actions and to enable foreign banks or brokers to disclose the identity of United States citizens without violating their country's secrecy laws. One of the changes in this connection is designed to prevent United States broker-dealers from effecting transactions in United States securities on behalf of foreign banks or brokers unless the foreign bank or broker discloses the identity of the person for whom it is acting, or certifies that it is not acting for a United States citizen or resident. It would be undesirable if enactment of this provision gave rise to fears on the part of potential foreign investors in United States securities that their transactions might be disclosed. This could result in an adverse effect on our balance of payments positions. In addition, the Board's experience under its margin regulations suggests that this feature of the bill might not be workable or effective. Our staff will be glad to work with your staff on these aspects of the matter. Finally, it seems clear that Titles I and II of the bill are directed to activities of private persons and commercial financial institutions. As a technical matter, however, there is language in Sections 123, 212–222, 231, and 241 of the bill that could be construed as applicable to the Federal Reserve Banks. While it is assumed that such a result is not intended, your Committee may wish to consider appropriate clarification, either in the bill or in the legislative history. Sincerely, J. L. ROBERTSON. 91ST CONGRESS 2D SESSION H. R. 15073 IN THE SENATE OF THE UNITED STATES JUNE 1, 1970 Read twice and referred to the Committee on Banking and Currency AN ACT To amend the Federal Deposit Insurance Act to require insured banks to maintain certain records, to require that certain transactions in United States currency be reported to the Department of the Treasury, and for other purposes. 1 2 3 4 Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I-FINANCIAL RECORDKEEPING 1 2 Section 101. Retention of records by insured banks 2 The Federal Deposit Insurance Act is amended 3 (1) by redesignating sections 21 and 22 as 22 and 23, 4 respectively, and (2) by inserting the following new section 5 immediately after section 20: 6 "SEC. 21. (a) (1) The Congress finds that adequate 7 records maintained by insured banks have a high degree of 8 usefulness in criminal, tax, and regulatory investigations and 9 10 11 12 proceedings. The Congress further finds that photocopies made by banks of checks, as well as records kept by banks of the identity of persons maintaining or authorized to act with respect to accounts therein, have been of particular value in 13 this respect. 14 15 "(2) It is the purpose of this section to require the maintenance of appropriate types of records by insured banks 16 where such records may have a high degree of usefulness in 17 criminal, tax, or regulatory investigations or proceedings. 18 "(b) The Secretary of the Treasury (referred to in this 19 section as the 'Secretary') shall prescribe regulations to carry 20 out the purposes of this section. 21 "(c) Each insured bank shall maintain such records and 22 other evidence as the Secretary shall require of the identity 23 of each person having an account with the bank and of each 24 individual authorized to sign checks, make withdrawals, or 25 otherwise act with respect to any such account. 1. 3 "(d) Each insured bank shall make, to the extent that 2 the regulations of the Secretary so require, 3 4 5 6 7 8 9 10 11 12 "(1) a photocopy or other copy of each check, draft, or similar instrument drawn on it and presented to it for payment. "(2) a record of each check, draft, or similar instrument received by it for deposit or collection, together with an identification of the party for whose account it is to be deposited or collected, unless the bank has already made a record of the party's identity pursuant to subsection (c). "(e) Whenever any individual engages (whether as 13 principal, agent, or bailee) in any transaction with an in14 sured bank which is required to be reported or recorded under 15 the Currency and Foreign Transactions Reporting Act, the 16 bank shall require and retain such evidence of the identity of 17 that individual as the Secretary may prescribe as appropriate 18 under the circumstances. 19 "(f) In addition to or in lieu of the records and evidence 20 otherwise referred to in this section, each insured bank shall 21 maintain such records and evidence as the Secretary may 22 prescribe to carry out the purposes of this section. 223 "(g) Any type of record or evidence required under 24 this section shall be retained for such period as the Secretary 25 may prescribe for the type in question. 4 1 "(h) The Secretary shall make an annual report to the 2 Congress of his implementation of the authority conferred 3 by this section and any similar authority with respect to 4 recordkeeping or reporting requirements conferred by other 5 6 provisions of law. "(i) Notwithstanding any other provisions of this sec7 tion the recordkeeping requirements referred to in this section 8 shall not apply to domestic financial transactions involving 9 less than $500." 10 11 12 13 Sec. 102. Retention of records by insured institutions Title IV of the National Housing Act is amended by adding at the end thereof the following new section: "SEC. 411. The Secretary of the Treasury shall pre14 scribe such regulations as may be appropriate to carry out, 15 with respect to insured institutions, the purposes set forth 17 18 in section 21 of the Federal Deposit Insurance Act with respect to insured banks." CHAPTER 2—OTHER FINANCIAL INSTITUTIONS 20 (a) The Congress finds that adequate records main 21 tained by businesses engaged in the functions described in |