SAFE Banking Act of 2021

II 117TH CONGRESS 1ST SESSION S. 910 To create protections for financial institutions that provide financial services to cannabis-related legitimate businesses and service providers for such businesses, and for other purposes. IN THE SENATE OF THE UNITED STATES MARCH 23, 2021 Mr. MERKLEY (for himself, Mr. DAINES, Mr. MENENDEZ, Ms. SINEMA, Mr. MARKEY, Mr. PADILLA, Mr. LEAHY, Mr. DURBIN, Mr. WYDEN, Ms. HIRONO, Ms. SMITH, Mr. KING, Ms. CORTEZ MASTO, Mr. BENNET, Mr. TESTER, Ms. ROSEN, Mr. CRAMER, Mr. SULLIVAN, Mrs. GILLIBRAND, Ms. WARREN, Mr. MURPHY, Mr. PETERS, Mr. SANDERS, Mr. SCHATZ, Mrs. MURRAY, Ms. KLOBUCHAR, Mr. PAUL, Mr. CASSIDY, Ms. LUMMIS, and Ms. MURKOWSKI) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To create protections for financial institutions that provide financial services to cannabis-related legitimate busi- nesses and service providers for such businesses, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 910 IS SECTION 1. SHORT TITLE; TABLE OF CONTENTS; PURPOSE. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Secure And Fair Enforcement Banking Act of 2021’’ or 3 the ‘‘SAFE Banking Act of 2021’’. 4 (b) TABLE OF CONTENTS.—The table of contents for 5 this Act is as follows: 6 Sec. 1. Short title; table of contents; purpose. Sec. 2. Safe harbor for depository institutions. Sec. 3. Protections for ancillary businesses. Sec. 4. Protections under federal law. Sec. 5. Rules of construction. Sec. 6. Requirements for filing suspicious activity reports. Sec. 7. Guidance and examination procedures. Sec. 8. Annual diversity and inclusion report. Sec. 9. GAO study on diversity and inclusion. Sec. 10. GAO study on effectiveness of certain reports on finding certain per- sons. Sec. 11. Application of this act with respect to hemp-related legitimate busi- nesses and hemp-related service providers. Sec. 12. Banking services for hemp-related legitimate businesses and hemp-re- lated service providers. Sec. 13. Requirements for deposit account termination requests and orders. Sec. 14. Definitions. (c) PURPOSE.—The purpose of this Act is to increase 7 public safety by ensuring access to financial services to 8 cannabis-related legitimate businesses and service pro- 9 viders and reducing the amount of cash at such busi- 10 nesses. 11 SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS. 12 (a) IN GENERAL.—A Federal banking regulator may 13 not— 14 (1) terminate or limit the deposit insurance or 15 share insurance of a depository institution under the 16 Federal Deposit Insurance Act (12 U.S.C. 1811 et 17 VerDate Sep 11 2014 02:35 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 910 IS seq.), the Federal Credit Union Act (12 U.S.C. 1751 1 et seq.), or take any other adverse action against a 2 depository institution under section 8 of the Federal 3 Deposit Insurance Act (12 U.S.C. 1818) solely be- 4 cause the depository institution provides or has pro- 5 vided financial services to a cannabis-related legiti- 6 mate business or service provider; 7 (2) prohibit, penalize, or otherwise discourage a 8 depository institution from providing financial serv- 9 ices to a cannabis-related legitimate business or 10 service provider or to a State, political subdivision of 11 a State, or Indian Tribe that exercises jurisdiction 12 over cannabis-related legitimate businesses; 13 (3) recommend, incentivize, or encourage a de- 14 pository institution not to offer financial services to 15 an account holder, or to downgrade or cancel the fi- 16 nancial services offered to an account holder solely 17 because— 18 (A) the account holder is a cannabis-re- 19 lated legitimate business or service provider, or 20 is an employee, owner, or operator of a can- 21 nabis-related legitimate business or service pro- 22 vider; 23 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 910 IS (B) the account holder later becomes an 1 employee, owner, or operator of a cannabis-re- 2 lated legitimate business or service provider; or 3 (C) the depository institution was not 4 aware that the account holder is an employee, 5 owner, or operator of a cannabis-related legiti- 6 mate business or service provider; 7 (4) take any adverse or corrective supervisory 8 action on a loan made to— 9 (A) a cannabis-related legitimate business 10 or service provider, solely because the business 11 is a cannabis-related legitimate business or 12 service provider; 13 (B) an employee, owner, or operator of a 14 cannabis-related legitimate business or service 15 provider, solely because the employee, owner, or 16 operator is employed by, owns, or