SAFE Banking Act of 2019

II 116TH CONGRESS 1ST SESSION S. 1200 To create protections for depository 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 APRIL 11, 2019 Mr. MERKLEY (for himself, Mr. GARDNER, Ms. ROSEN, Ms. MURKOWSKI, Mr. BENNET, Mr. SULLIVAN, Ms. HARRIS, Mr. PAUL, Ms. CORTEZ MASTO, Ms. DUCKWORTH, Mr. PETERS, Mr. MENENDEZ, Mr. KING, Mr. SAND- ERS, Mrs. MURRAY, Mr. MARKEY, Mr. LEAHY, Mr. SCHATZ, Mr. WYDEN, Ms. WARREN, Ms. HIRONO, and Mr. CRAMER) 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 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 SECTION 1. SHORT TITLE; PURPOSE. 3 (a) SHORT TITLE.—This Act may be cited as the 4 ‘‘Secure And Fair Enforcement Banking Act of 2019’’ or 5 the ‘‘SAFE Banking Act of 2019’’. 6 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 2 •S 1200 IS (b) PURPOSE.—The purpose of this Act is to increase 1 public safety by ensuring access to financial services to 2 cannabis-related legitimate businesses and service pro- 3 viders and reducing the amount of cash at such busi- 4 nesses. 5 SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS. 6 (a) IN GENERAL.—A Federal banking regulator may 7 not— 8 (1) terminate or limit the deposit insurance or 9 share insurance of a depository institution under the 10 Federal Deposit Insurance Act (12 U.S.C. 1811 et 11 seq.) or the Federal Credit Union Act (12 U.S.C. 12 1751 et seq.) or take any other adverse action 13 against a depository institution under section 8 of 14 the Federal Deposit Insurance Act (12 U.S.C. 1818) 15 solely because the depository institution provides or 16 has provided financial services to a cannabis-related 17 legitimate business or service provider; 18 (2) prohibit, penalize, or otherwise discourage a 19 depository institution from providing financial serv- 20 ices to a cannabis-related legitimate business or 21 service provider or to a State, political subdivision of 22 a State, or Indian Tribe that exercises jurisdiction 23 over cannabis-related legitimate businesses; 24 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 3 •S 1200 IS (3) recommend, incentivize, or encourage a de- 1 pository institution not to offer financial services to 2 an account holder, or to downgrade or cancel the fi- 3 nancial services offered to an account holder solely 4 because— 5 (A) the account holder is a cannabis-re- 6 lated legitimate business or service provider, or 7 is an employee, owner, or operator of a can- 8 nabis-related legitimate business or service pro- 9 vider; 10 (B) the account holder later becomes an 11 employee, owner, or operator of a cannabis-re- 12 lated legitimate business or service provider; or 13 (C) the depository institution was not 14 aware that the account holder is an employee, 15 owner, or operator of a cannabis-related legiti- 16 mate business or service provider; 17 (4) take any adverse or corrective supervisory 18 action on a loan made to— 19 (A) a cannabis-related legitimate business 20 or service provider, solely because the business 21 is a cannabis-related legitimate business or 22 service provider; 23 (B) an employee, owner, or operator of a 24 cannabis-related legitimate business or service 25 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 4 •S 1200 IS provider, solely because the employee, owner, or 1 operator is employed by, owns, or operates a 2 cannabis-related legitimate business or service 3 provider, as applicable; or 4 (C) an owner or operator of real estate or 5 equipment that is leased to a cannabis-related 6 legitimate business or service provider, solely 7 because the owner or operator of the real estate 8 or equipment leased the equipment or real es- 9 tate to a cannabis-related legitimate business or 10 service provider, as applicable; or 11 (5) prohibit or penalize a depository institution 12 (or entity performing a financial service for or in as- 13 sociation with a depository institution) for, or other- 14 wise discourage a depository institution (or entity 15 performing a financial service for or in association 16 with a depository institution) from, engaging in a fi- 17 nancial service for a cannabis-related legitimate 18 business or service provider. 19 (b) SAFE HARBOR APPLICABLE TO DE NOVO INSTI- 20 TUTIONS.—Subsection (a) shall apply to an institution ap- 21 plying for a depository institution charter to the same ex- 22 tent as such subsection applies to a depository institution. 