HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 585 Access to Financial Institution Customer Accounts
SPONSOR(S): Commerce Committee, Insurance & Banking Subcommittee, Rommel
TIED BILLS: CS/HB 587 IDEN./SIM. BILLS: SB 1132
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Insurance & Banking Subcommittee 15 Y, 3 N, As CS Fletcher Lloyd
2) State Administration & Technology 10 Y, 0 N Perez Topp
Appropriations Subcommittee
3) Commerce Committee 17 Y, 0 N, As CS Fletcher Hamon
SUMMARY ANALYSIS
The federal Bank Secrecy Act (BSA) establishes reporting, recordkeeping, and related requirements for federal
and state-chartered financial institutions to help detect and prevent money laundering. Under the BSA,
financial institutions are required to report suspicious activity that might signify money laundering, tax evasion,
or other criminal activities. These types of reports are known as “suspicious activity reports” (SARs) and are
filed with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury.
Florida’s codification of the BSA is the Florida Control of Money-Laundering and Terrorist Financing in
Financial Institutions Act (Act). The Act requires financial institutions to submit to the Office of Financial
Regulation (OFR) certain reports and maintain certain records of customers, accounts, and transactions
involving currency or monetary instruments or suspicious activities in accordance with the policies of the BSA.
Subject to limited exceptions, the bill allows a customer or member of a financial institution who reasonably
believes a financial institution has, in bad faith, terminated, restricted, or taken similar action restricting access
to the customer’s or member’s account to file, within 30 days of such action, a complaint with OFR.
Upon receipt of a complaint from a customer or member, the bill requires:
OFR to notify the financial institution that a complaint has been filed;
The financial institution to file a termination-of-access report following notification;
OFR to investigate the report to determine whether the financial institution acted in bad faith; and
OFR to report any determination of bad faith by the financial institution to the Chief Financial Officer,
the Attorney General, and the customer or member.
The bill creates a private right of action for the recovery of damages against the financial institution if a
determination of a financial institution’s bad faith is made, including an award of attorney fees.
The bill also provides that a qualified public depository’s (QPD) bad faith suspension, termination, or similar
action restricting account access, or a QPD’s failure to cooperate in an investigation conducted pursuant to
proposed s. 655.49, F.S, is grounds for suspension or disqualification from the QPD program, as well as
grounds for the Chief Financial Officer to impose an administrative penalty on the QPD in lieu of a suspension
or disqualification.
The bill has no impact on state revenues or local government revenues and expenditures, but has an
indeterminate negative impact on state expenditures and an indeterminate positive impact on the private
sector.
The bill provides an effective date of July 1, 2024.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Financial Institutions Codes
Florida’s Financial Institutions Codes are codified under Title XXXVIII of the Florida Statutes. 1 The
Financial Institutions Codes apply to all state-authorized and state-chartered financial institutions and to
the enforcement of all laws relating to state-authorized and state-chartered financial institutions.2 The
Financial Institutions Codes define the term “financial institution” as a state or federal savings or thrift
association, bank, savings bank, trust company, international bank agency, international banking
corporation, international branch, international representative office, international administrative office,
international trust entity, international trust company representative office, qualified limited service
affiliate, credit union, or an agreement corporation operating pursuant to s. 25 of the Federal Reserve
Act, 12 U.S.C. ss. 601 et seq. or Edge Act corporation organized pursuant to s. 25(a) of the Federal
Reserve Act, 12 U.S.C. ss. 611 et seq.3
A primary purpose of the Financial Institutions Codes is to provide for and promote the safe and sound
conduct of the financial services industry in Florida.4 The specific chapters under the Financial
Institutions Codes are:
Ch. 655, F.S. – Financial Institutions Generally
Ch. 657, F.S. – Credit Unions
Ch. 658, F.S. – Banks and Trust Companies
Ch. 660, F.S. – Trust Business
Ch. 662, F.S. – Family Trust Companies
Ch. 663, F.S. – International Banking
Ch. 665, F.S. – Associations
Ch. 667, F.S. – Savings Banks
Office of Financial Regulation
The Office of Financial Regulation (OFR) is the regulatory authority for Florida’s financial services
industry.5 OFR reports to the Financial Services Commission (Commission) which is made up of the
Governor and the members of the Florida Cabinet: the Chief Financial Officer (CFO), Attorney General
(AG), and Agriculture Commissioner.6 OFR enforces and administers the Financial Institutions Codes;
is responsible for supervising banks, credit unions, savings associations, and international bank
agencies; and licenses and regulates non-depository finance companies and the securities industry. 7
Bank Secrecy Act
The federal Bank Secrecy Act (BSA)8 establishes reporting, recordkeeping, and related requirements
for federal and state-chartered9 financial institutions to help detect and prevent money laundering. 10
1 S. 655.005(1)(k), F.S.
2 S. 655.001(1), F.S.
3 S. 655.005(i), F.S.
4 S. 655.001(2), F.S.
5 Florida Office of Financial Regulation, About Our Agency, https://flofr.gov/sitePages/AboutOFR.htm (last visited Dec. 4,
2023).
