Should Banks Get Safe Harbor From Regulators When Law Enforcement Asks Them to Keep a Suspected Criminal’s Account Open? (H.R. 5783)

What is H.R. 5783?

(Updated September 25, 2018)

This bill ― the Cooperate with Law Enforcement Agencies and Watch Act ― would provide a safe harbor for financial institutions that maintain a customer account at the request of a federal or state law enforcement agency. Currently, 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.

Argument in favor

This bill would help stop crime by allowing financial institutions to more easily, and without repercussion, help law enforcement.

Argument opposed

Financial institutions shouldn’t keep an account open at the request of law enforcement if the customer is engaged in illegal activity.

Impact

Financial institutions; and law enforcement.

Cost of H.R. 5783

A CBO estimate is unavailable.

Additional Info

In-Depth: Introduced by Rep. French Hill (R-AR), this bill seeks to strengthen protections for financial institutions that are called upon by law enforcement for help during criminal investigations.

“As a former community banker, I have dealt with the conflict of wanting to help law enforcement agencies when receiving a ‘Keep Open Letter,’ while not being able to because of the need to comply with the requirements set forth by a regulator. That is why I am pleased to introduce this commonsense bill, which enables partnerships without repercussions between law enforcement agencies and our local financial institutions by allowing law enforcement to monitor cash flows associated with criminal investigations at a financial institution... This is another way Congress is giving our law enforcement the tools they need to prosecute bad actors wanting to use the American financial system for their criminal acts and to keep Americans safer.”

This bill passed the House Committee on Financial Services on a 55-0 vote and has the support of one cosponsor, Rep. Bill Foster (D-IL).

Media:

• Sponsoring Rep. French Hill (R-AR) Press Release
  
• Washington Examiner