23 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 5 •S 1200 IS SEC. 3. PROTECTIONS FOR ANCILLARY BUSINESSES. 1 For purposes of sections 1956 and 1957 of title 18, 2 United States Code, and all other provisions of Federal 3 law, the proceeds from a transaction conducted by a can- 4 nabis-related legitimate business or service provider shall 5 not be considered as proceeds from an unlawful activity 6 solely because the transaction was conducted by a can- 7 nabis-related legitimate business or service provider, as 8 applicable. 9 SEC. 4. PROTECTIONS UNDER FEDERAL LAW. 10 (a) IN GENERAL.—With respect to providing a finan- 11 cial service to a cannabis-related legitimate business or 12 service provider within a State, political subdivision of a 13 State, or Indian country that allows the cultivation, pro- 14 duction, manufacture, sale, transportation, display, dis- 15 pensing, distribution, or purchase of cannabis pursuant to 16 a law or regulation of such State, political subdivision, or 17 Indian Tribe that has jurisdiction over the Indian country, 18 as applicable, a depository institution, entity performing 19 a financial service for or in association with a depository 20 institution, or insurer that provides a financial service to 21 a cannabis-related legitimate business or service provider, 22 and the officers, directors, and employees of that deposi- 23 tory institution, entity, or insurer may not be held liable 24 pursuant to any Federal law or regulation— 25 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 6 •S 1200 IS (1) solely for providing such a financial service; 1 or 2 (2) for further investing any income derived 3 from such a financial service. 4 (b) PROTECTIONS FOR FEDERAL RESERVE 5 BANKS.—With respect to providing a service to a deposi- 6 tory institution that provides a financial service to a can- 7 nabis-related legitimate business or service provider 8 (where such financial service is provided within a State, 9 political subdivision of a State, or Indian country that al- 10 lows the cultivation, production, manufacture, sale, trans- 11 portation, display, dispensing, distribution, or purchase of 12 cannabis pursuant to a law or regulation of such State, 13 political subdivision, or Indian Tribe that has jurisdiction 14 over the Indian country, as applicable), a Federal reserve 15 bank, and the officers, directors, and employees of the 16 Federal reserve bank, may not be held liable pursuant to 17 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) FORFEITURE.— 22 (1) DEPOSITORY INSTITUTIONS.—A depository 23 institution that has a legal interest in the collateral 24 for a loan or another financial service provided to an 25 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 7 •S 1200 IS owner, employee, or operator of a cannabis-related 1 legitimate business or service provider, or to an 2 owner or operator of real estate or equipment that 3 is leased or sold to a cannabis-related legitimate 4 business or service provider, shall not be subject to 5 criminal, civil, or administrative forfeiture of that 6 legal interest pursuant to any Federal law for pro- 7 viding such loan or other financial service. 8 (2) FEDERAL RESERVE BANKS.—A Federal re- 9 serve bank that has a legal interest in the collateral 10 for a loan or another financial service provided to an 11 owner, employee, or operator of a depository institu- 12 tion that provides a financial services to a cannabis- 13 related legitimate business or service provider, or to 14 an owner or operator of real estate or equipment 15 that is leased or sold to such a depository institu- 16 tion, shall not be subject to criminal, civil, or admin- 17 istrative forfeiture of that legal interest pursuant to 18 any Federal law for providing such loan or other fi- 19 nancial service. 20 SEC. 5. RULE OF CONSTRUCTION. 21 Nothing in this Act shall require a depository institu- 22 tion, entity performing a financial service for or in associa- 23 tion with a depository institution, or insurer to provide 24 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 8 •S 1200 IS financial services to a cannabis-related legitimate business 1 or service provider. 2 SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY 3 REPORTS. 4 Section 5318(g) of title 31, United States Code, is 5 amended by adding at the end the following: 6 ‘‘(5) REQUIREMENTS FOR CANNABIS-RELATED 7 LEGITIMATE BUSINESSES.— 8 ‘‘(A) IN GENERAL.