Industrial Hemp Banking Act

Summary: Industrial Hemp Banking Act This bill prohibits a federal banking regulator from: (1) terminating or limiting the deposit insurance or share insurance of a depository institution solely because the institution&nbsp;provides financial services to a legitimate&nbsp;industrial hemp business; (2) prohibiting or otherwise discouraging a depository institution from offering financial&nbsp;services to such a business;&nbsp;(3) recommending, incentivizing, or encouraging a depository institution not to offer financial services to an account holder solely because the account holder is affiliated with such a business; or (4) taking any adverse or corrective supervisory action on a loan made to a person solely because the person either owns such a business or owns real estate or equipment leased to such a business. As specified by the bill, a&nbsp;depository institution shall not,&nbsp;under federal law,&nbsp;be liable or subject to forfeiture&nbsp;for providing financial services to a legitimate industrial hemp business.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Industrial Hemp Banking Act''.

SEC. 2. SECURE AND FAIR ENFORCEMENT OF THE BANKING LAWS.

    (a) Safe Harbor for Depository Institutions.--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.) solely because the depository institution 
                provides or has provided financial services to an 
                industrial hemp legitimate business;
                    (2) prohibit, penalize, or otherwise discourage a 
                depository institution from providing financial 
                services to an industrial hemp legitimate business or 
                to a State or political subdivision of a State that 
                exercises jurisdiction over industrial hemp 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 the owner, 
                        operator, or employee of an industrial hemp 
                        legitimate business;
                            (B) the account holder later becomes an 
                        owner or operator of an industrial hemp 
                        legitimate business; or
                            (C) the depository institution was not 
                        aware that the account holder is the owner or 
                        operator of an industrial hemp legitimate 
                        business; and
                    (4) take any adverse or corrective supervisory 
                action on a loan made to an owner or operator of--
                            (A) an industrial hemp legitimate business, 
                        solely because the owner or operator owns or 
                        operates an industrial hemp legitimate 
                        business; or
                            (B) real estate or equipment that is leased 
                        to an industrial hemp legitimate business, 
                        solely because the owner or operator of the 
                        real estate or equipment leased the equipment 
                        or real estate to an industrial hemp legitimate 
                        business.
    (b) Protections Under Federal Law.--
            (1) In general.--In a State or a political subdivision of a 
        State that allows for industrial hemp legitimate businesses, a 
        depository institution that provides financial services to an 
        industrial hemp legitimate business, and the officers, 
        directors, and employees of that depository institution may not 
        be held liable pursuant to any Federal law or regulation--
                    (A) solely for providing such financial services 
                pursuant to the law or regulation of such State or 
                political subdivision; or
                    (B) for further investing any income derived from 
                such financial services.
            (2) Forfeiture.--A depository institution that has a legal 
        interest in the collateral for a loan or another financial 
        service provided to an owner or operator of an industrial hemp 
        legitimate business, or to an owner or operator of real estate 
        or equipment that is leased or sold to an industrial hemp 
        legitimate business, 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.
    (c) Rule of Construction.--Nothing in this section shall require a 
depository institution to provide financial services to an industrial 
hemp legitimate business.
    (d) 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 industrial hemp legitimate 
        businesses.--A financial institution or any director, officer, 
        employee, or agent of a financial institution that reports a 
        suspicious transaction pursuant to this subsection and the 
        reason for the report relates to an industrial hemp legitimate 
        business (as defined in section 2 of the Industrial Hemp 
        Banking Act), 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 Industrial Hemp Banking Act and does 
        not inhibit the provision of financial services to an 
        industrial hemp legitimate business in a State or political 
        subdivision of a State that allows for industrial hemp 
        legitimate businesses.''.
    (e) Definitions.--In this section:
            (1) 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).
            (2) 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 Office of the 
        Comptroller of the Currency, the National Credit Union 
        Administration, or any Federal agency or department that 
        regulates banking or financial services, as determined by the 
        Secretary of the Treasury.
            (3) Financial service.--The term ``financial service'' 
        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).
            (4) Industrial hemp legitimate business.--The term 
        ``industrial hemp legitimate business'' means--
                    (A) an institution of higher education (as defined 
                in section 101 of the Higher Education Act of 1965 (20 
                U.S.C. 1001)) or a State department of agriculture that 
                carries out an agricultural pilot program or other 
                agricultural or academic research under which such 
                institution of higher education or State department of 
                agriculture, either itself or through a third party--
                            (i) grows or cultivates industrial hemp for 
                        purposes of research, and such research 
                        actually occurs; and
                            (ii) such growing or cultivation is carried 
                        out pursuant to the laws of the State in which 
                        such institution of higher education or State 
                        department of agriculture is located;
                    (B) a third party that produces, manufactures, 
                sells, purchases, or transports industrial hemp 
                pursuant to, or otherwise participates in, a program or 
                research described under subparagraph (A); and
                    (C) a person that engages in commerce with 
                industrial hemp products that are exempted from the 
                definition of a controlled substance under the 
                Controlled Substances Act.
            (5) 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.
            (6) Agricultural act of 2014 definitions.--The terms 
        ``agricultural pilot program'', ``industrial hemp'', and 
        ``State department of agriculture'' have the meanings given 
        those terms, respectively, under section 7606(b) of the 
        Agricultural Act of 2014 (7 U.S.C. 5940(b)).