SAFE Banking Act of 2019

IIB 116TH CONGRESS 1ST SESSION H. R. 1595 IN THE SENATE OF THE UNITED STATES SEPTEMBER 26, 2019 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To create protections for depository 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 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 2 HR 1595 RFS SECTION 1. SHORT TITLE; PURPOSE. 1 (a) SHORT TITLE.—This Act may be cited as the 2 ‘‘Secure And Fair Enforcement Banking Act of 2019’’ or 3 the ‘‘SAFE Banking Act of 2019’’. 4 (b) PURPOSE.—The purpose of this Act is to increase 5 public safety by ensuring access to financial services to 6 cannabis-related legitimate businesses and service pro- 7 viders and reducing the amount of cash at such busi- 8 nesses. 9 SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS. 10 (a) IN GENERAL.—A Federal banking regulator may 11 not— 12 (1) terminate or limit the deposit insur- 13 ance or share insurance of a depository institu- 14 tion under the Federal Deposit Insurance Act 15 (12 U.S.C. 1811 et seq.), the Federal Credit 16 Union Act (12 U.S.C. 1751 et seq.), or take 17 any other adverse action against a depository 18 institution under section 8 of the Federal De- 19 posit Insurance Act (12 U.S.C. 1818) solely be- 20 cause the depository institution provides or has 21 provided financial services to a cannabis-related 22 legitimate business or service provider; 23 (2) prohibit, penalize, or otherwise discour- 24 age a depository institution from providing fi- 25 nancial services to a cannabis-related legitimate 26 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 3 HR 1595 RFS business or service provider or to a State, polit- 1 ical subdivision of a State, or Indian Tribe that 2 exercises jurisdiction over cannabis-related le- 3 gitimate businesses; 4 (3) recommend, incentivize, or encourage a 5 depository institution not to offer financial serv- 6 ices to an account holder, or to downgrade or 7 cancel the financial services offered to an ac- 8 count holder solely because— 9 (A) the account holder is a cannabis- 10 related legitimate business or service pro- 11 vider, or is an employee, owner, or oper- 12 ator of a cannabis-related legitimate busi- 13 ness or service provider; 14 (B) the account holder later becomes 15 an employee, owner, or operator of a can- 16 nabis-related legitimate business or service 17 provider; or 18 (C) the depository institution was not 19 aware that the account holder is an em- 20 ployee, owner, or operator of a cannabis-re- 21 lated legitimate business or service pro- 22 vider; 23 (4) take any adverse or corrective super- 24 visory action on a loan made to— 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 4 HR 1595 RFS (A) a cannabis-related legitimate busi- 1 ness or service provider, solely because the 2 business is a cannabis-related legitimate 3 business or service provider; 4 (B) an employee, owner, or operator 5 of a cannabis-related legitimate business or 6 service provider, solely because the em- 7 ployee, owner, or operator is employed by, 8 owns, or operates a cannabis-related legiti- 9 mate business or service provider, as appli- 10 cable; or 11 (C) an owner or operator of real es- 12 tate or equipment that is leased to a can- 13 nabis-related legitimate business or service 14 provider, solely because the owner or oper- 15 ator of the real estate or equipment leased 16 the equipment or real estate to a cannabis- 17 related legitimate business or service pro- 18 vider, as applicable; or 19 (5) prohibit or penalize a depository insti- 20 tution (or entity performing a financial service 21 for or in association with a depository institu- 22 tion) for, or otherwise discourage a depository 23 institution (or entity performing a financial 24 service for or in association with a depository 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 5 HR 1595 RFS institution) from, engaging in a financial service 1 for a cannabis-related legitimate business or 2 service provider. 3 (b) SAFE HARBOR APPLICABLE TO DE NOVO INSTI- 4 TUTIONS.—Subsection (a) shall apply to an institution ap- 5 plying for a depository institution charter to the same ex- 6 tent as such subsection applies to a depository institution. 7 SEC. 3. PROTECTIONS FOR ANCILLARY BUSINESSES. 