text: SECTION 1. SHORT TITLE.
  
      This Act may be cited as the ``CTR Modernization Act''.
  
  SEC. 2. PURPOSES.
  
      The purposes of this Act are as follows:
              (1) To improve the quality and usefulness of currency 
          transaction reports in criminal, tax, and regulatory 
          investigations or proceedings.
              (2) To eliminate filing currency transaction reports 
          related to many innocent, infrequent, or idiosyncratic deposit 
          activities.
              (3) To further focus anti-money laundering investigations 
          and prosecutions by reducing the number of spurious, 
          duplicative, and innocent currency transaction reports and 
          increasing the usefulness of suspicious activity reports.
              (4) To maintain the high degree of usefulness of currency 
          transaction reports and adjust for inflation and current 
          financial practices the threshold for currency transaction 
          reports to a level consistent with the amount established 
          pursuant to Public Law 91-508 upon the enactment of such Public 
          Law in 1970.
              (5) To increase the usefulness of data collected through 
          currency transaction reports and suspicious activity reports 
          and for other purposes.
  
  SEC. 3. MODIFICATION OF CURRENCY TRANSACTION REPORTING THRESHOLD.
  
      (a) Threshold.--
              (1) Nondepository institutions.--The 1st sentence of 
          section 5313(a) of title 31, United States Code, is amended by 
          inserting ``, other than a depository institution,'' after 
          ``domestic financial institution''.
              (2) Depository institutions.--Subsection (a) of section 
          5313 of title 31, United States Code, is amended by inserting 
          after the 1st sentence (as amended by paragraph (1) of this 
          subsection) the following new sentence: ``When a depository 
          institution is involved in a transaction for the payment, 
          receipt, or transfer of United States coins or currency (or 
          other monetary instruments the Secretary of the Treasury 
          prescribes), in an amount, denomination, or amount and 
          denomination of not less than $30,000 and under circumstances 
          the Secretary prescribes by regulation, the depository 
          institution and any other participant in the transaction the 
          Secretary may prescribe shall file a report on the transaction 
          at the time and in the way the Secretary prescribes.''.
      (b) Regulation.--After the end of the 270-day period beginning on 
  the date of the enactment of the CTR Modernization Act, the Secretary 
  of the Treasury shall not require a depository institution to file a 
  currency transaction report when the transaction involves the transfer 
  of currency of an amount and denomination of less than $30,000.
      (c) Technical and Conforming Amendment.--Subsection (c) of section 
  5312 of title 31, United States Code, is amended by adding at the end 
  the following new paragraph:
              ``(2) Depository institution.--The term `depository 
          institution' means any insured depository institution (as 
          defined in section 3 of the Federal Deposit Insurance Act) and 
          any insured credit union (as defined in section 101(7) of the 
          Federal Credit Union Act).''.
  
  SEC. 4. PERIODIC REVIEW OF REPORTING THRESHOLD AND ADJUSTMENT FOR 
                INFLATION.
  
      Section 5318 of title 31, United States Code, is amended by adding 
  at the end the following new subsection:
      ``(o) Periodic Review of Reporting Threshold and Adjustment for 
  Inflation.--
              ``(1) In general.--Before the end of the 5-year period 
          beginning on the date of the enactment of the CTR Modernization 
          Act and at least every 5 years after the expiration of such 
          period, the secretary of the treasury shall--
                      ``(A) solicit and review public comments about the 
                  appropriateness, relevance, and utility of the then-
                  current threshold amount or denomination established by 
                  the Secretary;
                      ``(B) review the continuing appropriateness, 
                  relevance, and utility of each threshold amount or 
                  denomination established by the Secretary, in the 
                  Secretary's discretion, for any report required by the 
                  Secretary under this subchapter; and
                      ``(C) adjust such amount, at such time and in such 
                  manner as the Secretary considers appropriate but in no 
                  case later than 365 days following the expiration of 
                  the public comment period, for any inflation that the 
                  Secretary of the Treasury determines has occurred since 
                  the date any such amount was established or last 
                  adjusted, except that the Secretary of the Treasury 
                  shall not reduce such amount to an amount and 
                  denomination of less than $30,000.
              ``(2) Report.--Before the end of the 365-day period 
          beginning upon the completion of any review by the Secretary of 
          the Treasury under paragraph (1), the Secretary shall submit a 
          report to the Congress containing the findings and conclusions 
          of the Secretary in connection with such review, together with 
          an explanation for any adjustment, or lack of adjustment, of 
          any threshold amount or denomination by the Secretary as a 
          result of such review, including the adjustment for 
          inflation.''.
  
  SEC. 5. MODIFICATION OF EXEMPTION PROCESS.
  