6 Id.
7 Florida Department of Financial Services, Financial Services Commission, https://www.myfloridacfo.com/about/about -
dfs/commission (last visited Dec. 4, 2023). See also, s. 655.012, F.S.
8 31 U.S.C. § 5311 et seq.
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Specifically, the BSA and other anti-money laundering regulations (BSA/AML) require financial
institutions to, among other things, keep records of cash purchases of negotiable instruments and file
reports of cash transactions exceeding $10,000 (daily aggregate amount).11
Under the BSA/AML laws, financial institutions must also:
establish effective BSA compliance programs;
establish effective customer due diligence systems and monitoring programs;
screen against Office of Foreign Assets Control lists and other government lists;
establish an effective suspicious activity monitoring and reporting process; and
develop risk-based anti-money laundering programs.12
The U.S. Office of the Comptroller of Currency regularly conducts examinations of national banks,
federal branches, federal savings associations, and agencies of foreign banks in the U.S. to determine
compliance with BSA/AML laws.13
SUSPICIOUS ACTIVITY REPORTS
In addition to the other requirements under the BSA/AML laws, financial institutions are also required to
report suspicious activity that might signify money laundering, tax evasion, or other criminal activities. 14
These types of reports are known as “suspicious activity reports” (SAR) and are filed with the Financial
Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury, using
FinCEN’s BSA E-filing system.15
Under this requirement, a financial institution is required to file an SAR no later than 30 calendar days
after the date of initial detection of facts that may constitute a basis for filing an SAR.16 For instances
where no suspect was identified on the date of the incident requiring the filing, a financial institution
may delay filing an SAR for an additional 30 calendar days to identify a suspect. 17 However, in no case
shall reporting be delayed more than 60 calendar days after the date of initial detection of a reportable
transaction.18
Federal Trade Commission Act
Section 5 of the Federal Trade Commission Act (FTC Act), 15 U.S.C. § 45, prohibits “unfair or
deceptive acts or practices in or affecting commerce.” 19 The prohibition applies to all persons engaged
in commerce, including state-chartered banks.20 The Board of Governors of the Federal Reserve
System have authority under federal law 21 to take appropriate action when unfair or deceptive acts or
9 See, 12 C.F.R. § 326.8 (sets forth requirements for state-chartered banks to establish and maintain procedures to
ensure and monitor their compliance with the BSA). See also, 12 C.F.R. § 353 (establishes requirements for state-
chartered banks to file a suspicious activity report under certain circumstances).
10 U.S. Treasury Financial Crimes Enforcement Network, FinCEN’s Legal Authorities,
https://www.fincen.gov/resources/fincens-legal-authorities (last visited Dec. 6, 2023).
11 Id.
12 U.S. Office of the Comptroller of the Currency, Bank Secrecy Act, https://www.occ.treas.gov/topics/supervision-and-
examination/bsa/index-bsa.html (last visited Dec. 5, 2023).
13 Id.
14 U.S. Treasury Financial Crimes Enforcement Network, supra note 10.
15 U.S. Office of the Comptroller of the Currency, Suspicious Activity Report Program,
https://www.occ.treas.gov/publications-and-resources/forms/sar-program/index-sar-program.html (last visited Dec. 5,
2023).
16 Id.
17 Id.
18 Id.
19 Board of Governors of the Federal Reserve System, Division of Consumer and Community Affairs, Federal Trade
Commission Act (last updated Dec. 2016), p. 1, https://www.federalreserve.gov/boarddocs/supmanual/cch/ftca.pdf (last
visited Feb. 6, 2024).
20 Id.
21 Section 8 of the Federal Deposit Insurance Act, 12 U.S.C.A. § 1811, et seq.
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practices are discovered, regardless of state authorities having primary responsibility for enforcing state
statutes against unfair or deceptive acts or practices. 22
Under the FTC Act, an act or practice is considered unfair if it:
Causes or is likely to cause substantial injury to consumers;
Cannot be reasonably avoided by consumers; and
Is not outweighed by countervailing benefits to consumers or to competition. 23
According to the Board of Governors of the Federal Reserve System, there may be circumstances in
which an act or practice violates section 5 of the FTC Act even though the institution is in technical
compliance with other applicable laws, such as the BSA/AML laws. 24 Moreover, the policies behind the
BSA/AML laws could arguably outweigh a finding that a financial institution committed an unfair act
under section 5 of the FTC Act.
