House Banking Committee Chairman Jim Leach introduced legislation Friday that would let banks share information with each other on employees accused of financial crimes.
Under the legislation, which is intended to crack down harder on money launderers, a bank that fired an employee because of alleged crimes would be able to inform another financial institution seeking to hire that person. The bank would be protected from liability provided it had proof to back up the claim.
"It doesn't help the industry to pass on bad actors from one bank to another," said John J. Byrne, senior counsel for the American Bankers Association.
Also, the bill would urge the Federal Reserve Board and the Treasury Department to develop long-delayed rules on verifying their customers' identities.
The committee has scheduled a hearing on the bill for Thursday. Witnesses have not been named.