UPDATED: House passes bills for financial institution ‘safe harbor’; penalty for some living will, stress test disclosures

The House Monday and Tuesday passed two bills that would (1) provide a safe harbor for keeping suspicious accounts open at the behest of law enforcement and (2) create a criminal penalty for releasing certain living will and stress test determinations without authorization.

Debate on the measures was completed Monday. Both cleared the House with overwhelming majorities in their favor but require Senate passage before they can become law. They are:

  • The Cooperate with Law Enforcement Agencies and Watch Act of 2018 (H.R. 5783): Passed by the House Monday on a vote of 379-4, H.R. 5783 would allow a financial institution to comply with a written request by law enforcement – meaning a federal, state, tribal or local law enforcement body – to maintain a suspicious account without being penalized by any federal or state department or agency. The bill does not prevent federal authorities from validating a cited request to hold an account open, and it also does not relieve a financial institution from complying with federal reporting requirements, including suspicious activity report (SAR) requirements. The bill was reported out by the House Financial Services Committee in early June on a vote of 55-0. A similar bill, S. 3045, awaits action of the Senate Banking Committee.
  • The Prevention of Private Information Dissemination Act of 2017 (H.R. 4294): Passed Tuesday on a vote of 392-2, H.R. 4294 would establish a criminal penalty for unauthorized disclosures by officers or employees of a federal department or agency of banking firms’ living will and stress test determinations. Related to a provision in the House-passed Financial CHOICE Act that aims to revise or roll back significant portions of the Dodd-Frank Act, H.R. 4294 was cleared by the House Financial Services Committee in November (vote, 60-0) and discharged by the Judiciary Committee in May.

Cooperate with Law Enforcement Agencies and Watch Act of 2018 (H.R. 5783)

Prevention of Private Information Dissemination Act of 2017 (H.R. 4294)