U.S. Rep. French Hill (R-AR) introduced legislation last week designed to provide protections for financial institutions and banks against regulatory agency backlash when cooperating with a federal or state law enforcement agency investigation.
Rep. Hill first introduced the bill — the Cooperate with Law Enforcement Agencies and Watch Act (H.R. 758) — in the 115th Congress, but it never went beyond the House.
“More than ever, financial institutions have the potential to play a pivotal role in helping law enforcement bring criminals to justice,” Hill said. “However, due to outdated regulations, banks that cooperate with law enforcement agencies risk being penalized by regulators while assisting with an ongoing criminal investigation.”
The bill provides a safe harbor for financial institutions that maintain a customer account at the request of a Federal or State law enforcement agency. In other words, no Federal or State department or agency may take any adverse supervisory action against the financial institution for maintaining such an account.
“As a former community banker, I have dealt with this 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,” Hill said. “H.R. 758 is a commonsense solution that allows financial institutions and law enforcement to better cooperate in order to prosecute bad actors wanting to use the American financial system for their criminal acts.”