and individuals. I am hopeful that this bill can also be passed in the near future with similarly strong bipartisan support.
This bill today is an important measure that allows financial institutions to effectively assist with combating crimes such as money laundering and illicit financing, and I urge my colleagues to support this bill.
Mr. HILL of Arkansas. Mr. Speaker, I have no further speakers on this side of the aisle.
Mr. Speaker, in closing, I would just simply urge, with the work done by Mr. Foster and myself, and with thanks to the Chair, that we have strong bipartisan support in favor of H.R. 758, and I yield back the balance of my time.
Ms. WATERS. Mr. Speaker, I am pleased that Mr. Hill and Mr. Foster have brought this measure to the House on a bipartisan basis. It will help provide law enforcement more access to the critical information it needs and in a timely manner.
Mr. Speaker, I urge my colleagues to join me in supporting this important piece of legislation, and I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the gentlewoman from California (Ms. Waters) that the House suspend the rules and pass the bill, H.R. 758, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds being in the affirmative, the ayes have it.
Ms. WATERS. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further proceedings on this motion will be postponed.
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