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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1595 Reported in House (RH)]

<DOC>

                                                  Union Calendar No. 78
116th CONGRESS
  1st Session
                                H. R. 1595

                      [Report No. 116-104, Part I]

    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 HOUSE OF REPRESENTATIVES

                             March 7, 2019

  Mr. Perlmutter (for himself, Mr. Heck, Mr. Stivers, Mr. Davidson of 
    Ohio, Mr. Aguilar, Ms. Barragan, Mr. Beyer, Mr. Blumenauer, Ms. 
Bonamici, Mr. Brendan F. Boyle of Pennsylvania, Mr. Brown of Maryland, 
Ms. Brownley of California, Mr. Carbajal, Mr. Cardenas, Mr. Cartwright, 
   Ms. Castor of Florida, Mr. Cicilline, Mr. Cisneros, Ms. Clark of 
   Massachusetts, Ms. Clarke of New York, Mr. Cohen, Mr. Cooper, Mr. 
Correa, Mr. Courtney, Mr. Cox of California, Mr. Crist, Mr. Crow, Mrs. 
    Davis of California, Mr. DeFazio, Ms. DeGette, Ms. DeLauro, Ms. 
  DelBene, Mr. DeSaulnier, Ms. Eshoo, Mr. Espaillat, Mr. Foster, Ms. 
Fudge, Ms. Gabbard, Mr. Gallego, Mr. Garcia of Illinois, Mr. Gomez, Mr. 
Gonzalez of Texas, Mr. Hastings, Ms. Hill of California, Mr. Horsford, 
Mr. Huffman, Ms. Jackson Lee, Ms. Jayapal, Mr. Johnson of Georgia, Mr. 
Khanna, Mr. Kilmer, Mrs. Kirkpatrick, Mr. Krishnamoorthi, Mr. Lawson of 
   Florida, Ms. Lee of California, Mrs. Lee of Nevada, Mr. Levin of 
  Michigan, Mr. Levin of California, Mr. Ted Lieu of California, Mr. 
 Lujan, Ms. Matsui, Ms. McCollum, Mr. McGovern, Mr. Meeks, Mr. Neguse, 
   Ms. Norton, Mr. Panetta, Mr. Pappas, Ms. Pingree, Ms. Porter, Mr. 
Quigley, Mr. Raskin, Mr. Rush, Mr. Ryan, Mr. Rouda, Ms. Schakowsky, Mr. 
 Schrader, Mr. Sherman, Mr. Sires, Mr. Smith of Washington, Mr. Soto, 
   Ms. Speier, Mr. Swalwell of California, Ms. Titus, Mrs. Torres of 
California, Mr. Vargas, Ms. Velazquez, Mrs. Watson Coleman, Mr. Welch, 
 Ms. Wild, Mr. Yarmuth, Mr. Rodney Davis of Illinois, Mr. Hunter, Mr. 
 Joyce of Ohio, Mr. Newhouse, Mr. Young, Mr. Himes, Mr. Loebsack, Ms. 
 Lofgren, Mr. Lowenthal, Mrs. Carolyn B. Maloney of New York, Mr. Sean 
 Patrick Maloney of New York, Mr. Takano, Mr. Thompson of California, 
 Mr. Gaetz, Mr. Riggleman, Mr. David Scott of Georgia, Ms. Waters, and 
 Ms. Schrier) introduced the following bill; which was referred to the 
 Committee on Financial Services, and in addition to the Committee on 
   the Judiciary, for a period to be subsequently determined by the 
  Speaker, in each case for consideration of such provisions as fall 
           within the jurisdiction of the committee concerned

                              June 5, 2019

    Additional sponsors: Mr. Amodei, Mr. Balderson, Mr. Pocan, Mr. 
    Connolly, Mr. McClintock, Mr. Bera, Mr. Pascrell, Mr. Larson of 
  Connecticut, Mr. Peters, Mr. Stanton, Mr. Larsen of Washington, Ms. 
 Sanchez, Mr. Grijalva, Mr. Harder of California, Mr. San Nicolas, Mr. 
  Higgins of New York, Mr. Golden, Mr. Case, Ms. Meng, Mr. Castro of 
Texas, Mr. Moulton, Ms. Dean, Ms. Haaland, Mr. Evans, Ms. Kuster of New 
 Hampshire, Mr. Kildee, Mr. Nadler, Mr. Ruiz, Mr. Neal, Ms. Pressley, 
      Mr. Lamb, Ms. Slotkin, Mr. Deutch, Mr. Michael F. Doyle of 
Pennsylvania, Mr. Clay, Ms. Stevens, Ms. Wexton, Ms. Scanlon, Ms. Bass, 
 Mrs. Murphy, Mrs. Lawrence, Ms. Sherrill, Mrs. Bustos, Mr. McNerney, 
   Mrs. Luria, Mr. Brindisi, Mr. Steube, Mr. Trone, Mr. Massie, Mr. 
 Reschenthaler, Mr. Norcross, Mr. Upton, Mr. Sarbanes, Mr. Banks, Ms. 
Finkenauer, Mrs. Dingell, Ms. Tlaib, Ms. Davids of Kansas, Mr. Meuser, 
  Mr. Malinowski, Mr. Armstrong, Mr. Vela, Mr. Bishop of Georgia, Mr. 
   Gibbs, Ms. Moore, Mrs. Axne, Mr. Delgado, Ms. Torres Small of New 
    Mexico, Ms. Kendra S. Horn of Oklahoma, Mr. Van Drew, Ms. Blunt 
 Rochester, Ms. Spanberger, Ms. Houlahan, Mr. Kennedy, Ms. Underwood, 
 Mr. Jeffries, Mr. Comer, Mr. Garamendi, Miss Gonzalez-Colon of Puerto 
Rico, Mr. Tonko, Mr. Bacon, Mr. Payne, Mr. Thompson of Mississippi, Ms. 
 Mucarsel-Powell, Mr. Schiff, Ms. Shalala, Ms. Judy Chu of California, 
 Ms. Roybal-Allard, Ms. Escobar, Ms. Adams, Ms. Frankel, Mr. Casten of 
Illinois, Mr. Graves of Georgia, Mr. Collins of New York, Mr. Gonzalez 
            of Ohio, Mr. Morelle, Mr. Cleaver, and Mr. Costa

                              June 5, 2019

  Reported from the Committee on Financial Services with an amendment
 [Strike out all after the enacting clause and insert the part printed 
                               in italic]

                              June 5, 2019

 Committee on the Judiciary discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
 [For text of introduced bill, see copy of bill as introduced on March 
                                7, 2019]

_______________________________________________________________________

                                 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.), 
                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.
                                                  Union Calendar No. 78

116th CONGRESS

  1st Session

                               H. R. 1595

                      [Report No. 116-104, Part I]

_______________________________________________________________________

                                 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.

_______________________________________________________________________

                              June 5, 2019

  Reported from the Committee on Financial Services with an amendment

                              June 5, 2019

 Committee on the Judiciary discharged; committed to the Committee of 
  the Whole House on the State of the Union and ordered to be printed
```