[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 1200 Introduced in Senate (IS)]
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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. Sanders, 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 businesses and
service providers for such businesses, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; PURPOSE.
(a) Short Title.--This Act may be cited as the ``Secure And Fair
Enforcement Banking Act of 2019'' or the ``SAFE Banking Act of 2019''.
(b) Purpose.--The purpose of this Act is to increase public safety
by ensuring access to financial services to cannabis-related legitimate
businesses and service providers and reducing the amount of cash at
such businesses.
SEC. 2. SAFE HARBOR FOR DEPOSITORY INSTITUTIONS.
(a) In General.--A Federal banking regulator may not--
(1) terminate or limit the deposit insurance or share
insurance of a depository institution under the Federal Deposit
Insurance Act (12 U.S.C. 1811 et seq.) or the Federal Credit
Union Act (12 U.S.C. 1751 et seq.) or take any other adverse
action against a depository institution under section 8 of the
Federal Deposit Insurance Act (12 U.S.C. 1818) solely because
the depository institution provides or has provided financial
services to a cannabis-related legitimate business or service
provider;
(2) prohibit, penalize, or otherwise discourage a
depository institution from providing financial services to a
cannabis-related legitimate business or service provider or to
a State, political subdivision of a State, or Indian Tribe that
exercises jurisdiction over cannabis-related legitimate
businesses;
(3) recommend, incentivize, or encourage a depository
institution not to offer financial services to an account
holder, or to downgrade or cancel the financial services
offered to an account holder solely because--
(A) the account holder is a cannabis-related
legitimate business or service provider, or is an
employee, owner, or operator of a cannabis-related
legitimate business or service provider;
(B) the account holder later becomes an employee,
owner, or operator of a cannabis-related legitimate
business or service provider; or
(C) the depository institution was not aware that
the account holder is an employee, owner, or operator
of a cannabis-related legitimate business or service
provider;
(4) take any adverse or corrective supervisory action on a
loan made to--
(A) a cannabis-related legitimate business or
service provider, solely because the business is a
cannabis-related legitimate business or service
provider;
(B) an employee, owner, or operator of a cannabis-
related legitimate business or service provider, solely
because the employee, owner, or operator is employed
by, owns, or operates a cannabis-related legitimate
business or service provider, as applicable; or
(C) an owner or operator of real estate or
equipment that is leased to a cannabis-related
legitimate business or service provider, solely because
the owner or operator of the real estate or equipment
leased the equipment or real estate to a cannabis-
related legitimate business or service provider, as
applicable; or
(5) prohibit or penalize a depository institution (or
entity performing a financial service for or in association
with a depository institution) for, or otherwise discourage a
depository institution (or entity performing a financial
service for or in association with a depository institution)
from, engaging in a financial service for a cannabis-related
legitimate business or service provider.
(b) Safe Harbor Applicable to De Novo Institutions.--Subsection (a)
shall apply to an institution applying for a depository institution
charter to the same extent as such subsection applies to a depository
institution.
SEC. 3. PROTECTIONS FOR ANCILLARY BUSINESSES.
For purposes of sections 1956 and 1957 of title 18, United States
Code, and all other provisions of Federal law, the proceeds from a
transaction conducted by a cannabis-related legitimate business or
service provider shall not be considered as proceeds from an unlawful
activity solely because the transaction was conducted by a cannabis-
related legitimate business or service provider, as applicable.
SEC. 4. PROTECTIONS UNDER FEDERAL LAW.
(a) In General.--With respect to providing a financial service to a
cannabis-related legitimate business or service provider within a
State, political subdivision of a State, or Indian country that allows
the cultivation, production, manufacture, sale, transportation,
display, dispensing, distribution, or purchase of cannabis pursuant to
a law or regulation of such State, political subdivision, or Indian
Tribe that has jurisdiction over the Indian country, as applicable, a
depository institution, entity performing a financial service for or in
association with a depository institution, or insurer that provides a
financial service to a cannabis-related legitimate business or service
provider, and the officers, directors, and employees of that depository
institution, entity, or insurer may not be held liable pursuant to any
Federal law or regulation--
(1) solely for providing such a financial service; or
(2) for further investing any income derived from such a
financial service.
(b) Protections for Federal Reserve Banks.--With respect to
providing a service to a depository institution that provides a
financial service to a cannabis-related legitimate business or service
provider (where such financial service is provided within a State,
political subdivision of a State, or Indian country that allows the
cultivation, production, manufacture, sale, transportation, display,
dispensing, distribution, or purchase of cannabis pursuant to a law or
regulation of such State, political subdivision, or Indian Tribe that
has jurisdiction over the Indian country, as applicable), a Federal
reserve bank, and the officers, directors, and employees of the Federal
reserve bank, may not be held liable pursuant to any Federal law or
regulation--
(1) solely for providing such a service; or
(2) for further investing any income derived from such a
service.
