This Act may be cited as the “Financial Institution Customer Protection Act of 2019”.

(a) Definitions.—In this section—

(1) the term “appropriate Federal banking agency”—

(A) has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

(B) in the case of an insured credit union, means the National Credit Union Administration Board;

(2) the term “depository institution”—

(A) has the meaning given the term in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813); and

(B) includes an insured credit union; and

(3) the term “insured credit union” has the meaning given the term in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

(b) Termination requests or orders must be material.—

(1) IN GENERAL.—The appropriate Federal banking agency may not formally or informally request or order a depository institution to terminate a specific customer account or group of customer accounts or to otherwise restrict or discourage a depository institution from entering into or maintaining a banking relationship with a specific customer or group of customers unless—

(A) the agency has a material reason for the request or order; and

(B) that reason is not based solely on reputation risk to the depository institution.

(2) TREATMENT OF NATIONAL SECURITY THREATS.—The appropriate Federal banking agency shall satisfy the requirement under paragraph (1) if the agency believes a specific customer or group of customers is, or is acting as a conduit for, an entity that—

(A) poses a threat to national security;

(B) is involved in terrorist financing;

(C) is an agency of the Government of Iran, North Korea, Syria, or any country listed from time to time on the state sponsor of terrorism list;

(D) is located in, or is subject to the jurisdiction of, any country described in subparagraph (C); or

(E) does business with any entity described in subparagraph (C) or (D), unless the appropriate Federal banking agency determines that the customer or group of customers has used due diligence to avoid doing business with any entity described in subparagraph (C) or (D).

(c) Notice requirement.—

(1) IN GENERAL.—If the appropriate Federal banking agency formally or informally requests or orders a depository institution to terminate a specific customer account or a group of customer accounts, the agency shall—

(A) provide the request or order to the institution in writing; and

(B) include with the request or order a written justification for why the termination is necessary, including any specific law (including regulations), the agency believes that the customer or group of customers are violating.

(2) JUSTIFICATION REQUIREMENT.—A written justification under paragraph (1)(B) may not be based solely on the reputation risk to the depository institution.

(d) Customer notice.—

(1) NOTICE REQUIRED.—Except as provided in paragraph (2), if the appropriate Federal banking agency orders a depository institution to terminate a specific customer account or a group of customer accounts, the depository institution shall inform the customer or customers of the justification for the termination of the account or accounts under subsection (c)(1)(B).

(2) NOTICE PROHIBITED IN CASES OF NATIONAL SECURITY.—If the appropriate Federal banking agency requests or orders a depository institution to terminate a specific customer account or a group of customer accounts based on a belief that the customer or customers pose a threat to national security, or are otherwise described in subsection (b)(2), neither the depository institution nor the appropriate Federal banking agency may inform the customer or customers of the justification for the termination of the account or accounts.

(e) Reporting requirement.—Each appropriate Federal banking agency shall issue an annual report to Congress stating—

(1) the aggregate number of specific customer accounts that the agency requested or ordered a depository institution to terminate during the 1-year period preceding the issuance of the report;

(2) the legal authority on which the agency relied in making the requests and orders described in paragraph (1); and

(3) the frequency with which the agency relied on each authority described in paragraph (2).

Section 951 of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (12 U.S.C. 1833a) is amended—