8 For the purposes of sections 1956 and 1957 of title 9 18, United States Code, and all other provisions of Fed- 10 eral law, the proceeds from a transaction involving activi- 11 ties of a cannabis-related legitimate business or service 12 provider shall not be considered proceeds from an unlawful 13 activity solely because— 14 (1) the transaction involves proceeds from a 15 cannabis-related legitimate business or service pro- 16 vider; or 17 (2) the transaction involves proceeds from— 18 (A) cannabis-related activities described in 19 section 14(4)(B) conducted by a cannabis-re- 20 lated legitimate business; or 21 (B) activities described in section 22 14(13)(A) conducted by a service provider. 23 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 6 HR 1595 RFS SEC. 4. PROTECTIONS UNDER FEDERAL LAW. 1 (a) IN GENERAL.—With respect to providing a finan- 2 cial service to a cannabis-related legitimate business or 3 service provider within a State, political subdivision of a 4 State, or Indian country that allows the cultivation, pro- 5 duction, manufacture, sale, transportation, display, dis- 6 pensing, distribution, or purchase of cannabis pursuant to 7 a law or regulation of such State, political subdivision, or 8 Indian Tribe that has jurisdiction over the Indian country, 9 as applicable, a depository institution, entity performing 10 a financial service for or in association with a depository 11 institution, or insurer that provides a financial service to 12 a cannabis-related legitimate business or service provider, 13 and the officers, directors, and employees of that deposi- 14 tory institution, entity, or insurer may not be held liable 15 pursuant to any Federal law or regulation— 16 (1) solely for providing such a financial service; 17 or 18 (2) for further investing any income derived 19 from such a financial service. 20 (b) PROTECTIONS FOR FEDERAL RESERVE BANKS 21 AND FEDERAL HOME LOAN BANKS.—With respect to 22 providing a service to a depository institution that pro- 23 vides a financial service to a cannabis-related legitimate 24 business or service provider (where such financial service 25 is provided within a State, political subdivision of a State, 26 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 7 HR 1595 RFS or Indian country that allows the cultivation, production, 1 manufacture, sale, transportation, display, dispensing, dis- 2 tribution, or purchase of cannabis pursuant to a law or 3 regulation of such State, political subdivision, or Indian 4 Tribe that has jurisdiction over the Indian country, as ap- 5 plicable), a Federal reserve bank or Federal Home Loan 6 Bank, and the officers, directors, and employees of the 7 Federal reserve bank or Federal Home Loan Bank, may 8 not be held liable pursuant to any Federal law or regula- 9 tion— 10 (1) solely for providing such a service; or 11 (2) for further investing any income derived 12 from such a service. 13 (c) PROTECTIONS FOR INSURERS.—With respect to 14 engaging in the business of insurance within a State, polit- 15 ical subdivision of a State, or Indian country that allows 16 the cultivation, production, manufacture, sale, transpor- 17 tation, display, dispensing, distribution, or purchase of 18 cannabis pursuant to a law or regulation of such State, 19 political subdivision, or Indian Tribe that has jurisdiction 20 over the Indian country, as applicable, an insurer that en- 21 gages in the business of insurance with a cannabis-related 22 legitimate business or service provider or who otherwise 23 engages with a person in a transaction permissible under 24 State law related to cannabis, and the officers, directors, 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 8 HR 1595 RFS and employees of that insurer may not be held liable pur- 1 suant to any Federal law or regulation— 2 (1) solely for engaging in the business of insur- 3 ance; or 4 (2) for further investing any income derived 5 from the business of insurance. 6 (d) FORFEITURE.— 7 (1) DEPOSITORY INSTITUTIONS.—A depository 8 institution that has a legal interest in the collateral 9 for a loan or another financial service provided to an 10 owner, employee, or operator of a cannabis-related 11 legitimate business or service provider, or to an 12 owner or operator of real estate or equipment that 13 is leased or sold to a cannabis-related legitimate 14 business or service provider, shall not be subject to 15 criminal, civil, or administrative forfeiture of that 16 legal interest pursuant to any Federal law for pro- 17 viding such loan or other financial service. 18 (2) FEDERAL RESERVE BANKS AND FEDERAL 19 HOME LOAN BANKS.