(c) Forfeiture.--
(1) Depository institutions.--A depository institution that
has a legal interest in the collateral for a loan or another
financial service provided to an owner, employee, or operator
of a cannabis-related legitimate business or service provider,
or to an owner or operator of real estate or equipment that is
leased or sold to a cannabis-related legitimate business or
service provider, shall not be subject to criminal, civil, or
administrative forfeiture of that legal interest pursuant to
any Federal law for providing such loan or other financial
service.
(2) Federal reserve banks.--A Federal reserve bank that has
a legal interest in the collateral for a loan or another
financial service provided to an owner, employee, or operator
of a depository institution that provides a financial services
to a cannabis-related legitimate business or service provider,
or to an owner or operator of real estate or equipment that is
leased or sold to such a depository institution, shall not be
subject to criminal, civil, or administrative forfeiture of
that legal interest pursuant to any Federal law for providing
such loan or other financial service.
SEC. 5. RULE OF CONSTRUCTION.
Nothing in this Act shall require a depository institution, entity
performing a financial service for or in association with a depository
institution, or insurer to provide financial services to a cannabis-
related legitimate business or service provider.
SEC. 6. REQUIREMENTS FOR FILING SUSPICIOUS ACTIVITY REPORTS.
Section 5318(g) of title 31, United States Code, is amended by
adding at the end the following:
``(5) Requirements for cannabis-related legitimate
businesses.--
``(A) In general.--With respect to a financial
institution or any director, officer, employee, or
agent of a financial institution that reports a
suspicious transaction pursuant to this subsection, if
the reason for the report relates to a cannabis-related
legitimate business or service provider, the report
shall comply with appropriate guidance issued by the
Financial Crimes Enforcement Network. The Secretary
shall ensure that the guidance is consistent with the
purpose and intent of the SAFE Banking Act of 2019 and
does not significantly inhibit the provision of
financial services to a cannabis-related legitimate
business or service provider in a State, political
subdivision of a State, or Indian country that has
allowed the cultivation, production, manufacture,
transportation, display, dispensing, distribution,
sale, or purchase of cannabis pursuant to law or
regulation of such State, political subdivision, or
Indian Tribe that has jurisdiction over the Indian
country.
``(B) Definitions.--For purposes of this paragraph:
``(i) Cannabis.--The term `cannabis' has
the meaning given the term `marihuana' in
section 102 of the Controlled Substances Act
(21 U.S.C. 802).
``(ii) Cannabis-related legitimate
business.--The term `cannabis-related
legitimate business' has the meaning given that
term in section 11 of the SAFE Banking Act of
2019.
``(iii) Indian country.--The term `Indian
country' has the meaning given that term in
section 1151 of title 18.
``(iv) Indian tribe.--The term `Indian
Tribe' has the meaning given that term in
section 102 of the Federally Recognized Indian
Tribe List Act of 1994 (25 U.S.C. 479a).
``(v) Financial service.--The term
`financial service' has the meaning given that
term in section 11 of the SAFE Banking Act of
2019.
``(vi) Service provider.--The term `service
provider' has the meaning given that term in
section 11 of the SAFE Banking Act of 2019.
``(vii) State.--The term `State' means each
of the several States, the District of
Columbia, Puerto Rico, and any territory or
possession of the United States.''.
SEC. 7. GUIDANCE AND EXAMINATION PROCEDURES.
Not later than 180 days after the date of enactment of this Act,
the Financial Institutions Examination Council shall develop uniform
guidance and examination procedures for depository institutions that
provide financial services to cannabis-related legitimate businesses
and service providers.
SEC. 8. ANNUAL DIVERSITY AND INCLUSION REPORT.
The Federal banking regulators shall issue an annual report to
Congress containing--
(1) information and data on the availability of access to
financial services for minority-owned and women-owned cannabis-
related legitimate businesses; and
(2) any regulatory or legislative recommendations for
expanding access to financial services for minority-owned and
women-owned cannabis-related legitimate businesses.
SEC. 9. GAO STUDY ON DIVERSITY AND INCLUSION.
(a) Study.--The Comptroller General of the United States shall
carry out a study on the barriers to marketplace entry, including in
the licensing process, and the access to financial services for
potential and existing minority-owned and women-owned cannabis-related
legitimate businesses.
(b) Report.--The Comptroller General shall issue a report to the
Congress--
(1) containing all findings and determinations made in
carrying out the study required under subsection (a); and
(2) containing any regulatory or legislative
recommendations for removing barriers to marketplace entry,
including in the licensing process, and expanding access to
financial services for potential and existing minority-owned
and women-owned cannabis-related legitimate businesses.
SEC. 10. GAO STUDY ON EFFECTIVENESS OF CERTAIN REPORTS ON FINDING
CERTAIN PERSONS.