Florida Control of Money-Laundering and Terrorist Financing in Financial Institutions Act
The purpose of the Florida Control of Money-Laundering and Terrorist Financing in Financial
Institutions Act25 (Act), s. 655.50, F.S., is to require submission to OFR of certain reports and the
maintenance of certain records of customers, accounts, and transactions involving currency or
monetary instruments or suspicious activities if:26
such reports and records deter using financial institutions to conceal, move, or provide proceeds
obtained from or intended for criminal or terrorist activities; or
such reports and records have a high degree of usefulness in criminal, tax, or regulatory
investigations or proceedings.
The Act requires financial institutions to designate and retain a BSA/AML compliance officer, which is
defined as an officer that is responsible for the development and implementation of the financial
institution’s policies and procedures for complying with the requirements of the Act and BSA/AML
laws.27 Any change in a financial institution’s BSA/AML compliance officer must be reported to OFR. 28
Additionally, the Act requires financial institutions to maintain:29
full and complete records of all financial transactions, including all records required by the
BSA/AML laws, for a minimum of 5 years;
a copy of all reports filed with OFR as required under the Act for a minimum of 5 years after
submission of the report; and
a copy of all records of exemption for each qualified business customer 30 for a minimum of 5
calendar years after termination of exempt status of such customer.
The Act also requires financial institutions to keep a record of each financial transaction which involves
currency or other monetary instrument that has a value greater than $10,000, involves the proceeds of
22 Board of Governors of the Federal Reserve System, Division of Consumer and Community Affairs, supra note 19, p. 1.
23 Board of Governors of the Federal Reserve System, Division of Consumer and Community Affairs, supra note 19, p. 1.
24 Board of Governors of the Federal Reserve System, Division of Consumer and Community Affairs, supra note 19, p. 7.
25 S. 655.50, F.S.
26 S. 655.50(2), F.S.
27 S. 655.50(4), F.S.
28 Id.
29 S. 655.50(8), F.S.
30 See, 31 U.S.C. § 5313(e), providing that the U.S. Secretary of Treasury (Secretary) may exempt a depository institution
from BSA/AML reporting requirements for transactions between the institution and a “qualified business customer” (QBC)
of the institution on the basis of information submitted to the Secretary. QBC is defined as a business that:
maintains a transaction account at the depository institution;
frequently engages in transactions with the institution which are subject to BSA/AML reporting requirements; and
meets criteria which the Secretary determines is sufficient to ensure the purposes of the BSA/AML laws are
carried out without requiring a report for such transactions.
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specified unlawful activity, or is designed to evade the reporting requirements of the Act or other state
or federal laws, or which the financial institution reasonably believes is suspicious activity.31
A financial institution, or officer, employee, or agent thereof, which files a report in good faith pursuant
to the Act is not liable to any person for loss or damage caused in whole or in part by the making, filing,
or governmental use of the report, or any information contained therein. 32
OFR ENFORCEMENT
In addition to any other powers conferred by the Financial Institutions Codes, OFR may bring an action
in court to enforce or administer the Act, as well as issue and serve upon any person an order of
removal if OFR determines such person is violating, has violated, or is about to violate any provisions of
the Act or any similar state or federal law.33
OFR may also impose and collect an administrative fine against any person found to have violated any
provision of the Act or similar state or federal law in an amount up to $10,000 per day for each willful
violation or $500 per day for each negligent violation.34
VIOLATIONS OF THE ACT
A person who willfully violates the Act commits a misdemeanor of the first degree, 35 unless the violation
involves financial transactions of certain amounts, in which case the criminal penalties vary by first,
second, and third-degree felonies depending on the amount and timing of such transactions. 36
In addition to the criminal penalties, a person who violates the Act may be subject to a fine of up to
$250,000 or twice the value of the financial transaction, whichever is greater, and a subsequent
violation could result in a fine up to $500,000 or quintuple the value of the financial trans action,
whichever is greater.37
A person or financial institution who violates the Act may also be liable for a civil penalty of not more
than the greater of the value of the financial transaction involved or $25,000. 38
Effects of Banks’ Termination of Account Access
In 2022, banks filed over 1.8 million SARs, which is a 50% increase in two years. 39 Multiple SARs often
result in a financial institution terminating, suspending, or otherwise restricting a customer’s account
access.40 A New York Times study of over 500 cases of financial institutions “dropping” their
customers, including interviews with current and former bank industry staffers, revealed the negative
effects of a bank’s decision to remove a customer’s account access:
31 S. 655.50(5), F.S.
32 S. 655.50(5)(c), F.S.
33 Ss. 655.50(9)(a)-(c), F.S.
34 S. 655.50(9)(d), F.S.
35 S. 655.50(10)(a), F.S.
36 S. 655.50(10)(b),