—A Federal reserve bank or 20 Federal Home Loan Bank that has a legal interest 21 in the collateral for a loan or another financial serv- 22 ice provided to a depository institution that provides 23 a financial service to a cannabis-related legitimate 24 business or service provider, or to an owner or oper- 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 9 HR 1595 RFS ator of real estate or equipment that is leased or 1 sold to a cannabis-related legitimate business or 2 service provider, shall not be subject to criminal, 3 civil, or administrative forfeiture of that legal inter- 4 est pursuant to any Federal law for providing such 5 loan or other financial service. 6 SEC. 5. RULES OF CONSTRUCTION. 7 (a) NO REQUIREMENT TO PROVIDE FINANCIAL 8 SERVICES.—Nothing in this Act shall require a depository 9 institution, entity performing a financial service for or in 10 association with a depository institution, or insurer to pro- 11 vide financial services to a cannabis-related legitimate 12 business, service provider, or any other business. 13 (b) GENERAL EXAMINATION, SUPERVISORY, AND 14 ENFORCEMENT AUTHORITY.—Nothing in this Act may be 15 construed in any way as limiting or otherwise restricting 16 the general examination, supervisory, and enforcement au- 17 thority of the Federal banking regulators, provided that 18 the basis for any supervisory or enforcement action is not 19 the provision of financial services to a cannabis-related le- 20 gitimate business or service provider. 21 SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY 22 REPORTS. 23 Section 5318(g) of title 31, United States Code, is 24 amended by adding at the end the following: 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 10 HR 1595 RFS ‘‘(5) REQUIREMENTS FOR CANNABIS-RELATED 1 LEGITIMATE BUSINESSES.— 2 ‘‘(A) IN GENERAL.—With respect to a fi- 3 nancial institution or any director, officer, em- 4 ployee, or agent of a financial institution that 5 reports a suspicious transaction pursuant to 6 this subsection, if the reason for the report re- 7 lates to a cannabis-related legitimate business 8 or service provider, the report shall comply with 9 appropriate guidance issued by the Financial 10 Crimes Enforcement Network. The Secretary 11 shall ensure that the guidance is consistent with 12 the purpose and intent of the SAFE Banking 13 Act of 2019 and does not significantly inhibit 14 the provision of financial services to a cannabis- 15 related legitimate business or service provider in 16 a State, political subdivision of a State, or In- 17 dian country that has allowed the cultivation, 18 production, manufacture, transportation, dis- 19 play, dispensing, distribution, sale, or purchase 20 of cannabis pursuant to law or regulation of 21 such State, political subdivision, or Indian 22 Tribe that has jurisdiction over the Indian 23 country. 24 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 11 HR 1595 RFS ‘‘(B) DEFINITIONS.—For purposes of this 1 paragraph: 2 ‘‘(i) CANNABIS.—The term ‘cannabis’ 3 has the meaning given the term ‘mari- 4 huana’ in section 102 of the Controlled 5 Substances Act (21 U.S.C. 802). 6 ‘‘(ii) CANNABIS-RELATED LEGITIMATE 7 BUSINESS.—The term ‘cannabis-related le- 8 gitimate business’ has the meaning given 9 that term in section 14 of the SAFE 10 Banking Act of 2019. 11 ‘‘(iii) INDIAN COUNTRY.—The term 12 ‘Indian country’ has the meaning given 13 that term in section 1151 of title 18. 14 ‘‘(iv) INDIAN TRIBE.—The term ‘In- 15 dian Tribe’ has the meaning given that 16 term in section 102 of the Federally Rec- 17 ognized Indian Tribe List Act of 1994 (25 18 U.S.C. 479a). 19 ‘‘(v) FINANCIAL SERVICE.—The term 20 ‘financial service’ has the meaning given 21 that term in section 14 of the SAFE 22 Banking Act of 2019. 23 ‘‘(vi) SERVICE PROVIDER.—The term 24 ‘service provider’ has the meaning given 25 VerDate Sep 11 2014 00:45 Sep 27, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1595.RFS H1595 pamtmann on DSKBC07HB2PROD with BILLS 12 HR 1595 RFS that term in section 14 of the SAFE 1 Banking Act of 2019. 2 ‘‘(vii) STATE.—The term ‘State’ 3 means each of the several States, the Dis- 4 trict of Columbia, Puerto Rico, and any 5 territory or possession of the United 6 States.’’. 7 SEC. 7. GUIDANCE AND EXAMINATION PROCEDURES. 8 Not later than 180 days after the date of enactment 9 of this Act, the Financial Institutions Examination Coun- 10 cil shall develop uniform guidance and examination proce- 11 dures for depository institutions that provide financial 12 services to cannabis-related legitimate businesses and 13 service prov [Text truncated for display. Full text available on Congress.gov.]