—With respect to a fi- 9 nancial institution or any director, officer, em- 10 ployee, or agent of a financial institution that 11 reports a suspicious transaction pursuant to 12 this subsection, if the reason for the report re- 13 lates to a cannabis-related legitimate business 14 or service provider, the report shall comply with 15 appropriate guidance issued by the Financial 16 Crimes Enforcement Network. The Secretary 17 shall ensure that the guidance is consistent with 18 the purpose and intent of the SAFE Banking 19 Act of 2019 and does not significantly inhibit 20 the provision of financial services to a cannabis- 21 related legitimate business or service provider in 22 a State, political subdivision of a State, or In- 23 dian country that has allowed the cultivation, 24 production, manufacture, transportation, dis- 25 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 9 •S 1200 IS play, dispensing, distribution, sale, or purchase 1 of cannabis pursuant to law or regulation of 2 such State, political subdivision, or Indian 3 Tribe that has jurisdiction over the Indian 4 country. 5 ‘‘(B) DEFINITIONS.—For purposes of this 6 paragraph: 7 ‘‘(i) CANNABIS.—The term ‘cannabis’ 8 has the meaning given the term ‘mari- 9 huana’ in section 102 of the Controlled 10 Substances Act (21 U.S.C. 802). 11 ‘‘(ii) CANNABIS-RELATED LEGITIMATE 12 BUSINESS.—The term ‘cannabis-related le- 13 gitimate business’ has the meaning given 14 that term in section 11 of the SAFE 15 Banking Act of 2019. 16 ‘‘(iii) INDIAN COUNTRY.—The term 17 ‘Indian country’ has the meaning given 18 that term in section 1151 of title 18. 19 ‘‘(iv) INDIAN TRIBE.—The term ‘In- 20 dian Tribe’ has the meaning given that 21 term in section 102 of the Federally Rec- 22 ognized Indian Tribe List Act of 1994 (25 23 U.S.C. 479a). 24 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 10 •S 1200 IS ‘‘(v) FINANCIAL SERVICE.—The term 1 ‘financial service’ has the meaning given 2 that term in section 11 of the SAFE 3 Banking Act of 2019. 4 ‘‘(vi) SERVICE PROVIDER.—The term 5 ‘service provider’ has the meaning given 6 that term in section 11 of the SAFE 7 Banking Act of 2019. 8 ‘‘(vii) STATE.—The term ‘State’ 9 means each of the several States, the Dis- 10 trict of Columbia, Puerto Rico, and any 11 territory or possession of the United 12 States.’’. 13 SEC. 7. GUIDANCE AND EXAMINATION PROCEDURES. 14 Not later than 180 days after the date of enactment 15 of this Act, the Financial Institutions Examination Coun- 16 cil shall develop uniform guidance and examination proce- 17 dures for depository institutions that provide financial 18 services to cannabis-related legitimate businesses and 19 service providers. 20 SEC. 8. ANNUAL DIVERSITY AND INCLUSION REPORT. 21 The Federal banking regulators shall issue an annual 22 report to Congress containing— 23 (1) information and data on the availability of 24 access to financial services for minority-owned and 25 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 11 •S 1200 IS women-owned cannabis-related legitimate businesses; 1 and 2 (2) any regulatory or legislative recommenda- 3 tions for expanding access to financial services for 4 minority-owned and women-owned cannabis-related 5 legitimate businesses. 6 SEC. 9. GAO STUDY ON DIVERSITY AND INCLUSION. 7 (a) STUDY.—The Comptroller General of the United 8 States shall carry out a study on the barriers to market- 9 place entry, including in the licensing process, and the ac- 10 cess to financial services for potential and existing minor- 11 ity-owned and women-owned cannabis-related legitimate 12 businesses. 13 (b) REPORT.—The Comptroller General shall issue a 14 report to the Congress— 15 (1) containing all findings and determinations 16 made in carrying out the study required under sub- 17 section (a); and 18 (2) containing any regulatory or legislative rec- 19 ommendations for removing barriers to marketplace 20 entry, including in the licensing process, and ex- 21 panding access to financial services for potential and 22 existing minority-owned and women-owned cannabis- 23 related legitimate businesses. 24 VerDate Sep 11 2014 04:00 Apr 20, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S1200.IS S1200 kjohnson on DSK79L0C42 with BILLS 12 •S 1200 IS SEC. 10. GAO STUDY ON EFFECTIVENESS OF CERTAIN RE- 1 PORTS ON FINDING CERTAIN PERSONS. 2 Not later than 2 years after the date of the ena [Text truncated for display. Full text available on Congress.gov.]