Tighten Surveillance Rules, Block Fed Digital Dollar

Summary#

This bill would extend and change parts of the law that govern Section 702 surveillance (the FISA Amendments Act of 2008) and add rules about Central Bank Digital Currency (CBDC). Its main changes are to extend the legal authority for Title VII surveillance until 2029, add limits and warrant requirements for acquiring communications of U.S. persons, create new criminal penalties for improper handling or querying of Section 702 data, order audits and court oversight, and ban the Federal Reserve from issuing a CBDC until 2031 without an act of Congress.

Most important changes:

• Extends the repeal/expiration date for Title VII/Section 702 authorities from June 12, 2026 to June 12, 2029.
• Limits FBI ingestion/use of information about U.S. persons collected under Section 702 unless tied to an open, predicated FBI national security investigation; adds a probable-cause requirement when communications of a U.S. person were incidentally collected.
• Prohibits intentional targeting of U.S. persons under Section 702 and requires the government to get a warrant or an appropriate court order when probable cause exists that a U.S. person is a foreign power/agent or has committed a crime.
• Creates criminal penalties for unauthorized disclosure or retention of classified communications of known U.S. persons, unauthorized U.S.-person queries, and falsifying compliance information to FISC; sets prison terms up to 8 years for disclosures and up to 2 years for queries/fraud, with stated defenses.
• Increases oversight: quarterly FISC reviews and reports to Congress; a GAO audit of targeting procedures; requirement that certain Member access procedures to FISC be reissued.
• Prohibits the Fed from issuing a CBDC (as defined) directly or indirectly until Dec 31, 2031; says the Fed may not do so without congressional authorization. An exception says this ban does not apply to dollar-denominated, open, permissionless, private currencies that preserve cash-like privacy.

What it means for you#

• People who are U.S. persons (citizens, lawful permanent residents, and some U.S. entities):

  • The bill would bar intentional targeting of their communications under Section 702. If their communications are obtained, the FBI may only ingest and use them in analytic systems when tied to an open, predicated FBI national security investigation, and in some cases only with probable cause that the person is a foreign power or agent.
  • Information gathered in violation of the new targeting limits could be barred from use in criminal trials.

• People under investigation (suspected foreign agents or criminals):

  • The government could seek traditional warrants or FISA orders when there is probable cause that a U.S. person is a foreign power/agent or has committed a crime.

• Federal Bureau of Investigation and intelligence agencies:

  • Would face new limits on data ingestion, new procedures for when they may query or use U.S.-person data, a requirement that attorney approval (rather than a supervisor) be involved in certain FBI queries, periodic FISC review of compliance, and exposure to new criminal penalties for violations.
  • Must have AG and DNI jointly create procedures and standards for determining probable cause under the new rules.

• Federal employees and contractors who use Section 702 data:

  • Could face criminal penalties for unauthorized queries, retention, disclosure, or lying about compliance, though the bill lists certain defenses (e.g., authorized queries or good-faith compliance).

• Members of Congress:

  • The Attorney General must reissue procedures to ensure certain Members and staff access to FISC proceedings as required by existing law.

• Federal Reserve and financial sector:

  • The Federal Reserve and Reserve Banks are prohibited from creating or issuing a Fed-backed CBDC (as defined) directly or through intermediaries until Dec 31, 2031, and the Fed cannot do so without a new law from Congress. The bill permits private, open, permissionless dollar-denominated currencies that preserve cash-like privacy.

Expenses#

No publicly available information.

Possible or likely budget effects (inferred from the bill text):

• The GAO audit, quarterly FISC reviews, required reports to Congress, and new compliance oversight would likely raise administrative costs for courts, DOJ/ODNI, and agencies that manage Section 702 data.
• DOJ and other agencies may incur costs to change systems, update procedures, train staff, and implement attorney-approval workflows for queries.
• Potential enforcement costs from criminal prosecutions or investigations of violations.
• The Federal Reserve may incur legal and policy costs to document compliance with the CBDC prohibition and to avoid activities seen as creating a CBDC.

Proponents' View#

The bill appears intended to:

• Extend the legal authority for Section 702 collection so intelligence activities can continue while adding reforms.
• Reduce the risk that U.S. persons’ communications are collected, widely retained, or used without proper legal standards by requiring probable cause and limiting ingestion and queries.
• Increase accountability and oversight by requiring quarterly judicial reviews by the Foreign Intelligence Surveillance Court, quarterly reports to Congress, and a GAO audit of targeting procedures.
• Strengthen penalties and deterrence for unauthorized disclosure, improper querying, and false statements about compliance.
• Prevent the Federal Reserve from unilaterally issuing a central bank digital currency without Congress, preserving cash-like privacy unless Congress authorizes otherwise.

Opponents' View#

Reasonable concerns or open questions raised by the bill’s design:

• Extending Section 702 authorities is itself controversial; some may view extending the program while changing rules as trading one concern for another.
• The new probable-cause and warrant-related limits could complicate or slow intelligence and law enforcement work, possibly affecting timely national-security investigations; the bill does not detail how operational needs would be balanced with the new rules.
• Several important details are left to agency rulemaking: how the AG and DNI will define procedures and standards for probable cause, how agencies will implement attorney-approval for queries, and what counts as a “relevant” predicated FBI investigation.
• The criminal penalties are broad; they may deter irresponsible behavior but could also chill legitimate, good-faith actions if employees fear prosecution. The listed defenses may not resolve all ambiguity about authorized actions.
• The CBDC language contains an exception for “open, permissionless, and private” dollar-denominated currency that is vague; it is unclear what private tokens would qualify and how that would interact with existing law or financial regulation.
• The bill does not include a public fiscal estimate, so the size of implementation and enforcement costs is unclear.