operates a 17 cannabis-related legitimate business or service 18 provider, as applicable; or 19 (C) an owner or operator of real estate or 20 equipment that is leased to a cannabis-related 21 legitimate business or service provider, solely 22 because the owner or operator of the real estate 23 or equipment leased the equipment or real es- 24 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 910 IS tate to a cannabis-related legitimate business or 1 service provider, as applicable; or 2 (5) prohibit or penalize a depository institution 3 (or entity performing a financial service for or in as- 4 sociation with a depository institution) for, or other- 5 wise discourage a depository institution (or entity 6 performing a financial service for or in association 7 with a depository institution) from, engaging in a fi- 8 nancial service for a cannabis-related legitimate 9 business or service provider. 10 (b) SAFE HARBOR APPLICABLE TO DE NOVO INSTI- 11 TUTIONS.—Subsection (a) shall apply to an institution ap- 12 plying for a depository institution charter to the same ex- 13 tent as such subsection applies to a depository institution. 14 SEC. 3. PROTECTIONS FOR ANCILLARY BUSINESSES. 15 For the purposes of sections 1956 and 1957 of title 16 18, United States Code, and all other provisions of Fed- 17 eral law, the proceeds from a transaction involving activi- 18 ties of a cannabis-related legitimate business or service 19 provider shall not be considered proceeds from an unlawful 20 activity solely because— 21 (1) the transaction involves proceeds from a 22 cannabis-related legitimate business or service pro- 23 vider; or 24 (2) the transaction involves proceeds from— 25 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 910 IS (A) cannabis-related activities described in 1 section 14(4)(B) conducted by a cannabis-re- 2 lated legitimate business; or 3 (B) activities described in section 4 14(13)(A) conducted by a service provider. 5 SEC. 4. PROTECTIONS UNDER FEDERAL LAW. 6 (a) IN GENERAL.—With respect to providing a finan- 7 cial service to a cannabis-related legitimate business 8 (where such cannabis-related legitimate business operates 9 within a State, political subdivision of a State, or Indian 10 country that allows the cultivation, production, manufac- 11 ture, sale, transportation, display, dispensing, distribution, 12 or purchase of cannabis pursuant to a law or regulation 13 of such State, political subdivision, or Indian Tribe that 14 has jurisdiction over the Indian country, as applicable) or 15 a service provider (wherever located), a depository institu- 16 tion, entity performing a financial service for or in associa- 17 tion with a depository institution, or insurer that provides 18 a financial service to a cannabis-related legitimate busi- 19 ness or service provider, and the officers, directors, and 20 employees of that depository institution, entity, or insurer 21 may not be held liable pursuant to any Federal law or 22 regulation— 23 (1) solely for providing such a financial service; 24 or 25 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 910 IS (2) for further investing any income derived 1 from such a financial service. 2 (b) PROTECTIONS FOR FEDERAL RESERVE BANKS 3 AND FEDERAL HOME LOAN BANKS.—With respect to 4 providing a service to a depository institution that pro- 5 vides a financial service to a cannabis-related legitimate 6 business (where such cannabis-related legitimate business 7 operates within a State, political subdivision of a State, 8 or Indian country that allows the cultivation, production, 9 manufacture, sale, transportation, display, dispensing, dis- 10 tribution, or purchase of cannabis pursuant to a law or 11 regulation of such State, political subdivision, or Indian 12 Tribe that has jurisdiction over the Indian country, as ap- 13 plicable) or service provider (wherever located), a Federal 14 reserve bank or Federal Home Loan Bank, and the offi- 15 cers, directors, and employees of the Federal reserve bank 16 or Federal Home Loan Bank, may not be held liable pur- 17 suant to any Federal law or regulation— 18 (1) solely for providing such a service; or 19 (2) for further investing any income derived 20 from such a service. 21 (c) PROTECTIONS FOR INSURERS.