      (a) Seasoned Customer Exemption.--Subsection (e) of section 5313 of 
  title 31, United States Code, is amended to read as follows:
      ``(e) Qualified Customer Exemption.--
              ``(1) In general.--Before the end of the 270-day period 
          beginning on the date of the enactment of the CTR Modernization 
          Act, the Secretary of the Treasury shall prescribe regulations 
          that exempt any depository institution from filing a report 
          pursuant to this section in a transaction for the payment, 
          receipt, or transfer of United States coins or currency (or 
          other monetary instruments the Secretary of the Treasury 
          prescribes) with a qualified customer of the depository 
          institution.
              ``(2) Qualified customer defined.--For purposes of this 
          section, the term `qualified customer', with respect to a 
          depository institution, has such meaning as the Secretary of 
          the Treasury shall prescribe, which shall include any person 
          that--
                      ``(A) is incorporated or organized under the laws 
                  of the United States or any State, including a sole 
                  proprietorship (as defined in 31 C.F.R. 
                  103.22(d)(6)(vii), as in effect on May 10, 2006), or is 
                  registered as and eligible to do business within the 
                  United States or a State;
                      ``(B) has maintained a deposit account with the 
                  depository institution for at least 12 months; and
                      ``(C) has engaged, using such account, in multiple 
                  currency transactions that are subject to the reporting 
                  requirements of subsection (a).
              ``(3) Regulations.--
                      ``(A) In general.--The Secretary of the Treasury 
                  shall prescribe regulations requiring a depository 
                  institution to file a 1-time notice of designation of 
                  exemption for each qualified customer of the depository 
                  institution.
                      ``(B) Form and content of exemption notice.--The 
                  Secretary shall by regulation prescribe the form, 
                  manner, content, and timing of the qualified customer 
                  exemption notice and such notice shall include 
                  information sufficient to identify the qualified 
                  customer and the accounts of the customer.
                      ``(C) Authority of secretary.--
                              ``(i) In general.--The Secretary may 
                          suspend, reject, or revoke any qualified 
                          customer exemption notice, in accordance with 
                          criteria prescribed by the Secretary by 
                          regulation.
                              ``(ii) Conditions.--The Secretary may 
                          establish conditions, in accordance with 
                          criteria prescribed by regulation, under which 
                          exempt qualified customers of an insured 
                          depository institution that is merged with or 
                          acquired by another insured depository 
                          institution will continue to be treated as 
                          designated exempt qualified customers of the 
                          surviving or acquiring institution.''.
      (b) 3-Year Review and Report.--Before the end of the 3-year period 
  beginning on the date of the enactment of this Act, the Secretary of 
  the Treasury, in consultation with the Attorney General, the Secretary 
  of Homeland Security, the Federal banking agencies, the banking 
  industry, and such other persons as the Secretary deems appropriate, 
  shall evaluate the operations and effect of the provisions of the 
  amendment made by subsection (a) and make recommendations to the 
  Congress as to any legislative action with respect to such provision as 
  the Secretary may determine to be appropriate.
  
  SEC. 6. IDENTIFYING SUSPICIOUS ACTIVITY.
  
      Subsection 5318(g) of title 31, United States Code, is amended by 
  adding at the end the following new paragraph:
              ``(5) Guidance on when to file a report.--Before the end of 
          the 270-day period beginning on the date of the enactment of 
          the CTR Modernization Act, the Secretary of the Treasury shall 
          prescribe regulations that provide guidance on examples of 
          transactions that--
                      ``(A) involved funds derived from illegal 
                  activities;
                      ``(B) were designed to evade any requirements under 
                  this subchapter, chapter 2 of title I of Public Law 91-
                  508, or the Internal Revenue Code of 1986; and
                      ``(C) have no business or apparent lawful 
                  purpose.''.
  
  SEC. 7. PROVIDING GENERAL INFORMATION REGARDING SUSPICIOUS ACTIVITY 
                REPORT REQUIREMENTS.
  
      Subsection 5318(g) of title 31, United States Code, is amended by 
  inserting after paragraph (5) (as added by section 6 of this Act) the 
  following new paragraph:
              ``(6) General notification to customers.--
                      ``(A) In general.--Before the end of the 270-day 
                  period beginning on the date of the enactment of the 
                  CTR Modernization Act, the Secretary of the Treasury 
                  shall prescribe regulations that create a list of 
                  information that may be disclosed to customers prior to 
                  the reporting of suspicious activity.
                      ``(B) Rule of construction.--Subparagraph (A) of 
                  this paragraph shall not be construed as creating any 
                  immunity from the notification prohibition under 
                  paragraph (2).''.
target: CTR Modernization Act - Amends federal law governing mandatory reports on currency transactions to exempt depository institutions from the requirement that all domestic financial institutions file a report on every domestic coin and currency transaction.
  
  Requires such a depository institution to file a currency transaction report, however, if the transaction involves at least $30,000.
  
  Prohibits the Secretary of the Treasury after a certain date from requiring a depository institution to file a currency transaction report regarding a transaction of less than $30,000.
  
  Directs the Secretary to: (1) review at least every five years the threshold for reporting currency transactions; and (2) adjust the threshold amount for inflation.
  
  Directs the Secretary to prescribe regulations that exempt any depository institution from reporting a currency transaction with a qualified customer.
  
  Defines qualified customer as any person that: (1) is incorporated or organized under federal or state law, or registered and eligible to do business within the United States or a state; (2) has maintained a deposit account with the depository institution for at least 12 months; and (3) has engaged, using such account, in multiple currency transactions subject to reporting requirements.
  
  Requires the Secretary to prescribe regulations that: (1) provide guidance on identifying currency transactions involving illegal or suspicious activities; and (2) create a list of information that may be disclosed to customers before the reporting of suspicious activity.
feat_title: To amend sections 5313 and 5318 of title 31, United States Code, to reform certain requirements for reporting cash transactions, and for other purposes.