Not later than 2 years after the date of the enactment of this Act,
the Comptroller General of the United States shall carry out a study on
the effectiveness of reports on suspicious transactions filed pursuant
to section 5318(g) of title 31, United States Code, at finding
individuals or organizations suspected or known to be engaged with
transnational criminal organizations and whether any such engagement
exists in a State, political subdivision, or Indian Tribe that has
jurisdiction over Indian country that allows the cultivation,
production, manufacture, sale, transportation, display, dispensing,
distribution, or purchase of cannabis. The study shall examine reports
on suspicious transactions as follows:
(1) During the period of 2014 until the date of the
enactment of this Act, reports relating to marijuana-related
businesses.
(2) During the 1-year period after date of the enactment of
this Act, reports relating to cannabis-related legitimate
businesses.
SEC. 11. DEFINITIONS.
In this Act:
(1) Business of insurance.--The term ``business of
insurance'' has the meaning given such term in section 1002 of
the Dodd-Frank Wall Street Reform and Consumer Protection Act
(12 U.S.C. 5481).
(2) Cannabis.--The term ``cannabis'' has the meaning given
the term ``marihuana'' in section 102 of the Controlled
Substances Act (21 U.S.C. 802).
(3) Cannabis product.--The term ``cannabis product'' means
any article which contains cannabis, including an article which
is a concentrate, an edible, a tincture, a cannabis-infused
product, or a topical.
(4) Cannabis-related legitimate business.--The term
``cannabis-related legitimate business'' means a manufacturer,
producer, or any person or company that--
(A) engages in any activity described in
subparagraph (B) pursuant to a law established by a
State or a political subdivision of a State, as
determined by such State or political subdivision; and
(B) participates in any business or organized
activity that involves handling cannabis or cannabis
products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.
(5) Depository institution.--The term ``depository
institution'' means--
(A) a depository institution as defined in section
3(c) of the Federal Deposit Insurance Act (12 U.S.C.
1813(c));
(B) a Federal credit union as defined in section
101 of the Federal Credit Union Act (12 U.S.C. 1752);
or
(C) a State credit union as defined in section 101
of the Federal Credit Union Act (12 U.S.C. 1752).
(6) Federal banking regulator.--The term ``Federal banking
regulator'' means each of the Board of Governors of the Federal
Reserve System, the Bureau of Consumer Financial Protection,
the Federal Deposit Insurance Corporation, the Financial Crimes
Enforcement Network, the Office of Foreign Asset Control, the
Office of the Comptroller of the Currency, the National Credit
Union Administration, the Department of the Treasury, or any
Federal agency or department that regulates banking or
financial services, as determined by the Secretary of the
Treasury.
(7) Financial service.--The term ``financial service''--
(A) means a financial product or service, as
defined in section 1002 of the Dodd-Frank Wall Street
Reform and Consumer Protection Act (12 U.S.C. 5481);
(B) includes the business of insurance;
(C) includes, whether performed directly or
indirectly, the authorizing, processing, clearing,
settling, billing, transferring for deposit,
transmitting, delivering, instructing to be delivered,
reconciling, collecting, or otherwise effectuating or
facilitating of payments or funds, where such payments
or funds are made or transferred by any means,
including by the use of credit cards, debit cards,
other payment cards, or other access devices, accounts,
original or substitute checks, or electronic funds
transfers;
(D) includes acting as a money transmitting
business which directly or indirectly makes use of a
depository institution in connection with effectuating
or facilitating a payment for a cannabis-related
legitimate business or service provider in compliance
with section 5330 of title 31, United States Code, and
any applicable State law; and
(E) includes acting as an armored car service for
processing and depositing with a depository institution
or the Board of Governors of the Federal Reserve System
with respect to any monetary instruments (as defined
under section 1956(c)(5) of title 18, United States
Code).
(8) Indian country.--The term ``Indian country'' has the
meaning given that term in section 1151 of title 18.
(9) Indian tribe.--The term ``Indian Tribe'' has the
meaning given that term in section 102 of the Federally
Recognized Indian Tribe List Act of 1994 (25 U.S.C. 479a).
(10) Insurer.--The term ``insurer'' has the meaning given
that term under section 313(r) of title 31, United States Code.
(11) Manufacturer.--The term ``manufacturer'' means a
person who manufactures, compounds, converts, processes,
prepares, or packages cannabis or cannabis products.
(12) Producer.--The term ``producer'' means a person who
plants, cultivates, harvests, or in any way facilitates the
natural growth of cannabis.
(13) Service provider.--The term ``service provider''--
(A) means a business, organization, or other person
that--
(i) sells goods or services to a cannabis-
related legitimate business; or
(ii) provides any business services,
including the sale or lease of real or any
other property, legal or other licensed
services, or any other ancillary service,
relating to cannabis; and
(B) does not include a business, organization, or
other person that participates in any business or
organized activity that involves handling cannabis or
cannabis products, including cultivating, producing,
manufacturing, selling, transporting, displaying,
dispensing, distributing, or purchasing cannabis or
cannabis products.
(14) State.--The term ``State'' means each of the several
States, the District of Columbia, Puerto Rico, and any
territory or possession of the United States.
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