—With respect to 22 engaging in the business of insurance within a State, polit- 23 ical subdivision of a State, or Indian country that allows 24 the cultivation, production, manufacture, sale, transpor- 25 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 910 IS tation, display, dispensing, distribution, or purchase of 1 cannabis pursuant to a law or regulation of such State, 2 political subdivision, or Indian Tribe that has jurisdiction 3 over the Indian country, as applicable, an insurer that en- 4 gages in the business of insurance with a cannabis-related 5 legitimate business or service provider or who otherwise 6 engages with a person in a transaction permissible under 7 State law related to cannabis, and the officers, directors, 8 and employees of that insurer may not be held liable pur- 9 suant to any Federal law or regulation— 10 (1) solely for engaging in the business of insur- 11 ance; or 12 (2) for further investing any income derived 13 from the business of insurance. 14 (d) FORFEITURE.— 15 (1) DEPOSITORY INSTITUTIONS.—A depository 16 institution that has a legal interest in the collateral 17 for a loan or another financial service provided to an 18 owner, employee, or operator of a cannabis-related 19 legitimate business or service provider, or to an 20 owner or operator of real estate or equipment that 21 is leased or sold to a cannabis-related legitimate 22 business or service provider, shall not be subject to 23 criminal, civil, or administrative forfeiture of that 24 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 910 IS legal interest pursuant to any Federal law for pro- 1 viding such loan or other financial service. 2 (2) FEDERAL RESERVE BANKS AND FEDERAL 3 HOME LOAN BANKS.—A Federal reserve bank or 4 Federal Home Loan Bank that has a legal interest 5 in the collateral for a loan or another financial serv- 6 ice provided to a depository institution that provides 7 a financial service to a cannabis-related legitimate 8 business or service provider, or to an owner or oper- 9 ator of real estate or equipment that is leased or 10 sold to a cannabis-related legitimate business or 11 service provider, shall not be subject to criminal, 12 civil, or administrative forfeiture of that legal inter- 13 est pursuant to any Federal law for providing such 14 loan or other financial service. 15 SEC. 5. RULES OF CONSTRUCTION. 16 (a) NO REQUIREMENT TO PROVIDE FINANCIAL 17 SERVICES.—Nothing in this Act shall require a depository 18 institution, entity performing a financial service for or in 19 association with a depository institution, or insurer to pro- 20 vide financial services to a cannabis-related legitimate 21 business, service provider, or any other business. 22 (b) GENERAL EXAMINATION, SUPERVISORY, AND 23 ENFORCEMENT AUTHORITY.—Nothing in this Act may be 24 construed in any way as limiting or otherwise restricting 25 VerDate Sep 11 2014 02:35 Apr 13, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 910 IS the general examination, supervisory, and enforcement au- 1 thority of the Federal banking regulators, provided that 2 the basis for any supervisory or enforcement action is not 3 the provision of financial services to a cannabis-related le- 4 gitimate business or service provider. 5 (c) BUSINESS OF INSURANCE.—Nothing in this Act 6 shall interfere with the regulation of the business of insur- 7 ance in accordance with the Act of March 9, 1945 (59 8 Stat. 33, chapter 20; 15 U.S.C. 1011 et seq.) (commonly 9 known as the ‘‘McCarran-Ferguson Act’’) and the Dodd- 10 Frank Wall Street Reform and Consumer Protection Act 11 (12 U.S.C. 5301 et seq.). 12 SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY 13 REPORTS. 14 Section 5318(g) of title 31, United States Code, is 15 amended by adding at the end the following: 16 ‘‘(5) REQUIREMENTS FOR CANNABIS-RELATED 17 LEGITIMATE BUSINESSES.— 18 ‘‘(A) IN GENERAL.—With respect to a fi- 19 nancial institution or any director, officer, em- 20 ployee, or agent of a financial institution that 21 reports a suspicious transaction pursuant to 22 this subsection, if the reason for the report re- 23 lates to a cannabis-related legitimate business 24 or service provider, the report shall comply with 25 VerDate Sep 11 2014 23:20 Apr 12, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S910.IS S910 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 910 IS appropriate guidance issued by the Financial 1 Crimes Enforcement Network. Not later than 2 the end of the 180-day period beginning on the 3 date of enactment of this paragraph, the Sec- 4 retary shall update the February 14, 2014, 5 guidance titled ‘BSA Expectations Regarding 6 Marijuana-Related Businesses’ (FIN-2014- 7 G001) to ensure that the guidance is consistent 8 with the purpose and intent of the SAFE 9 Banking Act of 2021 and does not significantly 10 inhibit the provision of [Text truncated for display. Full text available on Congress.gov.]